So the council passed two amendments eliminating those aspects of the plan during deliberations at it Oct. 7 meeting.

The updated plan presented to the council included a number of initiatives, including goals for increased recycling/diversion rates – generally and for apartment buildings in particular. Also included in the draft plan is a proposal to relocate and upgrade the drop-off station at Platt and Ellsworth. The implementation of a fee for single-use bags at retail outlets is also part of the plan.

A pilot program in the plan would add all plate scrapings to the materials that can be placed in the brown carts used to collect compostable matter. And if that pilot program were successful, the original draft of the plan called for the possibility of reducing the frequency of curbside pickup – from the current weekly regime to a less frequent schedule. But that possibility was amended out of the plan. [Waste Less: City of Ann Arbor Solid Waste Resource Plan.] [Appendices to Waste Less]

Even the inclusion of the idea of reducing trash pickup to just once every two weeks was a highlight of the plan to which some councilmembers objected. [Previous Chronicle coverage: Waste as Resource: Ann Arbor's Five Year Plan.] Voting against that amendment to the plan were Margie Teall (Ward 4) and mayor John Hieftje.

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]

Later in the same meeting, the council considered but ultimately postponed a decision – until its second meeting in September – to fund the increased RAA contract by terminating its contract with RecycleBank for administering a coupon-based incentive program. That would have ended a 10-year deal approved last year by the council. The termination of the contract would include a budget appropriation to fund the RAA contract change, and would require 8 votes. Based on deliberations on Aug. 4, it’s uncertain if those 8 votes will be achieved.

The Recycle Ann Arbor contract change reflected the council’s choice to revisit a decision it had made at its July 5 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.

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 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 and RecycleBank, a company that administers a coupon-based incentive program to encourage residents to recycle. 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 at the Aug. 4 meeting, the council considered 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, which it will take up at its second meeting in September, 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.

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]

The speaker’s podium at Monday’s meeting was graced with a basket full of buttons stating: I WILL VOTE. The city’s primary election is Tuesday, Aug. 2. The buttons are part of a city clerk’s office effort to increase participation in the elections. (Photos by the writer.)

During the time reserved for council communications at the start of the meeting, councilmembers decided to reconsider a 5-4 vote they’d taken on July 5. That vote, which failed to achieve a six-vote majority, had the outcome of rejecting an increase to Recycle Ann Arbor‘s contract to provide curbside recycling service in the city. After agreeing to reconsider the vote, the issue was again fresh before the council.

Councilmembers then unanimously agreed to postpone action on the contract until the next meeting, which falls on Aug. 4 – after the Aug. 2 city council primary elections. Based on remarks from Carsten Hohnke (Ward 5), it appears likely that the council may discontinue a contract with RecycleBank (an incentive program provider) in order to free up funds to supplement Recycle Ann Arbor’s contract.

Next up was a resolution that had been moved forward on the council’s agenda to a spot before all the consent agenda items. After brief deliberations, the council agreed to offer its open city administrator position to Steve Powers. 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"]

Although Monday’s meeting was brief, the council ticked through a raft of significant votes after those two main business items. The expected start of the East Stadium bridges reconstruction project was reflected in the approval of stormwater control projects near the construction site, and in the approval of a deal to use land as a construction staging area. For a property just down State Street from the bridge, but unrelated to the project, the council approved a sanitary sewer hookup at the location where Biercamp Artisan Sausage and Jerky has opened for business.

Related to the city’s emphasis on the natural environment, the council approved a contract that will allow the planting of 1,200 trees in city rights of way, and added 110 acres of land to the city’s greenbelt program.

The city renewed its membership in the Urban County, a consortium of local governmental entities that allows the city to receive federal funds through a variety of federal U.S. Housing and Urban Development (HUD) programs. The council also appointed Tony Derezinski (Ward 2) as a hearing officer for liquor license revocation recommendations. Initial approval was also given to two ordinance changes related to employee benefits – one of them for union employee retirement benefits, the other for non-union retiree health benefits.

Only three people addressed the council during public commentary at the start of the meeting. Two of them were the owners of businesses – Earthen Jar and Jerusalem Garden – adjacent to the construction site of the underground parking structure along Fifth Avenue. They reiterated the same theme they’d conveyed to the board of the Ann Arbor Downtown Development Authority (DDA) at that body’s July 6 meeting – their business is suffering due to the construction.

And related to the DDA, Stephen Kunselman (Ward 3) continued a pattern of using his council communications slot to update his colleagues on his campaign to press the DDA to provide more information about its budget. It’s a highlight of his re-election campaign in Ward 3, where he’s contesting a three-way primary on Aug. 2.

New City Administrator

In front of the council for its consideration was a resolution to offer the job of city administrator to an unnamed candidate. The council moved the item towards the start of its agenda on Monday evening and deliberated briefly on the choice. Consideration of the resolution came after two rounds of interviews on July 12-13, with the two finalists – Steve Powers and Ellie Oppenheim – including a televised session on the morning of Wednesday, July 13. During the July 13 discussion among councilmembers who attended those interviews, a preference had been indicated for Powers. [Previous Chronicle coverage: "Search Concluding for Ann Arbor City Admin"]

Powers currently serves as county administrator of Marquette County, Mich. – a position he’s held since 1996. Oppenheim most recently served as CEO of the Reno-Sparks Convention and Visitors Authority.

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. 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: Council Deliberations

The first part of the council’s deliberations on Monday involved amending the resolution to add a candidate name.

Marcia Higgins (Ward 4), Stephen Rapundalo (Ward 2) and Sabra Briere (Ward 1) before the July 18 council meeting started. Higgins is acting alone – it does not take three councilmembers to plug in a computer.

Marcia Higgins (Ward 4), who chaired the search committee, said a lot of the council’s sentiments on the two candidates had been expressed during the work session held on Wednesday, July 13. She said she felt Powers was a stronger candidate for what the city needs. She cited as a strength the fact that Powers is already familiar with Michigan. She pointed to the very dynamic things he’d accomplished with Marquette County. Higgins described his approach as thoughtful, and reiterated that she felt he was a stronger candidate.

Tony Derezinski (Ward 2) echoed Higgins’ sentiments. He pointed out that the process had narrowed down 60 applicants to three. The council was very thorough, he said, and had a lot of information. Based on the discussion at the work session, one candidate was favored, he noted. Because Powers had headed a municipal entity for 15 years, he knew how you handle conflicting things, Derezinski said. Like Higgins, he pointed to Powