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

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

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

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

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

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

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

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

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

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Christopher Taylor (Ward 3), Marcia Higgins (Ward 4), and Stephen Kunselman (Ward 3) before the city council's Sept. 19 meeting. (Photos by the writer.)

Public commentary was dominated by the theme of public art, with several people weighing in against a proposed change to the city ordinance setting aside 1% of all capital improvement projects for public art. One of the changes would exclude the use of funds generated by the street/sidewalk repair tax from inclusion in the public art program. Those taxes are on the Nov. 8 ballot.

The deliberations on the public art ordinance provoked some overt politicking at the table between Carsten Hohnke (Ward 5) and Stephen Kunselman (Ward 3), which concluded with Kunselman challenging his council colleagues to direct the city attorney to write a formal legal opinion justifying the legal basis for the public art program.

The proposed changes to the public art ordinance were motivated in part by a desire to assure voters that their street/sidewalk repair millage would not instead be spent on public art. However, the council postponed the public art ordinance revision until its second meeting in November – after the vote on the millage. That’s also well after the planned dedication ceremony for the Dreiseitl water sculpture on Oct. 4 – a project paid for with public art funds.

At its Monday meeting, the council also postponed a vote on a resolution of intent expressing the council’s plan for spending the sidewalk/millage money.

The council also considered a proposal to cancel a 10-year contract signed last year with RecycleBank, a company that provides a coupon-based incentive program for city residents to participate in the city’s recycling program. The data from the first year of the contract was not convincing to councilmembers that the RecycleBank program was having a positive impact.

However, councilmembers voted instead to direct city staff to negotiate towards a revised contract that RecycleBank had offered, which reduces RecycleBank’s fee by one-third.

The council approved a settlement with its police union, retroactively to 2009. The new contract is similar to those that other city unions have also settled on – including no wage increases, and pension and health care plans that require a greater contribution from employees than in the past. The city still has two unions (firefighters and police command officers) with contracts yet to be settled. Contracts with those unions will now have to conform to the requirements of new state legislation, effective Sept. 15, that limits the amount that the city can contribute to the health care costs of its employees.

Also related to police staffing, the council authorized the use of federal money to hire five police officers, if the city is awarded a grant for which it has applied.

In another employment-related issue, the council gave final approval to a revision to its retirement system, which lengthens the vesting period to 10 years and computes the final average compensation (FAC) based on five years instead of three.

Land use and property rights were a recurring theme throughout the meeting. Those items included: approval of the sale of a strip of city-owned downtown land to the Ann Arbor Transportation Authority; postponement of a request from a medical marijuana business for rezoning a parcel on South State Street; authorization of city staff to begin with the systematic annexation of township islands located within the city boundaries; and initiation of the process to levy a special assessment of Dexter Avenue property owners to fill in sidewalk gaps.

Items fitting the general category of economic development included a tax abatement for Picometrix, the setting of a tax abatement public hearing for Arbor Networks, and the expression of the council’s intent to establish a property assessed clean energy (PACE) district. The PACE program is a way for the city to offer loans to commercial property owners for the purpose of making energy improvements.

Among other items on the agenda, the council also passed a resolution calling on Gov. Rick Snyder not to sign legislation that would eliminate same-sex domestic partner benefits for public employees. 

Public Art Ordinance Revision

On the agenda was a resolution revise the city’s public art ordinance – a law that currently requires setting aside 1% of all capital improvement projects for the acquisition of public art.

Public Art: Background

The proposal, sponsored by Sabra Briere (Ward 1), would change the Percent for Art program by explicitly excluding sidewalk and street repair from projects that could be tapped to fund public art.

The timing of the ordinance change is related to two ballot proposals on which Ann Arbor residents will vote on Nov. 8: (1) renewal of a 2.0 mill tax to fund street repair; and (2) imposing a 0.125 mill tax to fund the repair of sidewalks – which is currently the responsibility of adjacent property owners.

Some councilmembers had previously understood the public art ordinance already to exclude replacement of sidewalk slabs from its definition of capital improvement projects.

But based on additional information from the city attorney’s office, the proposed ordinance revision was meant to spell that out explicitly [added language in italics]:

Capital improvement project means any construction or renovation of any public space or facility including buildings, parks, recreation areas, parking facilities, roads, highways, bridges, paths, sidewalks in locations where sidewalks do not already exist or as part of a larger capital improvement project, streetscape improvements and utilities. This definition includes only those projects designed to create a permanent improvement or betterment, and does not include projects that are primarily for the purpose of ordinary maintenance or repair. It does not include sidewalk crack repair, sidewalk cold-patching, sidewalk slab replacement, sidewalk leveling or sidewalk slab grinding.

The ordinance revision also would explicitly exclude the Percent for Art program from applying to any projects funded with money from the street repair millage. Another feature of the ordinance revision would exclude general fund money from being allocated to public art under the Percent for Art program.

The ordinance revision would also require that any money allocated for public art under the program be spent within three years, or be returned to its fund of origin.

On two previous occasions in the last two years (Dec. 21, 2009 and May 31, 2011), the council has considered but rejected a change to the public art ordinance that would have lowered the public art earmark from 1% to 0.5%. The city’s Percent for Art program was authorized by the council on Nov. 5, 2007. It is overseen by the city’s public art commission, with members nominated by the mayor and confirmed by the council.

Public Art: Public Comment

Robert O’Neal introduced himself as a retired physician and a 50-year Ann Arbor citizen. He pointed to the history of public art in general and its positive impact. Why should a city like Ann Arbor not be a leader in public art? he asked. He hoped that the city council would not pull back from public art, when now is a time it can use the boost that public art can provide.

Connie Brown introduced herself as a business owner, a 30-year resident of Ann Arbor, and a member of the Ann Arbor public art commission (AAPAC). In times of economic stress, she said, you should not give up on your future. Public art attracts visitors and ensures art is available to all. She noted that AAPAC is charged with master planning and coordinating the effort and selecting artists. She pointed to the commission’s current activity: a call for artists for additional art for the Justice Center; the solicitation of statements of qualifications (SOQs) and a request for proposals (RFP) for Fuller Road Station; a mural project in Allmendinger Park; art in connection with the Stadium bridges project; the possibility of an art walk from the Argo canoe liveries to the greenway. She also pointed to the recently completed West Park sculpture. She asked the council to keep the funding for the public art program the way it is.

John Kotarski spoke in support of public art in Ann Arbor. He said that art creates a sense of place and identity. He asked if Ann Arbor could afford it. Yes, we can, he said. It makes good business sense, he said, citing a May 2009 article in Forbes. From the article:

[Public art] is also, strangely, economically viable, despite its often high price tag. New York’s Waterfalls cost about $15.5 million; they brought in, according to the Public Art Fund, $69 million for the city. “There are 1,400 cultural institutions in New York that [collectively] bring in more than $6 billion to the economy,” says [Susan K.] Freedman [president of the Public Art Fund in New York City]. “More than 40,000 people are employed in the arts, and the arts bring in 25 million annual visitors. I think there is clearly an economic impact.”

Kotarski said that some people would object that it’s not a good comparison, because New York is not Ann Arbor, but added, “I beg to differ.” Ann Arbor, he contended is a “creative hot spot” for the region and the nation. In addition to making good economic sense, it also makes good common sense, he said. We need to be creative, he continued. Every farmer knows not to sell seed corn, and creativity is our seed corn, he said. Public art reminds us that creativity matters. It’s hard to teach creativity, he allowed, but Google encourages its employees to spend 20% of their time working on something creative, not necessarily related to their specific duties. We need to plant more seeds of creativity, not less, he concluded.

Margaret Parker introduced herself as past chair of the public art commission. She began by saying that bad news is easy to find. She said that Ann Arbor is lucky because in 2008 it had started a savings account (the public art fund) by allotting 1% from all capital improvement projects for public art. From that “frugal plan” and a volunteer art commission, she said, public art projects are being realized in the city. She alluded to Connie Brown’s description of some of those projects.

Parker then ticked through some of the many steps that results in a long timeline for project. AAPAC analyzes priorities in the city’s capital improvement plan, and considers a diversity of projects (for example, large and small), and a diversity of artists, materials and styles. The commission considers which projects are going into construction each year and puts together a list. Each project needs a commissioner to champion it, Parker said. A task force gets set up for the selection process. It could take months before an artist signs a contract, and months more before construction is started.

Parker said that the council should not “dump funds” after three years – because that doesn’t acknowledge the time it takes to put a project together.

In support of the idea that the city’s public art program promotes collaboration, Parker mentioned that the Detroit Institute of Arts wants to partner with the city. The Ann Arbor Rotary Club also wants to work on beautifying traffic medians, and the University of Michigan wants to work with the city on Fuller Road Station.

Mark Tucker introduced himself as an art teacher at the University of Michigan. He told the council that with his students, they had started public art projects in the city – Festifools and Foolmoon. He noted that those projects don’t get any money from Percent for Art. He called the decision to establish a public art program one that was made by forward-thinking individuals. He said that 26 states and 90 municipalities have public art programs. Public art is a reminder that there’s a happy, creative, productive community here. It’s not a frivolous expense, he said, but a long-term investment.

Tucker asked rhetorically if Ann Arbor is a city that embraces art. He answered by pointing to the long histories of the art fairs, the Ann Arbor Film Festival, the Ann Arbor Symphony Orchestra, the Ann Arbor Art Center, the University Musical Society, among others, as evidence that “we believe in the arts in this town.” However, he contended that “we’ve missed the boat in branding ourselves with the arts.” He contended that more visitors come to Ann Arbor due to the arts than all the sporting events combined. Yet if you’re a visitor or new resident, it’s not readily apparent that Ann Arbor embraces the arts, he contended. Public art makes Ann Arbor’s commitment to the arts visible. It might be cheaper to not make that commitment, he allowed, but we’ve made a decision to live in a city that has a pulse and a soul, and we’ve decided that living a full, interesting life is a goal worth seeking.

Jill McGinn introduced herself as a citizen of Ann Arbor for over 35 years. She said she supports the public art program. She told the council she teaches world history at Slauson Middle School. Part of the curriculum involves learning the characteristics of a civilization, and one of those is the arts. She described to the council how she tried to connect ancient pieces of art with modern art. To that end, she used a photo of a mosaic on one of the city’s parking structures. She asked the council to maintain “the meager penny on the dollar” for public art.

Public Art: Communications from Council

There are three slots for communications from councilmembers at various points during the meeting. The conversation on public art began in earnest during one of the early slots, before any of the substantive agenda items had been handled.

Tony Derezinski (Ward 2) led things off by reporting on his new assignment as an appointee to the public art commission, replacing Jeff Meyers, who resigned earlier this summer. Derezinski said he’d been to “one whole meeting” of AAPAC. He described the commissioners as incredibly dedicated people. He noted that both a former chair and the current chair of the commission [Margaret Parker and Marcia Chamberlin] were in the audience that night. He contended it’s a “fairly recent” program. [It was approved by the council in November of 2007.]

Derezinski said he was impressed with the commission’s willingness to collaborate. He’d met with members of the Arts Alliance and had an upcoming meeting with the Detroit Institute of Arts. He noted that AAPAC was looking at working with the Rotary Club to put some plantings and signage at the traffic median at the confluence of Washtenaw Avenue and Stadium Boulevard.

Derezinski then turned to other entrances into the city and the need to beautify the city – South State Street as well as North Main. The soul of the city is reflected in its values, Derezinski said. He asked rhetorically: “Do we stick do our guns?” Derezinski described now as a time when the public art program is just getting going. He said it takes a long time for art to be produced under the program.

Derezinski then adduced “Endymion” by the English poet John Keats [1795-1821], quoting its opening line: “A thing of beauty should be a joy forever.” [The passage is a sketch of a pastoral scene, in which the things of beauty are elements of nature – the sun, the moon, trees, sheep, and the like.]

Stephen Kunselman (Ward 3) responded to Derezinski’s comments by saying he appreciated all those who came to the meeting to support public art. But he then read aloud an email he’d received from a constituent about the use of dedicated millage funds, which called the practice of taking dedicated millage funds to pay for a different purpose “government corruption.” If this practice is not illegal, it should be, wrote Kunselman’s constituent. [The city's public art program uses a portion of millage funds designed for specific purposes – like street repair – for public art.]

Kunselman then went on to cite a Michigan Supreme Court case, South Haven v. Van Buren County board of commissioners, and read aloud from the opinion, which included in part:

However, a fundamental rule of statutory construction is that the Legislature did not intend to do a useless thing. If funds that voters approved for the purpose stated on the ballot could be redirected to another purpose without seeking new approval, there would be no reason for including the purpose on the ballot. Indeed, voters could be lulled into voting for a millage for a popular purpose, only to have the funds then used for something they may well have never approved. This is contrary to the General Property Tax Act.

By way of background, the South Haven v. Van Buren case involved a city suing a county over the disbursal of funds collected under a county road millage. The city did not have any county roads for which the millage could be used. The city filed suit, asking the court to force the county to “disgorge the funds” to the city based on a statutory formula, which the county should have used, absent any agreement between the city and the county for a different distribution. The court found that the county should have used the formula, but ruled that it was not the city, but rather the state attorney general who had the ability to enforce that statute. In other words, the legislation did not provide a specific cause of action for the city itself to take.

The passage cited by Kunselman is the court’s explanation for why the city was also not entitled to the funds on some other ground – the city was not a unit of government specified by the ballot language to receive funds from the millage. Voters across the county had not authorized the millage for city roads, but rather for county roads.

Public Art: Council Deliberations

When the actual agenda item came before the council, it was Sabra Briere (Ward 1) who led off the conversation – she had sponsored the amendment to the public art ordinance. Briere said the council could talk at length about public art and could try to be as eloquent as the members of AAPAC who spoke during public commentary. She told her colleagues that the proposed changes are not an attack on public art, but clarify what money can be used to fund it.

In providing an explanation for the thought behind the amendments, Briere explained that it was a surprise to her that taking tar and filling cracks in asphalt with it counts as a “capital improvement” under the current ordinance. Also, replacing a sidewalk slab is a “capital improvement,” under the language of the ordinance, she said, which was a surprise to her.

Briere said it seemed like an easy vote in 2007. [Though Briere was present at the Nov. 5, 2007 meeting, she was not elected to the council until the following day and did not make her first vote until the council's second meeting that month, on Nov. 19, 2007.] She had not been not aware of all the items that count as capital improvements, she said. She said she was dismayed that the funds accumulate for a long period of time. She could appreciate that the program is just getting started, but four years seems like a long time. She concluded her initial remarks by asking for her colleagues’ support on first reading. On the second reading, she said, the council could talk about it.

Responding to Briere’s contention that her amendment was not an attack on public art, Tony Derezinski (Ward 2) insisted that it is, in fact, a diminution of funds to public art and the effect is the same. He pointed to a number of projects in the pipeline and talked about how the entrances to the city can be improved in a way that related to the streets. He suggested that the program risked being eliminated in different ways – either through 1,000 cuts, or just eliminated outright. He insisted that four years is a short time. Before the council takes any action, a comprehensive look should be given to the program, he said, including the strictures on expenditures on the funds.

Marcia Higgins (Ward 4) stated that no one is looking to eliminate the program. But she allowed that she didn’t think the current draft of the ordinance was quite ready yet. She said she didn’t think the council could have a better version ready in two weeks, so she wanted to know when the planned work session on public art was scheduled. Derezinksi said the current thinking was for November. AAPAC could be ready for a report by then, he said. Higgins moved to postpone the vote until the second meeting of November. Higgins stated that during the work session, she would like the public to have an opportunity to talk to the council.

[Michigan's Open Meetings Act requires that public bodies allow the public to address them during meetings. However, Ann Arbor's city council does not allow for public comment during its work sessions, on the basis of the claim that these sessions are not "meetings" under the OMA statute. The American Civil Liberties Union has encouraged the inclusion of public commentary at Ann Arbor city council work sessions. Other entities, including the Washtenaw County board of commissioners, provide time for public commentary at work sessions.]

Briere noted that the public art ordinance revisions mention the street repair millage that’s on the ballot in November. She wanted to know if there were any legal implications to postponing past the election. City attorney Stephen Postema deferred to assistant city attorney Abigail Elias, saying that she has studied that issue. After some back-and-forth, Briere finally elicited from Elias that there was no legal problem with postponing the public art ordinance revisions.

Sandi Smith (Ward 1) said she couldn’t support a postponement. She wanted to see it withdrawn or voted down.

Margie Teall (Ward 4) said she concurred with Smith. She wanted the topic off the table. She said she needed to hear from AAPAC.

Margie Teall (Ward 4). In the background, front to back, are Marcia Higgins (Ward 4) and Carsten Hohnke (Ward 5).

Christopher Taylor (Ward 3) said he was eager to hear from AAPAC and saw no harm in postponing. After the work session, he said, if it’s the council’s collective view to push it forward, then the council would push it forward; if not, they wouldn’t. That’s a perfectly useful process, he said.

Carsten Hohnke (Ward 5) said he supported the postponement, because he generally supported approving an ordinance revision at first reading based on the habit and practice of advancing ordinance revisions to a second reading. However, he said he didn’t support the ordinance revisions.

Hohnke then said he wanted to encourage Stephen Kunselman (Ward 3) to take some action on the topic that Kunselman has been “heatedly expounding on” at recent council meetings. Hohnke said it’s important that the public not have a misunderstanding about what the city is doing. Hohnke characterized the public art ordinance as articulating a policy on how the city builds the things that it chooses to build.

He admonished Kunselman that it’s not appropriate to make statements in order to “score points,” saying it’s important to take action on that which councilmembers espouse.

Kunselman responded to Hohnke by saying that he agreed with Hohnke’s point about action and said he would have co-sponsored the proposed ordinance revision with Briere, but he had been out of town. Kunselman said the council should reflect on the fact that for four years, the council had not received a city attorney opinion on the subject. He said he could not look back at old emails he might have received from the city attorney when he was a member of council from 2006-2008, because they were deleted during the year he was not on the council. [Kunselman voted for the public art ordinance in 2007. He lost the 2008 Democratic primary to Christopher Taylor, but won back his seat the following year by defeating Leigh Greden.]

Kunselman noted that the city attorney had said if the council directs him to do so, he would write an opinion and file it with the city clerk. But that’s not what the charter says, Kunselman noted. [A Chronicle column addressed this issue: "Getting Smarter About City Charter"] Kunselman noted that the public art ordinance had been approved under a previous city administration. He called on his council colleagues who supported public art to bring a resolution to give direction to the city attorney to write a formal opinion explaining the legal basis for the public art ordinance. He said he would not sponsor such a resolution himself.

Stephen Rapundalo (Ward 2) eventually interrupted Kunselman with a “point of order,” a motion that is permitted at all times in order to achieve enforcement of the parliamentary rules. The rule Rapundalo wanted enforced was the requirement that when a postponement has been moved, it’s the postponement that must be the subject of the deliberation. Kunselman responded to Rapundalo by pointing out that he was responding to Hohnke [who had also strayed somewhat from the topic of the postponement] and stated that he would support postponement.

Mayor John Hieftje said he still hears from residents that the public art ordinance takes away from the city’s ability to fund police and firefighters, but he insisted that it does not do that.

By way of background, police and fire protection is paid from the general fund. The public art ordinance reads as follows:

1:834. – Inclusion of public art as part of a capital improvement project; pooling of funds for public art; use of pooled funds.
(1) Funds for public art that are included as part of a capital improvement project financed from the city’s general fund may be used as part of that capital improvement project for the creation, purchase, production or other acquisition of art incorporated as a part of the capital improvement project, including art located on the site where the project is located.
(2) Funds for public art that are included as part of a capital improvement project financed from the city’s general fund may instead be pooled in a separate public art fund within the General Fund.

As a practical matter, general fund dollars are not typically spent directly on capital improvement projects. However, some revenue sources previously received by the general fund, like revenue from antenna rights, were made a part of the financing plan for construction of the police and courts facility, which was a project that contributed to the public art program.

Outcome: The council voted to postpone the public art ordinance revisions until Nov. 21. Dissenting were Margie Teall (Ward 4) and Sandi Smith (Ward 1).

Intent on Use of Street/Sidewalk Repair Tax

The council also considered a resolution of intent on the use of proceeds from a street/sidewalk repair millage that will be on the Nov. 8 ballot.

Voters will be asked to approve two separate proposals: (1) a 5-year renewal of a 2.0 mill tax to support street repair projects; and (2) a 0.125 mill tax to pay for sidewalk repair.

Use of Street/Sidewalk Repair Tax: Background

The resolution of intent would specify that the street repair millage will pay for the following activities: resurfacing or reconstruction of existing paved city streets and bridges, including on-street bicycle lanes and street intersections; construction of pedestrian refuge islands; reconstruction and construction of accessible street crossings and corner ramps; and preventive pavement maintenance (PPM) measures, including pavement crack sealing.

The resolution of intent would stipulate that sidewalk repairs inside the Ann Arbor Downtown Development Authority district will not be funded by the sidewalk repair millage, except when the sidewalks are adjacent to single- and two-family houses. Both inside and outside the DDA district (otherwise put, throughout the city), the sidewalk repair millage would be used only to pay for sidewalk repair adjacent to property on which the city levies a property tax.

One impact of that resolution of intent, if it’s adopted, is that the city’s sidewalk repair millage will not be used to pay for repairs to sidewalks adjacent to University of Michigan property.

Use of Street/Sidewalk Repair Tax: Council Deliberations

Sabra Briere (Ward 1) led off by saying the resolution was simply a clarification of the city’s goals for the millage, not a change of anything in the language on the ballot.

Homayoon Pirooz, head of project management for the city, answered questions about the resolution and the millage.

Christopher Taylor (Ward 3) noted that among the activities listed is construction of pedestrian islands, but not reconstruction. He wanted to know if that was intentional. Pirooz explained that the city had constructed the first pedestrian island in 1986, so it hasn’t been an issue, yet. Taylor pressed on, saying that he understood the items to be “exclusive” – that is, that the money can’t be used for anything else except what’s listed. Pirooz characterized the list as guidelines for activities the city used the money on, and with fact sheets the city had previously distributed.

Taylor responded that he would rather include flexibility in the list to devise solutions, without revising policy on the fly in the future. So he said he wanted to add “reconstruction” of pedestrian refuge islands.

Taylor asked why the information about the securing of grants from the federal surface transportation fund was included. Pirooz explained that the grants are not an extra expenditure, but rather expressed how the street reconstruction millage has allowed the city to secure those matching dollars. It’s significant for the public to understand that the 2.0 mill tax gives them more than 2.0 mills worth of funding for street repair, through the leveraging of federal and state dollars, Pirooz said.

In response to comments from Mike Anglin (Ward 5), Pirooz said that over the life of the millage in the last five years, the city had received an additional $27 million in outside funding, which includes around $17 million for the Stadium bridges reconstruction project.

Margie Teall (Ward 4) questioned the need for the resolution. Normally, she said, there’d simply be a “fact sheet.” Briere responded by saying that the council had expressed its intent in connection with the parks capital improvement and maintenance millage, when it was on the ballot in 2007 – the resolution answers questions about how the city would spend the money. It’s a benefit to the public and to the council to have a record of the goals of the millage, Briere said.

Stephen Kunselman (Ward 3) scrutinized “crack sealing” as an activity – he wanted to know if that has always been the city’s practice. Pirooz explained that the city has not typically used millage money for that, and has instead used Act 51 money. [Act 51 funds are revenues from the state, collected primarily from gas taxes.] The crack sealing is preventive maintenance, Pirooz said, when 3-4 years after a road is repaved, you see cracks due to natural oxidation of the asphalt. That’s the time to seal those cracks, he said. Although the city hasn’t done much crack sealing with street millage money, he said that in 2011, the city is using $80,000 for crack sealing. He called it a good investment. Contrasting with crack sealing is pothole repair. That’s “ordinary maintenance,” said Pirooz, and not paid out of millage funds.

Stephen Rapundalo (Ward 2) identified a redundant inclusion of the word “separately” in the list.

Taylor then asked what the rationale was for the restrictions on spending within the DDA for properties that are not single- or two-family houses. Pirooz noted that it’s part of the ballot language the council had approved in August. The rationale, he said, was that the DDA receives a share of the street repair millage [through its tax increment finance capture district] so it makes sense for the DDA to cover the costs within its geographic district.

Taylor then suggested that to the bullet points it might be useful to include language to allow more flexibility: “… may be used for street and bridge projects, including without limitation …”

Briere asked how Taylor’s suggestion would apply to how money was spent. Pirooz said it would not have any impact that he could think of that night. Briere said she was fine with Taylor’s suggested change.

Marcia Higgins (Ward 4) then expressed concern that the council was amending things on the fly, and wanted to see a complete version. She asked Pirooz if a postponement would interfere with the timing of the preparation of the city’s fact sheet. Priooz said it wouldn’t.

Outcome: The council voted unanimously to postpone the resolution of intent on the use of the street/sidwalk millages.

RecycleBank Contract

On the council agenda was a resolution to end its 10-year contract with RecycleBank, a company that organizes a program to provide incentives to residents to set out their single-stream recycling carts for curbside collection. The contract has been in place for a year.

RecycleBank Contract: Background

A substitute resolution was eventually put forward directing the city administrator to negotiate a contract revision offered by RecycleBank that would reduce the per-household charge by about one-third, from $0.52 to $0.35 – which translates into a monthly payment reduction from $12,400 to $8,371. Under the new to-be-negotiated contract, if the tonnage of recyclables collected increases above current levels, RecycleBank could earn an additional $50 per ton, for each ton collected above existing levels. There would be a cap of $150,000 per year.

The resolution to cancel the contract had been postponed from the council’s Aug. 4 meeting. The cancellation resolution indicates termination would have given savings to the city of $149,167 per year on that contract. RecycleBank would have been entitled to $120,000 for the depreciated cost of equipment in recycling trucks as part of this program.

The impetus for canceling the contract had been based in part on skepticism that the first year’s worth of data really showed a measurable positive impact on recycling in Ann Arbor due purely to ReycleBank’s coupon incentives.

The interest in canceling the contract was also based in part on a desire by some councilmembers to find replacement revenue to fund a $107,042 annual increase in the contract with Recycle Ann Arbor (RAA), the company that the city hires to empty the curbside recycling carts. That increase was seen as necessary due to the financial stress under which RAA was operating, exacerbated in part by the lower-than-expected value of the contract with the city. The city deployed fewer curbside carts citywide than projected, and because RAA’s contract was based in part on the number of carts deployed, it received less revenue than had been forecast.

RecycleBank Contract: Public Comment

Atul Nanda, of RecycleBank, ticked through some points showing the positive impact of RecycleBank’s program. Among other items, he said that there’d been a 36% increase in recycling participation. Households that participate in the program have higher cart set-out rates than those that don’t participate. Last month, he said, residents had been able to order 2,400 rewards, the highest number of rewards since the program’s rollout. He pointed to avoided landfill disposal costs as a result of the program. He also reported that RecycleBank had received tremendous feedback from residents.

He then sketched out some of the terms of the offer that RecycleBank had made to reduce the cost of its contract with the city. That includes reducing RecycleBank’s per-household charge by about one-third, from $0.52 to $0.35 – which translates into a monthly payment reduction from $12,400 to $8,371. Also, RecycleBank would be willing to accept current recycling levels as a new baseline (680 pounds per household). If recycling levels increase beyond that, RecycleBank could earn an additional $50 per ton, for each ton collected above existing levels. There would be a cap of $150,000 per year.

RecycleBank Contract: Council Deliberations

Carsten Hohnke (Ward 5) asked city solid waste coordinator Tom McMurtrie to describe in more detail some of the options sent to the city, including the one that RecycleBank’s representative had characterized during public commentary.

McMurtrie went over the features of the RecycleBank proposal, which he described as a “hybrid” proposal from RecycleBank. On the hybrid approach, he said, the reduction of the fee by one-third would cut city costs by $50,000 per year. The incentivized system (of additional payments based on increased tonnages from current levels) would allow for RecycleBank to prove its worth, McMurtrie said, with a cap of $150,000. If recycling tonnage increased dramatically, the city wouldn’t see its costs increase beyond what they are today, McMurtrie said.

Another option was to discontinue RecycleBank for one collection day (Wednesday). On that option, on Oct. 1, RecycleBank would discontinue their coupon incentive program in the area served on that collection day. Then, after six months, the city would measure that collection day compared with the other four days. In April 2012, the city would look at the impact. That approach would provide some measurable data to show the effect of RecycleBank’s program.

On either option, McMurtrie said, the city could look at the contract at budget time and decide whether to cancel the contract or not.

Hohnke reviewed the points of the “hybrid” option and concluded that the downside was that if recycling tonnage did not increase, the city would continue to pay the contract – but he noted that the city is already doing that. McMurtrie agreed with that characterization, but noted that the city would continue to pay the contract at a lower rate – $100,000 annually compared to $150,000.

Hohnke confirmed that the city maintains the option of exiting the contract if funds aren’t available in the budget.

[The 10-year RecycleBank contract's termination clause includes language about terminating the contract based on availability of funds. To reduce legal risk, the city could decline to allocate the funds for the contract during its regular annual budgeting process. At Monday's meeting, the council revised its agenda to include a closed session just before deliberating on the RecycleBank contract, claiming an exception under the Open Meetings Act that allows a public body to consider written documents in a closed session if those documents are not required to be disclosed by statute.]

Christopher Taylor (Ward 3) wanted some clarification about the $50/ton payment for additional tonnage. He wondered if the city’s “profit” on extra tons covered the payment to RecycleBank. McMurtrie explained that currently the city clears $75 on the tonnage as a commodity and avoids $25 in landfill disposal fees – so RecycleBank’s payment for increased tonnage would take half the $100 the city realized.

Tony Derezinski (Ward 2) asked if RecycleBank had had a chance to review the options. Which one does RecycleBank favor? he asked. Derezinski also wanted to know if there would be sufficient data by the end of the fiscal year to evaluate the impact of RecycleBank. McMurtrie explained that RecycleBank had a preference for the hybrid solution – it was RecycleBank that came up with it. As for the question of sufficient data, he said the city could get a good indication of what RecycleBank’s incentive program is doing in that time frame.

Briere noted it’s unusual to face three options for a single resolution. She said she’d be happy to see a substitute resolution on the floor with the direction to negotiate the hybrid contract. [From a parliamentary point of view, the wholesale substitution of an alternate resolution is an "amendment" to the original resolution.]

Briere then read aloud the resolution, which directed city staff to renegotiate the RecycleBank contract along the lines of the hybrid solution.

Margie Teall (Ward 4) said that the direction the city is going is to try to increase recycling. She invited a student who works with RecycleBank, promoting its services to residents, to the podium – the student told the council that they’d never received a negative response.

Briere noted that one of the city’s goals was eventually to roll out the RecycleBank program to multi-family housing. She wondered if there is a way to address that part of the proposal. McMurtrie suggested that this could come back at a future meeting. Briere ventured that extending the program to multi-family housing is already in the contract. McMurtrie clarified that the contract says RecycleBank would provide pricing to the city to expand the service to multi-family housing units.

Teall said she supported that idea and thought that RecycleBank programs would appeal to a greater degree to multi-family housing.

Sandi Smith (Ward 1) said she appreciated the additional time the council had spent on this issue. [She was alluding to the fact that it had been postponed from the council's Aug. 4 meeting.] Smith said she was happy the council didn’t respond with a knee-jerk reaction of eliminating the program. In hindsight, Smith said she wished the city had not rolled out the single-stream system with automated carts at roughly the same time as the RecycleBank incentive program. She said she still hears that people love the single-stream recycling, but she has not heard that people like RecycleBank.

Taylor said he’d support the hybrid option and thanked RecycleBank for its flexibility, even though the contract is suboptimal from the company’s point of view.

Stephen Kunselman (Ward 3) said he’d support the hybrid option, but stressed that it’s important to keep their eye on the ball – namely, the next budget year. The city staff has indicated the solid waste fund will be challenged, he said, so it’s about fiscal responsibility as the city moves forward.

Hohnke concluded deliberations by saying that he took “gentle issue” with Smith’s description of the original resolution as a “knee-jerk reaction.” He said that after looking at the data, it wasn’t clear that the city was getting value out of that contract.

Outcome on the amendment and the full resolution: The council voted unanimously to renegotiate the RecycleBank contract.

Police Union Settlement

The council was asked to approve a new contract with the city’s police officers union, based on an agreement mandated by an arbitration panel’s award signed on Sept. 14, 2011.

The arbitration panel worked through the binding arbitration procedure for labor disputes in police and fire departments, which in Michigan is governed by Act 312 of 1969.

The new contract is retroactive for the period from July 1, 2009 to June 30, 2013. In an email to The Chronicle, Tom Crawford, the city’s CFO, wrote that the panel’s determination does not include any liability for the city dating back to the start of the contract.

Highlights of the new deal include a redesigned health care plan, which offer options for health care contributions based on a calendar year. For single-person coverage, for example, the “low plan” would include no monthly premium but a $1,000 deductible. The “high plan” would include a 10% monthly contribution with a $300 deductible.

The new contract includes no across-the-board wage increases.

Pension contributions by employees would increase from 5% to 6% of pay on a pre-tax basis starting Jan. 1, 2012. Employees hired after Jan. 1, 2012 would not be vested in the pension program until 10 years, and their final average compensation (used to determine pension benefits) would be based on the last five years of service. Retirees would have an access-only type retiree health care plan with a retiree health care reimbursement account. Each employee would receive a one-time deposit of $500 in a health retirement account on Jan. 1, 2012.

Stephen Rapundalo (Ward 2), who chairs the city council’s labor committee, ticked through the highlights of the contract. He said he was sorry that 312 arbitration had to be used to get to that conclusion. If the city had had the agreement in place at budget time in May, he said, that would have saved a number of police positions that had to be laid off.

Rapundalo said that now six of eight city unions have settled contracts, so the city has slowly but surely made a lot of progress. He said he appreciated unions and employees stepping forward, but noted that some “rich contracts” had been put in place in the 1990s.

There’s still no contract with the firefighters or command officers union, Rapundalo said. Now that Gov. Rick Snyder has signed new labor legislation that restricts how much the city can contribute to employee health care, Rapundalo said the city would have a couple of options to discuss with those two unions: whether to take the 80/20 percentage – in which the city would pay for no more than 80% of an employee’s health care premiums – or the hard cap. Those unions had the opportunity to come on board before the legislation was signed, Rapundalo said, but didn’t.

Outcome: The council voted unanimously to approve the police union agreement.

Federal Grant Application to Fund Police

On the agenda was a resolution to authorize acceptance and appropriation of a federal grant, if it is eventually awarded to the city, to fund the hiring of additional police officers. The city submitted an application on May 24, 2011 to ensure a May 25 deadline was met.

The application was submitted for five officers at a total amount of $1,398,745. The grant would pay for the officers for three years.

The competitive grants were announced in May 2011 as part of the U.S. Dept. of Justice office of community oriented policing services (COPS).

At Monday’s council meeting, chief of police Barnett Jones described the features of the funding.

Sabra Briere (Ward 1) asked what the effects of grant funding would be, were it to be awarded, on next year’s budget. Jones said there was no effect, because the grant doesn’t require a local match. Briere said in the past the city has not embraced this kind of grant because it comes with certain conditions. She ventured that there was a required commitment not to lay off officers hired under the program. Jones allowed that was true, and that a kind of “super-seniority” would need to be established for those officers, and that would need to be talked through with the union.

Jones said that a previous requirement associated with such grants, that officers hired under the program would need to be retained for a year after the grant funding ended, no longer existed. In response to a question from Christopher Taylor (Ward 3), Jones said that the grant did not require maintaining any particular overall level of staffing.

Briere asked if laid-off officers could be brought back under the program. Jones said it was a matter of timing. If the grant were approved next week, then he’d use the funds to rehire the same officers who were laid off.

Outcome: The council voted unanimously to authorize receipt of the grant, if it is awarded.

Retirement System Revision

The council considered a resolution to give final approval to an ordinance revision that increases the city’s pension vesting period for non-union employees hired after July 1, 2011 – from five years to 10 years. It also changes the final average compensation computation so that it’s based on the the last five years of employment, not the last three years.

Retirement System: Background

The ordinance change had been given initial approval at the council’s Sept. 6 meeting.

The preparation of the ordinance change came at the direction of the city council, which passed a resolution at its June 6, 2011 meeting asking the city administrator to bring forward ordinance revisions that for non-union employees would change health care benefits and aspects of the city’s pension plan.

Specifically, the June 6 resolution pointed to ordinance revisions that would base the final average contribution (FAC) for the pension system on the last five years of service, instead of the last three. Further, employees would be vested in the pension plan after 10 years instead of five. Finally, all new non-union hires would be provided with an access-only style health care plan, with the opportunity to buy into whatever plan active employees enjoy.

At its Aug. 4, 2011 meeting, the council gave final approval to an ordinance change that addressed the health care provision from the June 6 resolution. That ordinance change distinguishes between “subsidized retirees” and “non-subsidized retirees.” A non-subsidized retiree is someone who is hired or re-employed into a non-union position with the city on or after July 1, 2011. In their retirement, non-subsidized retirees will have access to health care they can pay for themselves, but it will not be subsidized by the city.

The city expects that when it reaches a point when all non-union employees have been hired under the revised pension plan, the city’s costs will be $230,000 less than they would be under the current plan.

Retirement System: Public Hearing

During the public hearing, only one person spoke. Thomas Partridge introduced himself as a recent candidate for 18th District state senate seat and as an advocate for senior citizens and public employees.

Partridge said he took exception to the mayor’s continuing to abrogate freedom of speech by making the equivalent of “shots across the bow” – it’d been done repeatedly, Partridge said, and he thought it was abhorrent. He said he opposed the passage of the ordinance because he didn’t think the council and the community had considered implications of going back on past promises. The council should think long and hard, he said, and postpone taking a vote. They should find a way to fully support the funding of pensions.

Outcome: The council voted unanimously, without discussion, to approve the revision to the retirement ordinance.

Land Sale to AATA

On Monday’s agenda was a resolution to authorize the sale of a six-foot-wide strip of city-owned downtown land to the Ann Arbor Transportation Authority. The strip forms the southwestern border of one of the parcels where the AATA’s Blake Transit Center is located. The $90,000 sale price of the 792-square-feet of land was determined to be the fair market value by an independent appraisal.

Land Sale to AATA: Background

The desire of the AATA to acquire the six-foot strip has been mentioned at several AATA board meetings during routine updates. It’s part of the AATA’s plan to reconstruct the BTC on the South Fifth Avenue side of the block; the BTC currently stands on the South Fourth Avenue side, with a canopy that stretches towards Fifth. The AATA hopes to finalize the design of the new transit center by the end of December 2011, with construction to start in early 2012.

Although she was an alternate speaker for public commentary reserved time at the start of the council meeting (there’s a limit of 10 speakers), Rita Mitchell did not have an opportunity to speak at that time. At The Chronicle’s request, she forwarded her prepared remarks. [.pdf of Mitchell's prepared remarks]

In Mitchell’s remarks, she acknowledges the fair market value approach used to establish the price of the land sale to AATA, but then asks:

Why not use the same approach for Fuller Road Park? Show us, the public, the business plan for the parking structure project that addresses the risks, costs and potential benefits of the project. Get an updated appraisal of the land, and propose its sale to the University, followed by the public vote on sale of park land that is required by our city charter.

Mitchell was referring to the site where the proposed Fuller Road Station – a joint city of Ann Arbor/UM parking structure, bus depot and possible train station – is planned.

Land Sale to AATA: Council Deliberations

Sabra Briere (Ward 1) asked what the impact would be for the future of the former YMCA (now city-owned) lot at Fifth and William, of which the strip of land was a part. The city’s chief financial officer, Tom Crawford, offered that he was not the most knowledgable person on that issue, but that the site to the south of the strip (the former Y lot) is maintained as buildable, with the zoning that’s currently on it. Wendy Rampson, head of planning for the city, indicated that the allowable floor-area-ratio (FAR) goes down a very little amount, as a result of removing that strip of land. But from a configuration standpoint, she said, it shouldn’t have an impact.

Stephen Kunselman (Ward 3) asked Crawford if the real estate appraisal was based on taking a proportional fraction of the $3.5 million the city had paid for the land, on which it is still making interest-only payments. Crawford stated that the city did not get an appraisal of the larger parcel in connection with the strip of land. Kunselman noted that the $90,000 proceeds are stipulated to go into the general fund, not to make payments on the interest for the property. Crawford noted that the council could direct finance staff to use the proceeds towards the interest payment, but that the interest payment has already been budgeted.

Mayor John Hieftje called the deal a good example of intergovernmental cooperation.

Outcome: The council voted unanimously to approve the sale of the land to the AATA.

Rezoning for Medical Marijuana

The council was asked to consider a resolution to rezone a property on State Street, so that it could be used as a medical marijuana dispensary.

Rezoning for Med Marijuana: Background

The owner of Treecity Health Collective, a dispensary at 1712 S. State, had requested that the city planning commission recommend the location be rezoned from O (office) to C1 (local business). The owner had also asked that the area plan requirement for that location be waived.

However, at their Aug. 16, 2011 meeting, planning commissioners recommended denial of the requests, based on a staff recommendation, stating that C1 zoning is not consistent with adjacent zoning, land uses and the city’s master plan.

And at their Sept. 19 meeting, councilmembers were hesitant to vote down the rezoning, and instead decided to delay their vote.

The Treecity Health Collective opened in 2010. This summer, the Ann Arbor city council approved amendments to the city’s zoning ordinances that prevent medical marijuana dispensaries from operating in office zoning districts – those changes were set to take effect on Aug. 22, 2011. Rather than relocate the dispensary, the business owner is asking for the zoning change. The property – located on the west side of State, south of Stimson – is owned by Francis Clark.

A recent court of appeals ruling has raised legal questions about the existence of dispensaries under Michigan’s Medical Marijuana Act. However, the Ann Arbor city council decided at its Sept. 6 meeting to proceed with the appointment of four out of the five members of its medical marijuana licensing board. At Monday’s meeting, council appointed the fifth member, Gene Ragland. That body was to meet for the first time on Sept. 21.

Rezoning for Medical Marijuana: Public Comment

Dori Edwards spoke in favor of rezoning the property. She described Treecity as a nonprofit medical marijuana collective. Though the land is zoned for office, she said it’s not a traditional office use. There’s a set of converted old houses along that stretch of South State – one is a palm reader, another is a masseuse. She noted that Treecity occupies the whole building, so no one else in the building can be disturbed by Treecity’s patients. She also told the council: “Our neighbors like us!”

Edwards noted that the planning commission had expressed concerns about “spot zoning” at its Aug. 16 meeting. But she reminded the city council that they had the discretion to do that and in fact the city already does that in the form of planned unit developments (PUDs). A PUD requires that the project be in the public interest, she noted, but she contended that allowing Treecity to continue is in the public interest.

Rezoning for Medical Marijuana: Council Deliberations

Sabra Briere (Ward 1) led off deliberations by alluding to another parcel rezoning request that will be coming to council – for a site where Biercamp Artisan Sausage & Jerky is located, across the street from Treecity. The purpose of the rezoning might differ, but the council has the same kind of issue to contemplate, she said. Briere suggested the council should think about the effect of rezoning that stretch of State Street collectively.

Wendy Rampson, head of planning for the city, explained the planning commission’s unanimous recommendation against the rezoning request for Treecity’s parcel. The requested commercial zoning is inconsistent with the city’s master plan, Rampson explained – the site is recommended to be zoned as office. Zoning it as commercial would result in “spot zoning.”

Responding to a query from mayor John Hieftje, Rampson explained that the parcel where Biercamp is located includes an annexation request. The rezoning request won’t come to the council until it’s annexed into the city. The owners of Biercamp have requested a commercial zoning (C3), but the city planning commission has also recommended denial of that request, reported Rampson.

Hieftje asked about possible traffic issues. Rampson explained that rezoning to a more intense use allows for expansion of use. The planning commission is uncomfortable with rezoning, Rampson said, until the city moves forward with a corridor study of South State Street. [Earlier this year, plans for that study were put on hold amid concerns over its cost – even though the council had previously authorized funding for it as part of the annual budget.]

The planning commission had left the door open for expanding the commercial node at the intersection of Stimson and State, but not before revising the master plan after a study of the whole corridor. Responding to a query from Hieftje, Rampson explained that the light industrial zoning the Biercamp parcel will inherit from Ann Arbor Township would allow the sale of products produced on that site.

Tony Derezinski (Ward 2), who is the city council’s representative to the planning commission, noted that Rampson had underscored the fact that the corridor study was a factor. The challenges of the study would be exacerbated by having a big box store across the border, he said. [Derezinski was alluding to the planned construction of a Costco at the intersection of State and Ellsworth, in Pittsfield Township.] A similar issue with State Street had been confronted by a committee charged with the task of reevaluating the areas of the city zoned as R4C – the area has outgrown the zoning, Derezinski contended. We need a comprehensive look at the corridor, Derezinski said.

Stephen Kunselman (Ward 3) asked Rampson if “conditional rezoning” had been considered. Rampson said that in the early part of the process that came up as an option, but the request needs to come from the applicant – which they’d opted not to pursue. Asked why the applicant had not considered conditional rezoning, Rampson indicated that staff did not know. Also in response to Kunselman, Rampson said it would be possible to consider that as an option, but that the planning commission would need to review it, and see if the restrictions imposed as conditions would satisfy concerns about spot zoning, traffic, and use.

Sandi Smith (Ward 1) asked what the implications are for “spot zoning,” given that such a rezoning would not change the current use that Treecity has for the property. Rampson responded by saying that the current use, as a medical marijuana business, was not authorized, so that’s not a measuring stick that can be used. Spot zoning, Rampson explained, is when a single parcel is not zoned as other surrounding similar properties. Responding to a query from Smith, Rampson said she felt like spot zoning the parcel could set a precedent citywide.

Outcome: The council voted unanimously to postpone the decision on rezoning the 1712 S. State parcel.

Nominations/Appointments: Medical Marijuana

Ordinarily, nominations and appointments to boards and commissions are a two-step process, with nominations coming from the mayor at one meeting and confirmation at a subsequent council meeting.

In the case of the fifth member appointed to the medical marijuana licensing board, a physician, the mayor asked the council to make the appointment of Gene Ragland in a one-step process so the entire board could be seated for its meeting later in the week. The four other members had been previously appointed.

Outcome: Gene Ragland was unanimously approved as the fifth member to the medical marijuana licensing board.

Systematic Annexations from Townships to City

A resolution on the agenda directed the city staff to begin taking a strategic but systematic approach to annexing the 580 township islands from Ann Arbor, Pittsfield and Scio townships into the city of Ann Arbor.

Staff would begin with the annexation of properties owned by utility companies and publicly owned lands within the ultimate boundary area of the city. After that, the next priority for annexation are clusters of township islands. [.pdf of staff recommended analysis and strategy]

The council’s resolution calls for a report back to the council in January 2013 on progress with the annexation work.

The only person to speak at a public hearing on the issue was Thomas Partridge, who told the council he’d moved to the Ann Arbor area in the early 1990s. He said he didn’t think it’s in the interest of neighboring townships to give up valuable land using “ancient, unjust annexation laws” that should have long ago been replaced. He called it a part of the “bullying mindset” that is all-too prevalent in the state of Michigan. He said he’d not heard one word justifying the annexation action. He said the council had also not heard from the townships. If annexation happens, it should be done through the merging of local units into one regional government, he said.

During the communications time immediately following the public hearings, Sabra Briere (Ward 1) noted that the council had just heard Partridge discuss annexation of clusters – some of which have houses on them. She said that she could not speak to the concerns of each township supervisor. However, she reported that she had spoken to Ann Arbor Township’s supervisor [Michael Moran]. She was told they’d been prepared for years for these annexations and had based their budgets on that expectation. So it doesn’t cause a significant hardship, she concluded. Briere allowed that she couldn’t say that the same opinion is held by all township supervisors, because she had not met with them all.

When the item came up, mayor John Hieftje echoed the sentiment that Briere had previously expressed, saying the annexations have been planned for a decade. He described the townships as happy, because they don’t have to provide services across the boundary into Ann Arbor.

Outcome: The council voted unanimously to give staff direction to begin systematic annexation of township islands within the city.

Dexter Avenue Special Sidewalk Assessment

Before the council was a resolution to start the process for a special assessment on property owners along a stretch of Dexter Avenue, in order provide the required 20% local funding component for sidewalk, curb and gutter improvements. The other 80% of the project would be paid with federal funds.

There are several gaps in the sidewalks along that stretch [photo]. An administrative hearing for residents is planned for Oct. 3.

This first step by the council essentially directs the city administrator to prepare plans and provide an estimate of the cost. The project is part of the city’s capital improvement plan (CIP). A neighborhood meeting was held on the topic in June 2011.

Next steps, with their expected timing, include: Sept. 20 – mail administrative hearing invitation to residents; Oct. 3 – administrative hearing with residents; Nov. 10 – council approval of resolutions specifying costs to property owners, and a public hearing date; Dec. 5 – public hearing and a council vote on the special assessment.

During deliberations, Sabra Briere (Ward 1) noted that the resolution is a good reminder that special assessments are how the city builds new sidewalks – it’s not done that often. She observed it’s not paid for with millage dollars that could be approved in November. The sidewalk repair millage dollars would be restricted to existing sidewalks. Dealing with gaps in the sidewalk are a challenge, she said, and a property assessment is a good solution.

Carsten Hohnke (Ward 5) noted that this work is in preparation of the reconstruction of Dexter Avenue between Maple and Huron.

Stephen Kunselman (Ward 3), noting the portion of the project to be paid by the Michigan Dept. of Transportation, observed that a lot of the city’s sidewalk gaps are in neighborhoods. He wanted to know if those gaps were eligible for such MDOT funding. The answer Kunselman got from Homayoon Pirooz, head of project management for the city, was basically no.

Mike Anglin (Ward 5) reported that there’d been good turnout at the meetings with the community on this project in the spring, and those meetings went well. He said it might be a hard pill for people to swallow, but 80% of the cost is being picked up, which would be a “salve for their pocketbooks.”

Outcome: The council voted unanimously to start the process for the Dexter Avenue special assessment.

Tax Abatements: Picometrix, Arbor Networks

On the agenda were resolutions to approve one tax abatement and to set a public hearing for another.

The resolution on a tax abatement was for Picometrix LLC, located at 2925 Boardwalk in Ann Arbor. Picometrix is a supplier of high-speed optical receivers.

The five-year abatement would apply to $2,434,882 worth of personal property that Picometrix is acquiring. From the application for abatement: “Due to the projected increase in production volume, the company will need to purchase assets to maximize production and support added staffing.”

The list of personal property included in the application ranges from garden-variety desks and cubicles to digital oscilloscopes and laser beam profilers. The abatement will reduce the company’s annual tax bill for the new equipment by about $16,500 annually. The new personal property is expected to generate approximately $20,700 in property taxes for each year during the abatement period, according to the city staff memo accompanying the resolution.

The industrial development district in which the Picometrix tax abatement is sought was established in 2006. The public hearing on the request from Picometrix was held at the council’s July 18 meeting. Only one person spoke at the hearing.

Also at its Sept. 19 meeting, a separate resolution set a hearing for a tax abatement for Arbor Networks. That hearing will take place at the city council’s meeting on Oct. 17, 2011. Arbor Networks is a computer network security company. The abatement would be on $883,527 in real property and $7,790,454 in personal property. Under the requested abatement, the tax bill on the additional real and personal property for Arbor Networks would be reduced by about $84,700 annually for five years. The new building improvements and personal property investments are estimated to generate about $107,800 in property taxes for each year during the five-year abatement period.

During the brief deliberations, Stephen Kunsleman (Ward 3) wanted to know how previous abatements had worked out with Picometrix. The city’s CFO, Tom Crawford, told Kunselman it had worked out well – they’ve met their requirements. Kunselman noted he’d had a tour of the facility and said it’s very impressive.

Outcome: On separate votes, the council unanimously approved the Picometrix tax abatement and the setting of a public hearing on Arbor Network’s abatement request.

Property Assessed Clean Energy (PACE) Program

The council considered a resolution to formally express its intent to establish an Energy Financing District and a Property Assessed Clean Energy program (PACE). The resolution also included setting a public hearing for the council’s first meeting next month, on Oct. 3, 2011.

The resolution of intent refers to a report, which describes in detail the project and property eligibility for PACE, as well as project size, application process, and financing, among other elements.

At its March 7, 2011 meeting, the council had voted to set up a $432,800 loan loss reserve fund to support the city’s planned PACE program. The money for the fund comes from an Energy Efficiency and Conservation Block Grant (EECBG) awarded to the city by the U.S. Department of Energy.

Through its PACE program, the city of Ann Arbor will help commercial property owners finance energy improvements through voluntary special assessments. By establishing a loan loss pool, the city can reduce interest rates for participating property owners by covering a portion of delinquent or defaulted payments. [Some previous Chronicle coverage of PACE: "Special District Might Fund Energy Program"]

After the public hearing, the city council would still need to pass a resolution establishing the program.

During deliberations, Carsten Hohnke (Ward 5) asked Matt Naud, the city’s environmental coordinator, to sketch out how the program works. Naud also brought Wendy Barrott to the podium, who is coordinating the PACE program for the city. One point that was highlighted was the fact that the state enabling legislation currently covers only commercial property, but that includes multi-family housing.

Sabra Briere (Ward 1) noted that she was already fielding questions about when property owners can apply, and she drew out the fact that on Oct. 3 after the public hearing, the council can establish the program. At that point the city can accept applications from commercial property owners who already have an energy assessment in place.

Outcome: The council voted unanimously to pass the resolution of intent to establish a PACE program.

Same-Sex Benefits

On the agenda was a resolution urging Gov. Rick Snyder not to sign House bills 4770 and 4771, which prohibit public employers from providing certain benefits to public employees and which will eliminate benefits for domestic partners of the same gender.

Steve Powers, the new city administrator, shares a laugh with Sandi Smith (Ward 1) before the Sept. 19 meeting.

The language of the resolution notes that a number of public entities provide health care benefits for domestic partners of either gender – including the state of Michigan, public universities, as well as city and county governments, and public school districts.

The resolution was sponsored by Sandi Smith (Ward 1).

Jeff Irwin – a Democrat who represents state House District 53, which includes most of Ann Arbor – voted against the bills and argued on the House floor against them: “If this becomes law, we will have two employees working side by side with the same qualifications and experience and the employee living in a traditional family will receive significantly greater compensation. That is clearly unfair and discriminatory.”

The council resolution reaffirmed Ann Arbor’s “commitment to a diverse and accepting culture.”

Smith led off the brief deliberations by saying that Ann Arbor has always been a leader in human rights. She noted that many public employers provided benefits to domestic partners. She cast it as an economic issue – it’s about attracting talent to Michigan, she said. If Michigan puts forward that it’s intolerant, Michigan will not be able to attract the best and the brightest.

Mayor John Hieftje said he appreciated Smith bringing it forward. She’d done a good job of citing the reasons, he said.

Outcome: The council voted unanimously to urge Gov. Rick Snyder not to sign the two bills affecting same-sex benefits.

Cleaning Contract

The council was asked to authorize a $580,680 cleaning contract with Kristel Cleaning Inc. for janitorial service at the city’s municipal center, Wheeler Service Center, the water treatment plant, the Ann Arbor Senior Center and various smaller locations.

The contract had been postponed from the council’s Sept. 6 meeting, when Sandi Smith (Ward 1) had raised questions about the need for a 5-day cleaning schedule for the new municipal building and city hall.

At the Sept. 6 meeting, Smith had wanted to understand what factored into the frequency of cleaning: Does it depend on the number of public visitors or the number of people who work there? What are the problems with a 3-day schedule? Alluding to the fact that the city had dropped down to a 3-day schedule from a 5-day schedule, mayor John Hieftje suggested that it would be appropriate to ask if the city is spending more for cleaning now than three years ago. Interim city administrator Tom Crawford had said “fruit flies and critters like that” were an example of some problems with the 3-day schedule.

The council did not deliberate on the resolution at its Sept. 19 meeting.

Outcome: The council voted unanimously to approve the cleaning contract.

Thank You to Interim City Administrator

The council acted on a resolution to recognize the service of the city’s CFO, Tom Crawford, who served as interim city administrator from the end of April until Sept. 15.

New city administrator Steve Powers attended his first council meeting. He’d attended a work session the previous week, though he had not officially assumed the post at that time.

Marcia Higgins (Ward 4) introduced the resolution, added late to the agenda. She said Crawford would be given a $10,000 bonus in recognition of his service. [Crawford was selected from internal candidates who applied to be interim administrator.]

In accepting the acknowledgment and the ovation he received from the council, Crawford’s comments were brief, saying that the work that gets done is done by city staff.

Outcome: The council voted unanimously to approve Crawford’s bonus.

Local Development Finance Authority (LDFA) Board Membership

On Monday’s agenda was a resolution to amend the agreement between Ann Arbor and the city of Ypsilanti so that a councilmember who serves on the local development finance authority (LDFA) board will not serve on that board past the time they are a member of the city council.

Under the change to the agreement, the city council representative to the LDFA board would cease to be a member of the LDFA immediately when that person ceases to be a member of the city council. The change addresses the fact that appointments to the LDFA board are for four years, while councilmembers are elected to just two-year terms on the council.

To take effect, the change must still be approved by the Ypsilanti city council, and then the LDFA board must change its bylaws to be consistent with the agreement.

The change was previously discussed at the council’s July 18, 2011 meeting, when Stephen Rapundalo (Ward 2) was appointed by his council colleagues to a four-year term on the LDFA. Rapundalo, a Democrat, faces a challenge in the Nov. 8 general election from Jane Lumm, who is running as an independent. Lumm has assembled a long list of endorsements from prominent Democrats and Republicans.

The LDFA is funded through tax-increment financing (TIF) in a manner similar to the way the Ann Arbor Downtown Development Authority is supported. A TIF district allows authorities like the LDFA and the DDA to “capture” some of the property taxes that are levied by other municipal entities in the district. The LDFA contracts with the economic development agency Ann Arbor SPARK for various business development services. [For more background on the LDFA, see Chronicle coverage: "Budget Round 5: Economic Development"]

Rapundalo explained that the bylaws for LDFA board appointments, specifically with respect to councilmembers, are inconsistent with the agreement. But the agreement between Ypsilanti and Ann Arbor has to be amended first.

Marcia Higgins (Ward 4) wanted to know when the Ypsilanti city council was meeting to decide the issue. At their Oct. 4 meeting, Rapundalo said.

Outcome: The council voted unanimously to approve the change in the Ypsilanti-Ann Arbor LDFA agreement.

Leaf Trucks

In his first communication as city administrator, delivered earlier in the meeting, Steve Powers had ticked through the various options available to residents for leaf pickup – carts, bags, or mulching in place.

Steve Powers, Ann Arbor city administrator.

The council was asked to consider a resolution to rent eight rear-load trucks for $138,000 for use in connection with fall leaf collection.

Sue McCormick, public services area administrator, answered some questions from councilmembers about the truck rental.

Sabra Briere (Ward 1) noted that the city no longer picks up leaves by asking people to rake them into the street, and instead requires residents to use carts or bags. McCormick allowed that Briere was right – the trucks to be rented simply supplement the city’s regular trucks, and reduce the number of times that trucks would need to be emptied as they cover their routes. They supplement the fleet, she explained.

In response to a query form Sandi Smith (Ward 1), McCormick said that when the city budgeted for 2011, it expected to save $104,000 by moving to containerized leaf collection. In fact, there’d been a $200,000 reduction. She cautioned that the figure was unaudited. For the 2012 fiscal year, the city is estimating $150,000 in savings, she said. There would be a slight increase in truck rental costs, she said, but it’s still expected to be more efficient than bulk leaf collection.

Communications and Comment

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

Comm/Comm: City Council Liaison to Housing Commission

During council communications at the conclusion of the meeting, Stephen Kunselman (Ward 3) elicited from mayor John Hieftje that Hieftje had decided not to accept Kunselman’s offer, made at the council’s Sept. 6 meeting, to serve as the city council’s liaison to the Ann Arbor Housing Commission.

The post of council liaison to the commission became vacant when it was announced at the council’s Aug. 4 meeting that Tony Derezinski (Ward 2) had volunteered to replace Jeff Meyers on the city’s public art commission, if some other councilmember could be found to replace Derezinski as housing commission liaison.

Hieftje announced at the Sept. 19 meeting that two councilmembers had volunteered to be the housing commission liaison: Kunselman and Margie Teall (Ward 4). Hieftje said he’d be bringing forward Teall’s name as the nomination at the council’s next meeting.

Were Kunselman appointed as council liaison to the housing commission board, he would have been working closely with a body that now includes Leigh Greden, whom Kunselman defeated in the 2009 Ward 3 Democratic Party primary election. Teall was one of Greden’s strongest allies on the council during the time that he served.

Comm/Comm: Welcome to New Administrator

Mayor John Hieftje welcomed new administrator Steve Powers to his first council meeting.

Powers thanked the council for its confidence in him. He said he was excited to be living in Ann Arbor. He was eager to join the team and to move the community forward.

Comm/Comm: Video Surveillance Ordinance

Sandi Smith (Ward 1) has told her colleagues at previous meetings that she expected a video surveillance ordinance to be brought forward soon. She told them there’d been some additional concerns about homeland security issues that had delayed it. She thought it would be ready for the council’s next meeting and the text would be available well before the next meeting.

Comm/Comm: Audit Committee

Stephen Kunselman (Ward 3) said he was a member of the audit committee and there had not been a meeting held the previous year, but that he would try to meet with the auditor to discuss the FY 2011 audit this year. [Other members of the council's audit committee include: Carsten Hohnke (Ward 3), Stephen Rapundalo (Ward 2), Sandi Smith (Ward 1) and Margie Teall (Ward 4).]

Rapundalo responded to Kunselman’s point on the audit and the apparent lack of a meeting. He said the decision not to call a meeting of the audit committee was based on the fact that there was little to discuss in the report and that instead, the audit came to the full council, which accepted it and passed it. There was no need to meet, he said. Rapundalo said he was awaiting the FY 2011 audit to see if it merits a meeting of the audit committee or if it can go straight to the full council.

Comm/Comm: A2OpenBook

At the Sept. 19 meeting, CFO Tom Crawford announced the launch of A2OpenBook, an online tool that residents can use to follow the city’s revenues and expenditures. The information on the system is refreshed daily from the city’s LOGOS financial system.

The online system allows users to look at expenses and revenues by service area, by fund and by expense type. The information is downloadable in MS Excel format so that users can search for and manipulate data as desired. Information is available for expenses beginning July 1, 2010 – data is updated daily.

There’s a possibility that data for P-Cards – the city’s purchasing cards – might be added in a second phase of the project.

A similar system – called OpenBook – was launched a year ago by Washtenaw County government.

Comm/Comm: Public Speaking Time

Michael Benson introduced himself as a Ward 2 resident. He noted that councilmembers might also recognize him as president of the University of Michigan graduate student body, but he said that’s not why he was there.

Benson led off by thanking councilmembers for their service. He pointed out that the council would soon be reviewing its rules. [This is a regular activity each November after the new edition of the city council is elected.] With respect to public speaking turns, he asked that the council enforce the current rules. Specifically, in selecting speakers for the 10 slots available at the start of a meeting, people who are speaking on agenda items are supposed to be given priority over those who are not speaking directly to some agenda item.

Benson also asked the council to consider looking at the topic of diversity. The whole point of Michigan’s Open Meetings Act is to let people participate, he said. Benson also noted that some people speak on similar issues over and over again – it might be useful to give preference to people who have not spoken at an immediately preceding meeting.

Comm/Comm: Sidewalks, Line-of-Sight

Kathy Griswold began by thanking the city for its cooperation with the Kiwanis Club – the council had agreed at its Sept. 6 meeting to lease part of the building at 415 W. Washington to Kiwanis for its warehouse sale.

Alluding to the Dexter Avenue sidewalk assessment the council had voted on, Griswold noted that for a section of sidewalk near King Elementary that would need to be installed to allow moving a crosswalk to a four-way stop intersection, neighbors had been willing to pay for it. She pointed to an ongoing $5,400 expense for a crossing guard that could be eliminated if the crosswalk were moved.

Griswold pointed to a problematic area located off Stone School road where branches are obscuring sight lines. On Sept. 9, a woman pulled out and was hit by someone travelling southbound, Griwold reported. She said she sent photos to the police chief. We shouldn’t have to wait for an accident, she said. There needs to be adequate site distance.

Comm/Comm: Recall Snyder

Thomas Partridge introduced himself as an advocate for people who can’t attend the meetings. He called on people to support the recall of Gov. Rick Snyder and other Republican members of the legislature. He called on everyone to protect the most vulnerable citizens – ethical access to law enforcement and affordable transportation, housing and education and health care. Things are going downhill under Gov. Snyder, and under the Republican-dominated U.S. Congress, he contended. He asked people to re-examine their political viewpoints and to unite everyone under a new governor.

Later, during public comment time at the end of the meeting, Partridge reiterated complaints he’s made before the Ann Arbor Transportation Authority board about quality of service provided by AATA. Responses from the AATA are too often surly and resentful, he said.

Comm/Comm: Energy Farms

Kermit Schlansker called for a variety of approaches to deal with the diminishing resources caused by increased affluence. He told the council that solutions needed to be found for feeding and housing the poor. He described a wide range of initiatives, including the planting of nut trees in city parks and digging cisterns. He called for the creation of energy farms that would include biomass digesters, solar and wind energy generation.

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

Next council meeting: Oct. 3, 2011 at 7 p.m. in the council chambers at 301 E. Huron. [confirm date]

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Instead, a substitute resolution was put forward directing the city administrator to negotiate a contract revision offered by RecycleBank that would reduce the per-household charge by about one-third, from $0.52 to $0.35 – which translates into a monthly payment reduction from $12,400 to $8,371. Under the new to-be-negotiated contract, if the tonnage of recyclables collected increases above current levels, RecycleBank could earn an additional $50 per ton, for each ton collected above existing levels. There would be a cap of $150,000 per year.

The resolution to cancel the contract had been postponed from the council’s Aug. 4 meeting. The cancellation resolution indicates termination would have given savings to the city of $149,167 per year on that contract. RecycleBank would have been entitled to $120,000 for the depreciated cost of equipment in recycling trucks as part of this program.

The impetus for canceling the contract had been based in part on skepticism that the first year’s worth of data really showed a measurable positive impact on recycling in Ann Arbor due purely to ReycleBank’s coupon incentives.

The interest in canceling the contract was also based in part on a desire by some councilmembers to find replacement revenue to fund a $107,042 annual increase in the contract with Recycle Ann Arbor (RAA), the company that the city hires to empty the curbside recycling carts. That increase was seen as necessary due to the financial stress under which RAA was operating, exacerbated in part by the lower-than-expected value of the contract with the city. The city deployed fewer curbside carts citywide than projected, and because RAA’s contract was based in part on the number of carts deployed, it received less revenue than had been forecast.

The financial stress at RAA may have played a role in the replacement a few weeks ago of its CEO, Melinda Uerling. The RAA website now lists Kirk Lignell in that position.

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

From left: Stephen Kunselman and Mike Anglin congratulate each other on winning their respective Democratic primary elections two days earlier. Kunselman represents Ward 3. Anglin represents Ward 5. Both are incumbents. (Photo by the writer.)

That assurance was enough for now to hold off a council discussion of an explicit restriction on the street/sidewalk repair tax – a restriction that would prevent those tax monies from being used to pay for public art under the city’s Percent for Art program. At the meeting, the council approved ballot language for Nov. 8 that will ask voters to renew the street repair tax (at a rate of 2.0 mills) as well as to approve an additional tax to repair sidewalks (at a rate of 0.125 mills).

But no discussion took place on a possible restriction on those monies in connection with public art. It’s technically possible for the council to revisit the issue at its next meeting, on Aug. 15, which falls one day before the ballot language must be filed, according to the state election statute.

If the discussion of appropriate funding mechanisms for public art is pushed to September, it will join another topic the council voted at its meeting to postpone for two months – termination of the city’s contract with RecycleBank. That company administers a coupon-based incentive program in connection with the city’s new single-stream recycling program.

It was a year ago, in July 2010, that the new single-stream system replaced Ann Arbor’s decades-old dual-stream system. Councilmembers questioned the evidence that RecycleBank’s program had any significant impact on residents’ recycling behavior. The measure needed an eight-vote super majority of the 11 councilmembers, and based on deliberations, there were only seven clear votes to terminate. But instead of voting, the council postponed the issue.

The council did take action on a related recycling issue, voting to increase its annual contract with Recycle Ann Arbor, which empties the curbside recycling carts set out by residents. The increase was set for $107,000 a year and was meant to offset diminished revenue that Recycle Ann Arbor was getting under the contract, due to a smaller number of carts being deployed in the city.

In other business, the council gave final approval to changes in employee benefits. It also approved terms of a contract with Steve Powers, who on Sept. 15 will become the city’s newest employee as city administrator. Highlights include a $145,000 base salary and participation in a 401(a) plan instead of the city’s pension system.

Allen Creek was the geographic focus of two items on the agenda. The council approved another extension to the purchase option agreement with Village Green – for the City Apartments project to be located at First and Washington. The council also approved a general expression of support for the idea of constructing a greenway in the Allen Creek corridor.

The council also approved revisions to the proposed Burton Commons housing development, located on Burton Road near Packard and US-23. And receiving initial approval were changes to the boundaries for the city’s five wards.

Highlights of council communications came from Sandi Smith (Ward 1) and Stephen Kunselman (Ward 3). Smith alerted her colleagues to possible legislation she’d be bringing forward in the future that would restrict video surveillance. Kunselman announced that he would eventually be bringing forward possible revisions to the city’s ordinance that governs how its downtown development authority operates.

A highlight from public commentary was praise heaped upon the Ann Arbor police chief, Barnett Jones, by a representative of the Washtenaw Interfaith Coalition for Immigrant Rights (WICIR).

Public Art Commission, Percent for Art

At the Aug. 4 council meeting, mayor John Hieftje nominated Ward 2 council representative Tony Derezinski to replace Jeff Meyers on the Ann Arbor Public Art Commission. The nomination will require confirmation by the city council at its next meeting.

Meyers resigned in June of this year, mid-way through his three-year term, partly over frustration that the mural project he’d championed kept hitting bureaucratic roadblocks. In an interview with The Chronicle, Meyers had suggested that one way to improve the situation is for a city council representative to be appointed to AAPAC – it seems especially appropriate since AAPAC makes recommendations for the Percent for Art budget, he said. [Chronicle coverage: "After Resignation, Who Leads Mural Program?"]

What made Derezinski’s nomination somewhat unusual was the timing of Hieftje’s announcement. It came during a communications slot on the agenda, towards the start of the meeting. Nominations are a standard part of every meeting agenda template, and appear towards the end of the meeting.

Hieftje said he’d been looking into the art commission, and had met and talked with various people. The feedback he’d heard is that people support the public art program, but want to know where the art is. A profusion of art in the city hasn’t happened as a result of the program, he said. This is not the same situation as with the housing commission, he added. [In March 2010, the city council undertook the wholesale replacement of the city's housing commission. Derezinski was the city council liaison to the housing commission.] Hieftje said that Derezinski was willing to be appointed to the public art commission, if someone else would step forward to become the liaison to the housing commission.

The mayor continued by saying he wants to pause in September to take a look at why there isn’t more art in the city. He acknowledged that there’d been a proposal by Marcia Higgins (Ward 4) [in connection with the past year's budget discussion] to reduce the percentage allocation to art. The council might decide to do that, he said, but he wanted to bring that discussion forward for September.

With that, the mayor effectively headed off debate later in the evening about the public art ordinance in connection with the street and sidewalk millage ballot language. Some councilmembers had been interested in altering the proposed millage charter language to specify that the street/sidewalk millage funds should not be used for public art.

It’s technically possible for the council to revisit the issue of revising the millage language and the corresponding ballot language at its next meeting, on Aug. 15, which falls one day before the ballot language must be filed, according to the state election statute.

The Percent for Art program is enabled by a city ordinance that allocates 1% of the budget for all city capital projects – up to a limit of $250,000 per project – to the city’s public art program. The street reconstruction millage will expire this year, unless it is approved by the general electorate on Nov. 8.

Although some councilmembers went to the Aug. 4 meeting prepared to argue for a restriction on the street/sidewalk millage – preventing it from being used to acquire public art – the issue was not explicitly floated.

Street, Sidewalk Millages

The council was asked to approve language for the Nov. 8 ballot that would renew the street and bridge reconstruction millage, at a rate of 2.0 mills. It was last approved by voters in November 2006 – for five years beginning in 2007 and ending in 2011. A tax rate of 1 mill is equivalent to $1 for every $1,000 of a property’s taxable value.

Also before the council was language for a separate proposal: Voters will be asked if they support an additional 0.125 mill to pay for sidewalk repair. Up to now, sidewalk repair has been the responsibility of property owners.

The ballot language for the street repair millage will read:

“Shall the Charter be amended to authorize a tax up to 2 mills for street and bridge reconstruction for 2012 through 2016 to replace the previously authorized tax up to 2 mills for street reconstruction for 2007 through 2011, which will raise in the first year of levy the estimated revenue of $9,091,000?”

The ballot language for the sidewalk portion of the street repair millage will read:

“Shall the Charter be amended to authorize a tax increase of up to 0.125 mills for 2012 through 2016 in addition to the street and bridge resurfacing and reconstruction millage of 2 mills for 2012 through 2016, which 0.125 mills will raise in the first year of levy the estimated additional revenue of $563,000, to provide a total of up to 2.125 mills for sidewalk trip hazard repair in addition to street and bridge reconstruction and resurfacing? This Charter amendment shall not take effect unless the proposed Charter amendment to authorize the levy of a tax in 2012 through 2016 of up to 2 mills for the purpose of providing funds for the reconstruction and resurfacing of streets and bridges (Proposal 1) is approved.”

If both millage proposals were to be approved by voters, the money would be collected under a single, combined millage – but accounting for reconstruction activity would be done separately for streets and sidewalks.

The separation of the question into two proposals can be explained in part by a summary of responses to the city’s online survey on the topic of slightly increasing the street repair millage to include sidewalk repairs. The city’s survey reflects overwhelming sentiment from the 576  survey respondents (filtered for self-reported city residents) that it should be the city’s responsibility to repair the sidewalks.

But the survey reflects some resistance to the idea that an increase in taxes is warranted. From the responses: “Stop wasting taxpayer money on parking structures, new city buildings, and public art. You are spending money like drunken sailors while we’re in the worst recession since the Great Depression.” Balanced against that are responses like this: “I strongly endorse the idea of the city taking responsibility for maintaining the sidewalks and am certainly willing to pay for it in the form of a millage in the amount cited in this survey.” [.pdf of survey response summary]

A millage levy is a change to the city’s charter, and the procedure for changing the city’s charter is set forth in Michigan’s Home Rule City act, which reads in relevant part:

117.21 Charter amendment; procedure. Sec. 21.
(1) An amendment to an existing city charter, whether the charter was adopted under this act or formerly granted or passed by the legislature for the government of a city, may be proposed by the legislative body of a city on a 3/5 vote of the members-elect or by an initiatory petition.
… The purpose of the proposed charter amendment or question shall be designated on the ballot in not more than 100 words, exclusive of caption, that shall consist of a true and impartial statement of the purpose of the amendment or question in language that does not create prejudice for or against the amendment or question. The text of the statement shall be submitted to the attorney general for approval as to compliance with this requirement before being printed. …
(3) A proposed charter amendment shall be confined to 1 subject. If the subject of a charter amendment includes more than 1 related proposition, each proposition shall be separately stated to afford an opportunity for an elector to vote for or against each proposition. …

Sidewalk/Street Millage Ballot Proposal

Sabra Briere (Ward 1) asked assistant city attorney Abigail Elias to describe the city’s progress so far with the attorney general review of the ballot language, as required under the Home Rule City Act. Elias explained that the AG had expressed some concerns, but that it was not yet the final review. She stated that she was “baffled” by the AG’s analysis, which she attempted to lay out for the council. On the first proposal, if someone votes for the street millage for up to 2.0 mills, and if voters then approve the second proposal, which is to allow use of up to 2.125 mills for both streets and sidewalks, then that negates the vote for 2.0 to be used just for streets – according to the AG. Elias said she felt that “voters are smarter than that.”

Some back and forth between Elias and Briere established that if there’s a negative response from the AG, then it comes back and the council can make a revision or can approve the original. Elias said that it’s the AG’s view that he doesn’t like the ballot language. But Ann Arbor has overridden the attorney general opinion on ballot language in the past – this wouldn’t be the first time. The last time that had been done, Elias said, was in connection with the city’s charter amendment on medical marijuana. Briere said she thought that was a charter change initiated by a citizen’s referendum, so that put it in a different category. Elias insisted that it had been language that the city of Ann Arbor had prepared and submitted.

Briere brought up the issue of how accounting would work for sidewalk funds and street funds. Elias stated that it’s a segregation of funds issue – that’s not a legal issue.

Stephen Rapundalo (Ward 2) noted that in the past, it’s been a subsequent policy decision made by the council as to how the millage is administered. [Rapundalo was alluding to the administrative policy on use of the park maintenance and capital improvement millage.]

Homayoon Pirooz, head of the city’s project management unit, was called to the podium. He said the result of the city’s public engagement process on the issue of a sidewalk repair millage was a clear message from residents that they wanted the city to take responsibility for sidewalk repair. But residents also want the city to keep track of expenses to show what work has been done. There is no formula for figuring out how many sidewalks need to be replaced, he said. In the first year there might be $300,000 worth, but what happens if more work is needed? Do we stop work at that point? What if it’s an unsafe condition and the city waits until next year, leaving it unsafe?

In response to a question from Briere, Pirooz estimated that about $1.4 million had been spent annually by property owners in the last five years, as the city has administered a sidewalk repair program in which property owners are responsible for repairing sidewalks. That totaled around $7 million. However, the city assumes that in the last five years the unsafe sidewalks will have been repaired, so the $500,000 that the millage would generate each year should be enough to get the program going, he said.

If passed by voters in November 2011, taking effect in January 2012, Briere wondered when the city could start spending the money on sidewalk repairs – in the spring or in July? Pirooz answered that the $500,000 would pay for roughly 2.7 miles of sidewalk and that could be completed in a few months – plenty of time before the end of the 2012 construction season.

Stephen Kunselman (Ward 3) said he’d be supporting putting the sidewalk millage on the ballot. The quality of work done by resident-hired contractors had varied tremendously, he said. Kunselman stressed that many residents need more assurance there’ll be a more vigorous response to ensure that property owners who have been notified under the current program that their sidewalks need repair are actually held accountable for that. He wanted to make sure that if a property owner has been notified that their sidewalks are in need of repair, then the expense – if now performed by the city – is not charged to the millage. Sue McCormick assured Kunselman “there’s no escape.” The city has GIS records and photographs as documentation, and property owners who have not repaired their sidewalks as required over the last five years will not avoid paying for the repairs.

Mayor John Hieftje said that some voters will reason that they themselves have repaired three sidewalk slabs in front of their own house and don’t want their vote to bail out others, who have been notified of sidewalk slabs in need of repair but have not taken action. McCormick said that typically it’s some specific property that such a voter has in mind, and it always turns out that the non-compliant property is on the city’s list.

[By way of example, a Tweet sent out by Trevor Staples noted that sidewalks adjacent to railroad property are in disrepair. Brad Kluczynski, who oversees the city's sidewalk repair program, wrote in an email to The Chronicle that the location is known to the city, and the city of Ann Arbor is actually Ann Arbor Railroad's contractor for sidewalk repair – it's on the list.]

Briere then offered an amendment to the resolution that directs the city attorney to prepare an ordinance revision changing the responsibility of sidewalk repair from adjacent property owners.

Tony Derezinski (Ward 2) wondered if the amendment to the resolution was even necessary – wouldn’t that happen anyway? Elias confirmed that it would be done anyway, but that she did not have a problem with the amendment language. She told Derezinski that the state AG would not be reviewing any ordinance change, but rather only the ballot language.

Outcome on amendment: The council voted unanimously to amend the resolution on the sidewalk repair millage.

Outcome: The council unanimously approved, on separate votes, to place on the ballot two separate proposals – a street repair millage (2.0 mills) and an additional sidewalk repair millage (0.125 mills) to be added to the street repair millage.

Recycling

Two items on the council’s agenda related to recycling. First was an increase by $107,000 of the city’s contract with Recycle Ann Arbor (RAA) for curbside service of the city’s single-stream recycling carts.

Also before the council was a proposal to terminate its contract with RecycleBank. RecycleBank is a company that administers a coupon-based incentive program to encourage residents to recycle.

Recycling: Background

The Recycle Ann Arbor contract change reflected the council’s choice to revisit a decision it had made at its July 5, 2011 meeting to reject that contract change. The decision to reconsider the July 5 vote came at the council’s July 18 meeting, which the council then postponed until Aug. 4.

Sabra Briere (Ward 1) is interviewed by WEMU's Andrew Cluley after the city council's Aug. 4 meeting.

The change reflects a bump from $3.25 to $3.55 per month per cart, for a total of $107,042 annually. The city council had voted on March 15, 2010 to adopt the single-stream recycling program, which began a little over one year ago, on July 5, 2010.

At that time, the city approved a contract with RAA that called for a payment of $3.25 per month for each cart that is deployed in the city (whether it is set out for collection or not), plus a per-ton payment of between $18.74 and $30.00. The amount of revenue RAA has received through these two kinds of payment was less than projected for the last fiscal year. Specifically, the tonnage payments received by RAA for fiscal year 2011 (which ended June 30) for recyclable material were projected to be $406,332 but in fact only generated $187,560 for RAA – only 46% of what was expected. The shortfall was $218,772.

Also, the city expected to distribute 32,779 carts, but it turned out that only 29,734 carts were deployed, or 9.3% fewer than planned. A staff memo accompanying the July 18 resolution explained the reduced number this way: “… many of the smaller multi-family residential units that were previously using the 11-gallon recycling ‘totes’ are able to share recycle carts, resulting in a smaller number of deployed carts.” In terms of revenue, the reduced number of carts meant that RAA received only $1,159,626 compared to the projected $1,278,381 – for a shortfall of $118,755.

Summing the shortfalls in the two kinds of revenue ($118,755 + $218,772), RAA received $337,527 less than it expected for FY 2011. The increase in the monthly per-cart service fee – approved by the council for all five years of the five-year contract – works out to nearly cover the annual shortfall that was due only to the decreased number of carts: $107,042 versus $118,755.

The overly-optimistic projections were made by the city’s recycling consultant Resource Recycling Systems based on data provided by RecycleBank. During public commentary on Aug. 4, a representative of RecycleBank objected to the fact that RecycleBank data on single-family households had been used, without its knowledge, to make projections about multi-family households.

When the council approved the single-stream recycling contract with RAA last year, it also struck a 10-year deal with RecycleBank to administer a coupon-based incentive program to help boost recycling rates in conjunction with the single-stream rollout.

Also before the council at its Aug. 4 meeting was a resolution giving direction to city staff to give RecycleBank 30-days notice of cancellation of its contract with the city. The resolution indicates termination would give savings to the city of $149,167 per year on that contract. RecycleBank would be entitled to $120,000 for the depreciated cost of equipment in recycling trucks as part of this program. RecycleBank also has claimed that it would be entitled to an additional amount up to $80,000 due to the timing of the cancellation. The council’s resolution stipulates that city staff are to proceed with termination of the contract only if the cost of termination is $200,000 or less.

Of 624 respondents to an online survey conducted by Sabra Briere (Ward 1), only 11% said they opposed canceling the coupon contract and allocating the funds to Recycle Ann Arbor’s contract instead. Only 13% said that they’d both signed up for the coupon program and felt like it had increased the amount that they recycle. Of those residents responding to the survey, 99% indicated that they recycle.

Recycling: Public Commentary

Atul Nanda spoke on behalf of RecycleBank. He noted that a month ago [July 5, 2011] the council had been presented with a report requesting additional funding for Recycle Ann Arbor based on shortfalls of revenue in their contract for the number of carts set out and for tonnage collected. The report had suggested that the tonnage projections were based on information provided by RecycleBank, Nanda said. During the development of the partnership between RecycleBank and the city, RecycleBank was asked to provide data about their program in other cities where it’s been implemented in single-family households only. Outside of RecycleBank’s knowledge, Nanda said, the data was used to make projections for both single-family and multi-family households.

Nanda said the resolution asking for additional funding for Recycle Ann Arbor acknowledges that: (1) the projected number of single-family and multi-family units was inaccurate; and (2) multi-family units were assumed to recycle more than single-family households. While he understood the impact on Recycle Ann Arbor, RecycleBank should not be penalized, said Nanda – the data RecycleBank had provided was clearly for single-family households. The goal in the first year was to implement the RecycleBank program in single-family households, measure the impact, adjust accordingly and then expand to multi-family units.

Nanda noted that RecycleBank had forwarded a report to councilmembers on July 29, highlighting key benefits of the partnership. One benefit is a 36% increase in recycling in single-family households. He said that RecycleBank acknowledges that 20% of it was just due to the implementation of the single-stream system. The other 16%, he contended, was due to RecycleBank. Nanda noted that residents registered with the RecycleBank program set out their carts far more frequently, compared with those who are not registered.

Nanda also claimed a financial impact of $160,000 from avoided landfill costs, increased commodity revenues and savings to residents. RecycleBank has also invested in the community by hiring local staff. From the first 10 months, he said, RecycleBank’s program has demonstrated both economic and environmental benefits. RecycleBank has also provided the city with better recycling data than it has ever had access to in the past, he said.

Nanda said it’s hard to understand that even though the results of the program are positive, RecycleBank is not being recognized for that. RecycleBank has also not been asked to sit down with its partners to address the shortfall that Recycle Ann Arbor has experienced. Instead, the media has been used to evaluate the program, he said, without the typical dialogue that would take place between two business partners.

Recycling: Council Deliberations – Recycle Ann Arbor

Sabra Briere (Ward 1) led off deliberations on the Recycle Ann Arbor contract, saying the council had initially voted against it [5-4 on July 5], but councilmembers had not discussed it. Briere said her logic at the time was that by allotting $107,000 to Recycle Ann Arbor, the fund balance for the solid waste fund would take a significant hit. It would take the anticipated deficit by 2017 from $0.5 million up to over $1 million. And that was more than she’d be willing to support, she said. She was really uncomfortable with the idea of approving this expense and then having to reassess how trash pickup is done in the city. [She was alluding to possible ideas floated by city staff at a recent work session that ranged from altering how carts are set out to franchising out trash collection.]

Stephen Kunselman (Ward 3) echoed Briere’s comments. He also voted against the contract revision the first time around, but had supported bringing it back up. He stressed the need to hold city staff and the city’s consultants accountable. There’s no need to point fingers or assign blame, he said, but there needs to be accountability. He hoped that other councilmembers would support both resolutions.

Sandi Smith (Ward 1) said she hoped that the two resolutions are unbundled in everyone’s mind. She said she was not as concerned about the projected long-term deficit in the solid waste fund, because the city had not yet begun to look at implementing various cost-saving measures. [Potentially among those measures are placement of recycle and trash carts on alternating sides of the streets in some locations, to reduce the number of miles driven on a particular route.] Smith said that in her opinion, there are opportunities to do pilot programs. She said she hoped that the vote to adjust Recycle Ann Arbor’s contract is not hinged on eliminating RecycleBank’s contract.

Margie Teall (Ward 4) also hoped that other councilmembers would look at the two resolutions as separate. She said she was thankful the Recycle Ann Arbor contract is being brought back. [Teall was absent for the first vote on July 5, as was Smith.]

Carsten Hohnke (Ward 5) clarified with Sue McCormick, the city’s public services area administrator, that there are two pay elements in the Recycle Ann Arbor contract: (1) number of carts; and (2) tonnage. Hohnke confirmed that in contract negotiations with Recycle Ann Arbor, the city provided an estimate for the carts in the field and that’s the number that partly determined revenue.

McCormick also confirmed that the city had worked with its consultant on the projected tonnage and had suggested the economic model for the contract. Hohnke asked for some clarification on why a smaller number of carts ended up being deployed. McCormick told Hohnke it was really a matter of working with multi-family households as the city went through deployment – “They told us what they wanted.” The consultant’s estimate was not based on contacting the occupants of multi-family units, she said. McCormick said that what the city is seeing is a lot of sharing of carts.

Hohnke said he supported reconsidering the issue. He’d voted no previously, because the council had identified a problem without a solution. The council was simply asked to provide additional funding. At the time, the council didn’t have enough information to address the problem. However, he continued, it’s much clearer now. A significant portion of the shortfall is outside Recycle Ann Arbor’s ability to affect – the number of carts deployed. While any vendor should anticipate some variation, a 10% difference is significant, Hohnke said. He called Recycle Ann Arbor a long-time partner and home-grown contributor to solid waste efforts. He noted that Recycle Ann Arbor had done some painful work to reduce its own expenses, so he was willing to meet them part-way.

Hohnke concluded by saying he hoped the council would consider the second resolution that would terminate the RecycleBank contract. “They are related, in my mind,” he said.

Mike Anglin (Ward 5) asked what role Recycle Ann Arbor’s Calvert’s Roll-off Containers played. McCormick told him the issue is not related to that. Anglin also asked why the revenue the city gets from the operation of the materials recovery facility (MRF) is higher for city tonnage compared with non-city tons. Anglin ventured that it could be because the materials coming in from outside Ann Arbor are contaminated. McCormick explained that it’s not an issue with contamination, but rather that it reflects the contract with FCR, which operates the facility. The city gets a higher percentage when its recycled materials are sold. The city gets a smaller percentage of profits when non-city tons are sold.

Anglin also wanted to know why for fiscal years 2005-10 the audited spreadsheets don’t match up. McCormick explained that there is a difference between cash flow representation versus audit reports. The city’s financial plans are not audit sheet forecasts, she said.

For his part, mayor John Hieftje said it’s an issue of fairness. Recycle Ann Arbor actually founded recycling in Ann Arbor, he said. Recycle Ann Arbor had won this contract, and was in the middle of that contract when it had accepted the single-stream system and a revenue reduction. Recycle Ann Arbor deserves our support, he said. It’s a home-grown company and a nonprofit.

Hohnke asked how $107,000 impacts the budget for single-stream recycling. McCormick responded to Hohnke by saying that if they look at the projections and timeframe for the payback [on investments in the automated carts and improvements to the materials recovery facility], then the $107,000 is all well within those forecasts. Hohnke confirmed that the total amount of the contract for Recycle Ann Arbor would still be less than the contract Recycle Ann Arbor had prior to implementation of the single-stream system.

Outcome: The council vote unanimously to adjust the contract with Recycle Ann Arbor by $107,000 annually.

Recycling: Council Deliberations – RecycleBank

To parse the council deliberations, it’s useful to understand that Recycle Ann Arbor empties the curbside single-stream carts for both single-family residences and multi-family residences. However, the RecycleBank program is currently available only to residents of single-family homes. Much of the recycling tonnage data is an agglomeration of single- and multi-family residences, making it difficult to discern what if any effect RecycleBank is having on the recycling behavior of residents who are eligible for the program.

Sabra Briere (Ward 1) again led off deliberations, saying that the assumption was that the RecycleBank program would increase the number of people participating in the recycling program and the amount of material that is recycled. It’s difficult to see that either goal has been met, she said.

She then described the results of her own online survey she’d conducted, to which over 600 people responded. [.pdf of recycling survey results, including free-form responses]

Highlights of the survey results include the fact that 70% of those who’ve signed up for RecycleBank have not actually used coupons. Around 40% of respondents haven’t signed up for RecycleBank. Of those who responded, 99% recycle. Briere reported that many people responded saying they’re so grateful for the single-stream system. Some people say they put out their cart, if it’s empty or not. Some people said, if the city shaves something out of the budget, then shave RecycleBank.

Briere told her colleagues she wanted them to think about whether RecycleBank is meeting its goals and the needs of the community. She noted that if the council was asking the city staff to look at creative solutions to save money in the solid waste fund [like different schemes for trash/recycle cart set out], the council itself could not pass up an opportunity to realize savings. City staff could address the other challenges with a lower burden, she suggested, if the RecycleBank contract were terminated. She concluded by saying it’s not the right program for Ann Arbor.

Stephen Rapundalo (Ward 2) said he appreciated a communication the council had received from RecycleBank, but what was missing and still vague was the financial impact. He asked RecycleBank’s Atul Nanda about the total dollars that homeowners had received in rewards.

Nanda told him there are three areas of financial benefit. First there is the incremental impact of a 36% increase in recycling for which RecycleBank won’t take full credit. Of that increase, 20% is allocated just to the effect of the new single-stream system. But a 16% increase was claimed for RecycleBank. From that perspective, he said the city had avoided landfill costs of $55,000 in the first 10 months of the program (which is $75,000 per year).

The second component, Nanda said, is just from the coupon rewards ordered – that reflected an $80,000 savings. Finally, said Nanda, there was a positive impact on 39 local businesses with a economic co-spend of $250,000. Rapundalo asked Nanda to break down the total savings per household. Nanda provided an estimate based on the $80,000 in rewards and the roughly 10,000 households that are participating in the RecycleBank program: $8 per participating household, Nanda said.

Rapundalo asked what revisions had been made to the program in the last 10 months. Nanda explained that the reward offerings are reviewed at 6-month or 12-month intervals to see what is resonating well with residents. Rapundalo ventured that no changes have been made since the inception of the program. Nanda said he thought some changes had been made, but could not give exact examples.

For his part, Rapundalo said Nanda’s answer to the second question about value per homeowner was significant. He said he thrived on data and numbers – he appreciated Briere’s data. He said that as he was walking around Ward 2 during his Democratic primary election campaign, he’d heard comments that validated Briere’s survey results. He said there was a lot of sentiment that residents didn’t need an incentive – the switch to the single-stream carts was more than enough incentive. He also said he’d heard that the value from the coupons is fairly minimal. Those were comments he’d heard rather consistently, he said. When the council approved the program a year ago, at the time RecycleBank seemed like a program that would be beneficial, but it didn’t seem to have measured up, Rapundalo said.

Stephen Kunselman (Ward 3) said he’d voted against the contract when it first came before the council last year. He reminded his colleagues of his strong connection to Recycle Ann Arbor as a driver in 1987 – before the city had any kind of totes or bins. Ann Arbor has been recycling diligently and cooperatively for decades, he said. A coupon program was not going to help it. He noted that RecycleBank claims credit for only a 16% increase. There are a lot of other opportunities for coupons, he said, so canceling the contract would from that point of view not be a detriment to friends, neighbors, or families.

Sandi Smith (Ward 1) said she was not quite ready to terminate the contract for a number of reasons. If the average household is benefitting by $8, that means there are some households that are benefiting by much more, who balance out those who are not benefiting at all. She concluded that some people are spurred by the incentive program.

Smith noted that part of the reason for the incentive program was a desire to reach the student population and those who are more recent arrivals in Ann Arbor, who don’t yet have that “Ann Arbor influence.” A 16% increase is still an increase, she said. The reason for the increase is nebulous, she said. Do people recycle more because it’s more convenient? Or maybe people are responding to the coupon incentive? She said she was against terminating the contract that night for two reasons: (1) It was put on the agenda very late and she had not gotten enough resident input; and (2) she was willing to give the program another year before evaluating it.

Margie Teall (Ward 4) said she not ready to terminate the contract for similar reasons to Smith’s. The city still needs to reach multi-family houses. Teall asked what information the RFID tags in the carts provided. Sue McCormick explained that the RFID tags allow tracking which carts are set out. Weight is tracked by route, not by cart. McCormick said there has not been a lot of data yet. They’ve been at it only for 7 months – Recycle Ann Arbor changed how they track the data. The single-stream system had begun in July 2010, two months later was RecycleBank’s official start, then in February Recycle Ann Arbor had changed its routes. The data was hard to interpret and it was hard to be definitive, McCormick said.

Later in deliberations, Briere confirmed with McCormick that cancellation of the RecycleBank contract would not eliminate the city’s ability to continue to gather data via the RFID tags.

Teall asked when the data would be definitive. McCormick said the city’s solid waste coordinator, Tom McMurtrie, would like to see the RecycleBank contract continue through the fiscal year to get another six months worth of data. Teall wanted to wait until the program was extended to multi-family households. Teall concluded that she’d like to postpone the vote, saying that it’s much too soon.

Marcia Higgins (Ward 4) stated that the council had this conversation a year ago – they’d talked about coming back in a year to evaluate the program, and that was now. It’s a little upsetting not to have the data, she said. Speaking to her own household’s experience with the RecycleBank program, she said it’s fun to look at how many points you got, but she wondered what determines that. McCormick clarified that to earn points you have to have set out your cart, and weight is assigned by route.

Higgins concluded that the rewards program is not really individualized. She’s been disappointed in the range of rewards offered. She said only in the last three weeks had she seen a change. She was not in favor of continuing the contract.

Tony Derezinski (Ward 2) said he would go along with Teall’s view. He thought it might be premature to terminate now, and was willing to go to the end of the fiscal year [June 30, 2012].

Christopher Taylor (Ward 3) noted that RecycleBank has described allocating 2o% of the 36% increase to the overall single-stream system generally and the remaining 16% to RecycleBank. Taylor asked McCormick how confident she was in that assessment. McCormick attributed the estimate to the vendor, based on what RecycleBank has seen in other communities. McCormick said that Ann Arbor has a very high percentage of multi-family units in the mix – that can skew things.

Taylor then asked about costs incurred due to termination of the contract. The back and forth between Taylor and McCormick drew out the fact that if the contract were left in place until the end of the fiscal year, the cost of the depreciated equipment installed in trucks would drop from $120,000 to $90,000, and eliminate the potentially $80,000 contested by RecycleBank for early termination of the contract. But McCormick said that according to the city attorney, the early termination cost is not an issue. Taylor concluded that by waiting until the end of the fiscal year, the city would save $30,000 and eliminate the risk of a contested claim. McCormick concurred with Taylor’s assessment, but noted that there would also be the ongoing cost of the contract – roughly $12,500 per month through the remainder of the year.

Taylor asked how the city staff proposed to produce additional information get a clearer idea of RecycleBank’s actual effect. McCormick replied that the approach would be to mine other communities’ data to get an idea of how justified the 20% allocation is.

Another approach is to go back to Recycle Ann Arbor and try to separate multi-family collection from single-family collection. Melinda Uerling, executive director of Recycle Ann Arbor, was asked to the podium to explain that the collection routes currently used by Recycle Ann Arbor contain a mix of multi-family and single-family residences. It would be possible to look at reconfiguration of the routes. In response to a query from Taylor, Uerling said that reconfiguration would not be impossible, but it would be challenging. Recycle Ann Arbor was willing to look at route reconfiguration, she said.

Responding to further queries from Taylor, McCormick reported that the city’s solid waste coordinator, Tom McMurtrie, is “absolutely convinced” that there’s been a benefit from RecycleBank, and that the city needs some time to align the data with the analytical methods.

Carsten Hohnke (Ward 5) weighed in, saying that he had been a strong proponent of single-stream recycling, and of adding the coupon rewards. He called the operational efficiencies of the single-stream system and its positive reception among residents a win for the city. He said he’d spent a lot of time with the data and concluded that he was “about 50% wrong” on his view last year. He said he could not see the benefit of RecycleBank. He allowed it might be there, but he could not see it.

Hohnke suggested there was value in “pivoting quickly.” He said that when the city experiments, they have to anticipate that they don’t always get it right. He drew a comparison to the city council’s decision to reduce street lighting in some areas. [The council quickly backpedaled on that decision last year, when reception among residents was negative.] He allowed that there is always a benefit from additional data, but a year is enough time. He said he shared Higgins’ frustration.

Hohnke said it did not seem difficult to him to provide some clear data about whether RecycleBank was having a positive effect. He noted that city staff had suggested doing some surveys, but called that approach unhelpful in determining if there’s a specific effect from RecycleBank. Hohnke stressed that overall, the shift to single-stream has been a success.

Mayor John Hieftje repeated Hohnke’s point that it’s important to remember that single-stream recycling is an unqualified success in Ann Arbor. He said he did have a concern about whether there is a savings by making a decision to terminate the RecycleBank contract now, compared to waiting until the end of the fiscal year. He also said he thought the contract termination might not achieve the eight votes it needed to pass. Hieftje did not see any harm in waiting, though he came prepared to vote for termination. But he didn’t see how it hurts anything to delay. [At that point, based on deliberations, there were three clear votes against terminating – Smith, Derezinski and Teall. Taylor appeared dubious.]

The council then considered a motion to postpone until the second meeting in September – that was the result of much discussion about the date when the council would again take up the matter.

Hohnke noted that the longer the city stays with the contract, the longer it pays on the contract, but said he had no particular problem with postponing.

Briere allowed that some data might be gained through a postponement, but it’s hard to judge if it will be informative. Spending the additional $25,000 for two months on the contract is a concern, but not a devastating concern. The real issue, she said, is whether the council can benefit on any level from the postponement. In the last month, she said she’d spent a lot of time working on the issue and had seen emails flying to councilmembers from the city staff with spreadsheets and data.

Briere said that with respect to the late placement on the agenda, the actual numbers didn’t get to the council until that day. The city had done an experiment, and it was interesting experiment, but they sometimes have to say they made a mistake, she concluded.

Kunselman said he accepted some blame for the late addition to the agenda. He did not want RAA to separate routes just to try to get cleaner data. He said he was willing to placate members of council who are hesitant about terminating the contract and vote to postpone. But he felt that an incentive program is not enough to make people add another yogurt cup to the recycle bin.

Anglin said the purpose of recycling is to generate less waste, not more. He felt the RecycleBank program incentivized more trash – the person who gets the reward is the person who puts out more. Asked by Hieftje to speak to the issue of postponement, Anglin said he didn’t really care, but he supported postponing.

Outcome: The postponement to the council’s second meeting in September (Sept. 19) was approved with dissent from Hohnke, Hieftje, Briere and Rapundalo. Hieftje said he voted no because he hoped that it would fail and a postponement for a shorter timeframe would then be approved.

New City Administrator Pay

The council considered approval of a contract with Steve Powers, the newly hired city administrator, who will start on Sept. 15, 2011.

The council’s search committee had accepted a staff recommendation to target recruitment in the $145,000-$150,000 range. The committee was presented with comparable data in three different sets: Link to Google spreadsheet with data from Michigan cities, Big Ten cities, and midwestern cities. Some kind of vehicle allowance appears standard for the comparables used to determine compensation.

New City Administrator Pay: Background

The Ann Arbor city council chose unanimously to offer Steve Powers the job of city administrator at its July 18, 2011 meeting. The decision for Powers over another finalist, Ellie Oppenheim, came after two rounds of interviews on July 12-13, including a televised session on the morning of July 13. [Previous Chronicle coverage: "Search Concluding for Ann Arbor City Admin"]

The city’s chief financial officer, Tom Crawford, has been serving as interim city administrator since April 28 – he was appointed to that position at the city council’s April 19, 2011 meeting. He will continue to serve in that capacity until Powers begins work on Sept 15, making his tenure in that job four and a half months, or 140 days. Previous city administrator Roger Fraser announced his resignation at a Feb. 28 city council working session. Fraser took a job with the state of Michigan as a deputy treasurer.

New City Administrator Pay: Council Deliberations

The city administrator search committee was chaired by Marcia Higgins (Ward 4), and members of that committee also took part in the negotiations on the contract. At Higgins’ request at the Aug. 4 meeting, Christopher Taylor (Ward 3) ticked through the main features of the contract.

Highlights include a $145,000 base salary to be paid in weekly installments. His relocation expenses from Marquette will be reimbursed up to $30,000. His health insurance will be equivalent to other non-union employee plans. He’ll have 10 sick days accruing annually and 20 days of vacation accruing annually. He’ll begin with 10 vacation days in the bank. He’ll have a cellular allowance and data stipend. He will not participate in the city’s pension program. Instead, he will be in a 401(a) plan. The city of Ann Arbor will match Powers’ contribution 2-1 up to 15% of his annual salary. That is, if he contributes 7.5% percent of his salary to the 401(a), the city will contribute 15%. He will have a retiree health care reimbursement account accessible on retirement, and the city’s initial contribution to that will be $2,500.

Higgins and Taylor both praised Powers for a smooth negotiation. The work that Crawford has done as interim city administrator since Fraser’s departure was acknowledged.

Mayor John Hieftje called on the community to welcome Powers and offer assistance in the transition. Powers will have a lot to learn about what a wonderful community Ann Arbor is, Hieftje said.

Outcome: The council voted unanimously to approve the new city administrator’s contract.

Employee Benefits Changes

Before the council was final approval to two separate changes to employee benefits.

The first was a change in the pension system for members of the city’s police service specialist union. The council had approved the collectively bargained changes at its June 20, 2011 meeting. And the council had given initial approval to the ordinance change at its July 18 meeting.

Under the old ordinance, members of that union made a 5% post-tax contribution to their pension. That will change to a 6% pre-tax contribution made by members of the police service specialist union. The change will be effective starting Aug. 14, 2011.

The council also gave final approval to a revision to the city’s ordinance that covers how a city retiree’s health care is paid for. The council had given initial approval to the ordinance change at its July 18 meeting. The revision to the ordinance distinguishes between “subsidized retirees” and “non-subsidized retirees.” A non-subsidized retiree is someone who is hired or re-employed into a non-union position with the city on or after July 1, 2011. In their retirement, non-subsidized retirees will have access to health care they can pay for themselves, but it will not be subsidized by the city.

At its June 6, 2011 meeting, the city council had directed the city staff to prepare an ordinance change along these lines.

During the public hearing on the health care change, Thomas Partridge called himself an advocate for employees, private and public, who are facing cutbacks to their health care and pension benefits. He said the council should come clean on the fact that this is an effort to cut back on benefits at the same time employees are experiencing increased stress through increased workloads. He called on councilmembers as elected Democrats to do the decent thing.

Outcome: On separate votes without discussion, the council voted unanimously to approve both ordinance changes.

Village Green Extension

On the council’s agenda were two items related to an extension of the purchase option agreement with the developer Village Green regarding the city-owned First and Washington site, where the developer plans to build Ann Arbor City Apartments. It’s a 9-story, 99-foot-tall building with 156 dwelling units, which includes a 244-space parking deck on its first two stories.

The first item was the extension of the agreement. The second item was an expenditure for legal work, to be reimbursed by the developer.

Village Green Extension: Background

The delay in the land deal – which was originally set at $3.3 million and reduced by the council at its June 6 meeting to $3.2 million – means that the city’s contingency plan (for the failure of anticipated revenue from the sale to materialize in a timely way) will need to be exercised.

The reduction in price approved at the council’s June 6 meeting was based on a “bathtub design” for the foundation that is intended to prevent water from ever entering the parking structure, eliminating the need for pumping of water out into the city’s stormwater system.

Of the purchase price, $3 million was part of the city of Ann Arbor’s financing plan for its new municipal center, which is currently in the final stages of construction at Fifth and Huron. According to the staff memo accompanying the Aug. 4 purchase option extension, the city council will likely be asked at its Aug. 15 meeting to approve a short-term loan to cover the municipal building construction costs that would have otherwise been covered by the purchase of the land. At a city council work session in April 2010, the contingency plan of taking out a short-term loan – costing $150,000 – had caught the eye of Sandi Smith (Ward 1), who questioned the item in the budget planning for that year.

The additional extension considered by the council on Aug. 4 is through Nov. 3, 2011, and comes at a cost of a $50,000 non-refundable payment by Village Green to the city. The extension approved by the council also allows an additional 30-day extension – to Dec. 3, 2011 – to be made by the city administrator in exchange for an additional $50,000 non-refundable payment.

At the council’s July 18 meeting, interim city administrator Tom Crawford had given the city council a heads up that an additional extension to the purchase option agreement would likely be necessary.

The timeline revised by the council at its Aug. 4, 2011 meeting was put in place on Aug. 5, 2010 – when the city council approved an extension that called for Village Green to purchase the land by June 1, 2011. However, that deadline was subject to an extension of 90 days by the city administrator – an option which Crawford then exercised.

The parking deck portion of the project is being developed in cooperation with the Ann Arbor Downtown Development Authority, which has pledged to make payments on around $9 million worth of bonds, after the structure is completed and has been issued a permit for occupancy.

According to the staff memo accompanying the Aug. 4 resolution, Village Green still hopes to break ground on the project this construction season.

As a historical point related to the planned use of the sale proceeds for the new municipal center construction, the council defeated a resolution on March 17, 2008 to extend the Village Green purchase option agreement for First and Washington. That was a 5-5 vote (Higgins was absent). Voting to extend the agreement were: mayor John Hieftje, Joan Lowenstein (Ward 2), Leigh Greden (Ward 3), Margie Teall (Ward 4) and Chris Easthope (Ward 5). Voting against it were: Ron Suarez (Ward 1), Stephen Rapundalo (Ward 2), Stephen Kunselman (Ward 3), Mike Anglin (Ward 5) and Sabra Briere (Ward 1).

At the council’s following meeting, on April 7, 2008, Rapundalo brought back the measure for reconsideration, and the council voted unanimously to extend the agreement. The key difference was the addition of a “resolved clause,” which stated: “Resolved, that the proceeds from this sale shall be designated to the general fund, Fund 010.”

Village Green Extension: Council Deliberations

Mike Anglin (Ward 5) led off deliberations by saying that when the issue had come up before [at the council's June 6, 2011 meeting] he had asked for an environmental impact study, but had not received it. He’d requested that the Ann Arbor Downtown Development Authority make available any information it had about the water table that had been obtained through borings made for other projects. If water is pumped out, other water will flow in to replace it, Anglin said. He expressed concern about a possible connection to the 1,4 dioxane underground contamination. [The contamination came from a former Gelman Sciences manufacturing plant in Scio Township, subsequently purchased by Pall Corp. For recent Chronicle coverage of the cleanup efforts, see "Residents Frustrated by Dioxane Decision"]

Interim city administrator Tom Crawford told Anglin that an exchange of emails, which had included the city’s environmental coordinator, Matt Naud, had led Crawford to believe that Anglin’s questions had been answered. Crawford noted that the Gelman plume is far away from the First and Washington location. Crawford characterized possible pumping (dewatering) required for construction as likely to be short-term.

Mayor John Hieftje chimed in, saying that the reason for the delay was for the “bathtub design” for the foundation, so that no pumping would be required during heavy rains.

Anglin reiterated his contention that he’d made a request but had received no information. Crawford offered to follow up. Anglin replied to Crawford, saying that he thought there would be some kind of timeframe established. Anglin said that anything in the area is a concern to residents of Ward 5. The goal should be to protect people as opposed to the development. Crawford reiterated that if the information that had been provided was not sufficient, he was happy to follow up.

Stephen Kunselman (Ward 3) picked up on the note in the staff memo indicating that with the delay there’s a need to provide short-term financing for the municipal center, and that a recommendation would be brought to the council at their next meeting. Kunselman wanted to know what that recommendation would entail.

Crawford said he was working on it now, but in essence it would use the city’s pooled investment funds. For this amount of money, Crawford said, it’s more expensive to go out to a bank. The money earns about 1.9% right now. Kunselman noted that the Village Green project had been been delayed for many years. If it doesn’t come through, Kunselman wondered, what is the backup plan? Crawford said there was nothing to lead him to believe it won’t proceed, but the city’s general fund ultimately will have to deal with covering the cost, whether it’s financed or not.

At the Aug. 4 meeting, Kunselman characterized the city’s strategy, if the sale did not go through, as borrowing the money for the municipal center. Crawford allowed that borrowing was a possibility, or the city could potentially use part of its fund balance. Crawford said that all the elements of the municipal center financing plan had come to fruition, except for this one.

Kunselman then raised the issue of the Downtown Development Authority’s role in the Village Green project. Kunselman wanted to know essentially how the DDA was going to afford the financing it had pledged. The back and forth between Kunselman and Crawford drew out the fact that the DDA will be paying $1.4 million up front and financing roughly $8 million using bonds. Kunselman wanted to know what the impact would be on the per capita debt for the city.

Crawford stressed that the Village Green project had always been in the 10-year plan for the DDA. He also stressed that the debt was planned to be paid from revenue from the parking system, not with taxpayer dollars. Kunselman countered that this had also been the plan for the financing of the Fifth Avenue underground parking garage, but that had changed so that some of the bond payments are to be made with tax increment finance (TIF) dollars captured in the DDA district. Kunselman counted the current extension as the seventh one. He expressed concern about extending the project again.

In 2001, the city had $219 debt per capita, Kunselman said. In 2005, it had dropped to $152 per capita. But in 2010 it stood at $1,106.

By way of background, Kunselman was referring to general bonded debt. [.pdf showing debt per capita from the 2010 Comprehensive Annual Financial Report] At a townhall budget presentation earlier this year, city staff presented a comparison of Ann Arbor with other communities showing the total of all kinds of debt, and that presentation showed Ann Arbor with $2,199 per capita debt compared with $3,482 for Detroit on the high end, and $284 for Sterling Heights on the low end. [.pdf of debt per capita slide from city townhall budget presentation comparing Ann Arbor to other cities]

Kunselman then turned to the question of how many of the spaces in the parking deck would be accessible to the public, as opposed to being reserved for residents of Village Green’s City Apartments development. Crawford indicated that of the 244 spaces, 72 will be held for residents – the rest would be public. Kunselman briefly floated the idea of amending the purchase option agreement to give Village Green the responsibility for building and owning the parking structure. Crawford replied that the construction documents are due at the end of the month and that kind of revision couldn’t be done easily at this point.

Carsten Hohnke (Ward 5), responding to Kunselman’s concern about the debt load, asked for confirmation that in exchange for the debt, there would be be assets reflected on the balance sheet. Crawford said that the city doesn’t do “credit card debt.” Instead, he said, the city is more in the mortgage-type of debt business. He noted that the city is still at 2% of its debt limit. He also pointed to the cyclical nature of debt. He said that Ann Arbor is in the range of other communities. In his view, Crawford said, it’s not an inappropriate issuance of debt. He noted that the project would take the parcel onto taxable rolls. He called it an investment in infrastructure and the economy.

Hieftje, responding to Kunselman’s questioning of the need for the parking deck component, said that merchants wanted more parking. He noted that in 2008 the city had received a letter from First Martin, the owner of the Brown Block – a large surface parking lot between First and Ashley streets – reporting it had a client interested in developing that lot. That would be a significant loss of parking, Hieftje said.

Sandi Smith (Ward 1) picked up on Hieftje’s point about the Brown Block, saying that First Martin is required to give only a 30-day notice of termination of the lease agreement for parking use. Moving forward is essential on Village Green’s First and Washington project, she said. She emphasized that she continues to back the project – a short extension makes a whole lot of sense, she said. She could not think of another way to find $3 million. It makes sense to go with a strong partner with a good design.

As a final question, Anglin drew out the fact that Village Green still hopes to begin construction on the project yet this year, before the construction season ends.

Outcome: The council voted unanimously to approve the Village Green extension.

Village Green: Legal Work

Also related to Village Green’s project at First and Washington was the authorization of an increase in the contract to $60,000 (previously authorized up to $25,000) with James C. Adams of Ufer & Spaniola, P.C. for legal consulting in connection with the City Apartments/First and Washington parking structure project. The city is to be reimbursed by Village Green for the cost of this legal work.

Christopher Taylor (Ward 3) asked that his council colleagues excuse him from voting on the resolution, because his law firm, Butzel Long, has a business relationship with the parties.

Outcome: The council voted unanimously to authorize the increase to the contract with Adams. Taylor left the table and did not vote.

Expression of Support for Greenway

Before the council was a resolution added late to the Aug. 4 agenda, on Tuesday, Aug. 2, that expresses general support for the idea of constructing a greenway along the Allen Creek corridor.

Expression of Support for Greenway: Background

The single “resolved” clause reads:

“That the Ann Arbor City Council is fully supportive of the creation of the Allen Creek Greenway, and hereby directs City staff to continue to work with and to assist the Allen Creek Greenway Conservancy during the Greenway’s development and implementation phases.” [.pdf of Aug. 4 Greenway resolution]

The resolution comes as the possibility is becoming more real to construct the first section of the greenway. On May 16, 2011, the city council approved neighborhood stabilization funds for the demolition of three houses as site preparation for the Near North project. Adjacent to the Near North site are additional houses that could be demolished and left as open space, which could become part of a greenway. But based on remarks made at the meeting by greenway advocates, it appears that the first segment to be constructed is most likely to be the portion running through 415 W. Washington.

The 18 “whereas” clauses recite history dating back to 2005, when the city council appointed a task force to study the possibility of a greenway. The history recited by the resolution includes a measure approved by the council on July 6, 2009, which rezoned the First and William parcel as public land and set forth the council’s intention that the property (currently a surface parking lot) would eventually become part of a greenway. [Additional Chronicle coverage: "First & William to Become Greenway?"]

As a point of history, the July 6, 2009 meeting was the same meeting when the council authorized the start of a request for proposals (RFP) process for development of the city-owned Library Lot, which was eventually terminated  on April 4, 2011, without selection of a proposal.

Also included in the Aug. 4 resolution’s recitation of history is a Feb. 1, 2010 measure that started a process for re-developing the city-owned parcel at 415 W. Washington. The city had previously initiated an RFP process for 415 W. Washington. An RFP review committee met seven times from May to December 2008 to review and evaluate the three proposals the city had received. The RFP committee offered praise for all three proposals but did not designate any one of the three as preferred.

The committee punted the issue back to the city council, recommending that the council refine the RFP. The council’s Feb. 1, 2010 action did not follow that recommendation, and instead created a working group of city councilmembers, the Greenway Conservancy and the Arts Alliance to explore re-use of the property.

Like the Aug. 4, 2011 resolution, the Feb. 1, 2010 measure was sponsored by mayor John Hieftje, Carsten Hohnke (Ward 5) and Margie Teall (Ward 4) and was also added late to the council’s agenda. The July 6, 2009 measure was sponsored by Hieftje and Hohnke.

Expression of Support for Greenway: Public Commentary

Jonathan Bulkley introduced himself as president of the board of directors of the Allen Creek Greenway Conservancy – his remarks were made on behalf of the board of directors and advisory council. He offered his thanks to Hieftje, Hohnke and Teall for sponsoring the resolution.

It’s timely, Bulkley said, for several reasons: (1) In communicating with the University of Michigan last fall, the university’s representative was interested in a clear demonstration of support from the city of Ann Arbor; (2) the conservancy had been told at a good initial meeting with Ann Arbor Railroad that it needed a strong indication of support from the city; and (3) last December, when the conservancy had made a proposal to the Washtenaw County parks and recreation commission for support of the greenway portion of the plan for the city-owned parcel at 415 W. Washington, the conservancy had been told they needed a strong statement of support from the city.

Bulkley told the city council that he hoped that passage of the resolution would provide assurance to those various stakeholders that the city is fully committed to working in support of the greenway.

Ray Fullerton told the council that he serves on the conservancy board with Bulkley. The greenway concept has been around for 30 years, he said. The conservancy was not asking for money, he noted, just a statement of support. Fullerton said that he and Jennifer S. Hall, another conservancy board member, had started in January to put all the bits of the resolution together. [Hall is a former Downtown Development Authority board member as well as former member of the city's planning commission and greenbelt advisory commission.]

In March, the resolution had been presented to their board. Fullerton stated he hoped that in the council’s wisdom it would see fit to go forward. He asked the council to trust the conservancy. A big question is which side of the railroad to put the greenway on. Fullerton said he looked forward to the good times that families can have walking and biking along the greenway.

Expression of Support for Greenway: Council Deliberations

Carsten Hohnke (Ward 5) noted that the idea of a greenway has been around for a number of years. The resolution was consistent, he said, with previous city council action on the First and William parcel as well as the 415 W. Washington parcel. He called it a long-term vision on the most significant topological landmarks in the city. It would be a “long walk,” he said, to realize the vision, but the resolution was a step along that way. He thanked the conservancy for its work and hoped that the resolution would provide the formal expression of support that the conservancy needed to move its work forward.

Margie Teall (Ward 4) echoed Hohnke’s sentiments and said she was particularly excited about the portion of the greenway that will go through the 415 W. Washington parcel.

Tony Derezinski (Ward 2) described the greenway as a great project. He asked what of specific actions the city might have to take in support to “assist” the creation of the greenway. What type of actions would come back to the city council? Does the council have to wait and see?

Mayor John Hieftje described the greenway as a long-term project. As it moves forward there’ll be actions required, he said – for example, city staff time. Hieftje said the city staff would be preparing a grant application from the Michigan Dept. of Natural Resources and Environment (MDNRE), specifically from the MDNRE’s Michigan Natural Resources Trust Fund. [The city currently has two grant applications pending to that trust fund – for improvements to the Gallup livery and park, and for the proposed skatepark at Veteran’s Memorial Park.]

Hieftje said the progress report from the 415 W. Washington working group indicated that it’ll be possible to move the greenway portion faster than the rehabilitation of the buildings on the site. He noted that the Natural Resources Trust Fund recently received a big infusion of cash, so it’s a natural place to look.

Derezinski noted that the greenway had come up in connection with the Near North affordable housing project on North Main street. He said the greenway at that location was an opportunity to improve the entrance to the city. Hieftje pointed out that 415 W. Washington is an anchor point, along with the city’s property at First and William.

Marcia Higgins (Ward 4) wanted to know if the conservancy members are consulting with landowners. Are they talking to UM and the city or to individual property owners? Hieftje replied by saying that the goal of the conservancy is to work with property owners to make the greenway and the resolution is a reaffirmation of the city’s support. Higgins asked Joe O’Neal, a conservancy board member seated in the audience, to come to the podium. As O’Neal approached, he quipped that he’d hoped to go quietly unnoticed.

O’Neal told Higgins that the conservancy had at one time or another talked to every property along the proposed greenway. He said that currently it’s a matter of one particular land owner and one potential dollar donor – if the two can be put together, it would be a great link, he said. He added that the first green segment likely to be constructed would be through the 415 W. Washington parcel.

Outcome: The council voted unanimously to approve the resolution of support for the greenway.

Burton Commons Revisions

The council considered three separate resolutions in connection with Burton Commons, a 120-unit, 3-story, 5-building apartment complex with affordable housing, planned for a location on Burton Road near Packard and US-23. The original site plan approvals for the affordable housing project date back to 2007.

On Aug. 4, the council was asked to approve a revision to the design –  the third story on all five buildings will be eliminated, dropping the number of dwelling units from 120 to 80.

The second Burton Commons resolution the council was asked to approve involves details of a payment in lieu of taxes (PILOT) program that was previously approved. MHT Housing Inc., based in Bingham Farms, Mich., is a nonprofit affordable housing provider that will now be a development partner. In addition, the PILOT will reflect the reduction in the number of units from 120 to 80. And finally, the PILOT requires the project to secure federal or state-aided financing – the original proposal included federal HOME funds from the city of Ann Arbor, but the revised one does not. The PILOT is based on the State Housing Development Authority Act and Chapter 19, 1:651 of the city code, and provides an exemption from all property taxes for the term of the Michigan State Housing Development Authority (MSHDA) mortgage, up to 50 years. The “payment” is a $1 service charge.

The third resolution the council was asked to approve involved footing drain disconnects required by the project. The removal of the third story from each building, reducing the number of units from 120 to 80, also reduced the number of footing drain disconnects from 26 to 17. The cost of disconnecting 17 footing drains is $200,000-$300,000. The council was asked to allocate five footing disconnect credits, thereby offsetting $60,000-$90,000 of the project’s cost.

The council deliberations included questions for the architect on the project, Bradley Moore, who explained that essentially everything about the project remained the same, except for the fact that the buildings are all one story shorter.

Outcome: The council unanimously approved, on three separate votes, the changes to the Burton Commons project.

Ward Boundary Changes

On the agenda was a resolution giving initial approval to minor changes in the apportionment of the five city wards. According to the city charter, city wards must have the general shape of a pie-shaped wedge, with centers of the tips lying at the center of the city.

The council had postponed the issue at its July 5 meeting, but not before unanimously agreeing to alter the timing of the boundary changes, which had originally been recommended by the city attorney’s office to come between the primary elections for city council (which were held Aug. 2) and the general election (to be held Nov. 8).

While the minor changes to the boundaries themselves had not been met with strong objections, the timing had been controversial. So at their July 5 meeting, councilmembers agreed to change the effective date of the boundary changes to Dec. 1, 2011.

The staff-recommended tweaks on the Aug. 4 agenda showed minor differences from the changes recommended on July 5. All changes involve the way the tips of the pie-shaped wedges come together.

In the July 5 version, Ward 5 was bounded by Huron Street to the north and Madison Street to the south as it came towards the city center. In the Aug. 4 version, the Ward 5 northern boundary was dropped to Liberty Street, and to compensate the Ward 5 pie tip extended farther to the east.

In the July 5 version, the boundary between Wards 3 and 4 was aligned to Packard Street. But in the Aug. 4 version, the existing protrusion of Ward 4 across Packard, between Arch and Wells streets, was preserved. And to compensate, Ward 4 was pushed back from South University, with the result that Monroe Street, east of State Street, is a part of Ward 3. [.pdf of staff-recommended tweaks from Aug. 4] [.pdf of staff-recommended tweaks from July 5.]

Because the change to ward boundaries is a change to a city ordinance, the city council will need to give its final approval to the changes at a subsequent meeting, after a public hearing.

Outcome: The council voted unanimously, without discussion, to give initial approval to the ward boundary changes. Final approval will require a second vote and a public hearing at a future meeting.

Annexation-Related Rezoning

On the agenda was the rezoning of a property at 2437 Newport Road to R1A, the designation for single-family dwelling districts.

During a public hearing on the issue, Thomas Partridge said he was there to represent those whose needs have been unmet. There are some on the council who would rather relegate affordable housing to adjacent counties, he said, rather than take leadership that an enlightened university town should have. Ann Arbor should be a national leader in eliminating homelessness, he said. Every rezoning should require an amendment to require an equal number of acres be rezoned for affordable housing.

During the brief deliberations by the council, Sabra Briere (Ward 1) explained that the property is being rezoned, because it’s being annexed into the city – one house on a 1.1 acre lot. It only fits the largest category of residential, R1A, she said. The annexation adds to the city’s tax base and gives the property owners the city amenities they need.

Outcome: The council voted unanimously to approve the rezoning of the annexed property to R1A.

Communications and Comment

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

Comm/Comm: Video Surveillance

Sandi Smith said there’d been recent calls in the community for increased video surveillance to increase security. She stressed that it’s important that the city respect the privacy of residential areas. She said she has been working with the city’s human rights commission on a video privacy ordinance. And at the council’s Sept. 6 meeting, the council would have an ordinance to consider. She said she’d get the information out to other councilmembers in a week or so.

Smith had actually given her council colleagues a heads up already in December 2010 that the human rights commission would be working on a video privacy ordinance. [.txt file of draft ordinance from that timeframe]

Comm/Comm: Public Hearings for DDA?

During communications at the conclusion of the meeting, Stephen Kunselman (Ward 3) indicated that he would eventually be bringing forward a number of possible revisions to Chapter 7, the city’s ordinance governing the operation of the Ann Arbor Downtown Development Authority.

Among the possible revisions, Kunselman indicated he would be suggesting that the appointments and reappointments to the DDA board include a public hearing.

Among the specific concerns about the DDA Kunselman brought to the Aug. 4 meeting, he pointed out that the two years’ prior actuals were included for all other departments in the city’s adopted budget. But the DDA’s part of the budget does not include prior years’ actuals. He cited the state’s statute [Downtown Development Authority Act 197 of 1975]:

125.1678 Budget; cost of handling and auditing funds.

Sec. 28. (1) The director of the authority shall prepare and submit for the approval of the board a budget for the operation of the authority for the ensuing fiscal year. The budget shall be prepared in the manner and contain the information required of municipal departments. Before the budget may be adopted by the board, it shall be approved by the governing body of the municipality. Funds of the municipality shall not be included in the budget.

Kunselman indicated he’d just conferred with the city’s CFO, Tom Crawford, and that he hoped next year when the council adopts the budget, the DDA’s portion of the budget will show the prior year actuals.

At right, Stephen Kunselman (Ward 3) raised issues about the Ann Arbor Downtown Development Authority again at the Aug. 4 meeting of the Ann Arbor city council. On the left is Ward 3 councilmember Christopher Taylor.

Kunselman then went on to discuss the FY 2010 audit report for the DDA. The auditor had raised concerns about deficit fund balances, which were counter to Michigan’s uniform budgeting and accounting act.

By way of background, the deficits had been for a fund within the DDA’s budget (the parking fund), but taken in aggregate, the DDA’s budget was not in deficit. However, the required adjustment to the accounting, to show positive balances for all the funds, meant that the accounting showed clearly that TIF tax capture would be used to help pay for the Fifth Avenue underground parking garage. That meant that mayor John Hieftje’s claim during his 2010 primary election campaign – that parking revenues, not tax money, would be used pay for the Fifth Avenue underground parking garage – was not accurate. [For a discussion of DDA finances during the time when the DDA was using negative fund balance accounting see: "Impact of City-DDA Parking Deal"]

Kunselman went on to talk about another concern he had regarding the DDA’s TIF capture. He noted that the city council had passed a resolution [on May 30, 2011] that waived the excess TIF capture, which the DDA had calculated at the time that it owed to the city of Ann Arbor. Kunselman noted that he’d asked the assistant city attorney that evening to identify who was responsible for the tax calculations. And on that occasion, assistant city attorney Mary Fales had said it was the DDA’s responsibility. Kunselman said that based on a copy of a letter the DDA’s executive director had recently sent to other taxing authorities, the DDA’s view was different. In that letter city staff are portrayed as conveying to the DDA that the city staff had “neglected to implement” the city ordinance on TIF capture.

“It’s pointing the finger back at city staff,” Kunselman said. He stated: “I’m disturbed by this.” So now he wanted to get some clarification: Who is at fault? If the city is responsible for checking the math, they should be forthright, Kunselman said.

The various revisions to the city ordinance on the DDA would not be something he wanted to address quickly, Kunselman said, but he wanted to bring it to the council’s attention that he intended eventually to bring those revisions forward.

Comm/Comm: Immigrant Rights

Laura Sanders addressed the council representing Washtenaw Interfaith Coalition for Immigrant Rights (WICIR). She asked the members of WICIR’s teen group to stand.

Sabra Briere (Ward 1) greets Laura Sanders (right) of the Washtenaw Interfaith Coalition for Immigrant Rights, before the start of the Aug. 4 city council meeting.

They came in praise of the Ann Arbor police department and leadership of chief of police Barnett Jones. The group had advocated for repeal of Arizona’s anti-immigrant bill and thanked the Ann Arbor city council for passing its resolution opposing Arizona’s law about a year ago. That put Ann Arbor on the map as a city that upholds the rights of all residents, she said.

Since passage of that resolution, the group has noted no cases of profiling by AAPD or assistance to immigration officials, Sanders said. She cautioned that there are many anti-immigrant bills lurking in several states – the climate for immigrants is worsening. She called Ann Arbor’s resolution an example of how local governments can take a stand against unjust legislation. And Ann Arbor’s police department was a model of police work. She thanked Sabra Briere (Ward 1) and Sandi Smith (Ward 1) for their work on the topic.

Comm/Comm: CUB Agreements

Interim city administrator Tom Crawford alerted the city council that in July, state legislation had been passed preventing CUB (Construction Unity Board) agreements. In response to a request from Sabra Briere (Ward 1), Crawford sketched out that a CUB agreement essentially requires the awardee of a construction contract to negotiate with organized labor. Crawford said the city staff is working on an revision to address the city’s inconsistency with the new state law. It would likely be in front of the council at its next meeting, he said.

Comm/Comm: King Elementary Crossing

Kathy Griswold appeared before the council with a roughly 3-foot-tall doll version of Dora the Explorer to illustrate an elementary school child trying to cross the street. She noted that she’s spoken about the need to move the crosswalk at King Elementary School, located at 3800 Waldenwood Lane.

[The crosswalk issue was raised by Griswold over a period of more than a year, starting in the fall of 2009 – she unsuccessfully lobbied the council and Stephen Rapundalo as Ward 2 representative to move the mid-block crosswalk in front of King Elementary School to the end of the block, where cars must already stop for the 4-way stop intersection.]

Griswold said she wanted to look at the issue from a financial standpoint. The recurring cost of a crosswalk guard, split 50-50 between Ann Arbor Public Schools and the city, Griswold said, would fund the sidewalk path extension. The sidewalk path would need to extend from the point where children would cross to the school property. Griswold said that two curb cuts and ramps have to be upgraded anyway to meet ADA requirements. It doesn’t make sense to spend money on a crossing guard, she said, when that funding could be used to pay for police, who fight crime.

She concluded that it’s the right thing to do it for the safety of children and for city finances.

Comm/Comm: Hieftje on Crime

Mayor John Hieftje took umbrage at the implication made by Kathy Griswold during public commentary that Ann Arbor was experiencing an increase in crime, and gave a lengthy defense of Ann Arbor’s record on crime. The recent attacks of women have nothing to do with crime, he said. Crime comparisons are quite remarkable, he said. Compared with other Big Ten cities, he contended, Ann Arbor has less crime than all of them except for State College, Penn. and West Lafayette, Ind.

Crime in Ann Arbor was down 18% since 2002 and 2003, Hieftje contended. To say that there’s a serious crime problem is a stretch, he said. There is a perpetrator out there, maybe two of them, who are attacking women, he said, and the FBI has been brought in. Women are being cautioned not to walk by themselves late at night and early in the morning.

Comm/Comm: Recall of Snyder

Thomas Partridge introduced himself as an advocate for the disadvantaged. He addressed the council on the matter of the petition drive to oust Gov. Rick Snyder, to prevent him from doing any more damage to local governments by diminishing expected support from the state in terms of revenue sharing. There’s a case to be made for recalling Snyder, he said, along with the majority of the members of the senate. He asked that the councilmembers help in the petition drive by signing and circulating petitions. Partridge also called on the council to enact protections to expand access to Internet technology at no cost to residents.

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

Next council meeting: Monday, Aug. 15, 2011 at 7 p.m. in the council chambers at 301 E. Huron. [confirm date]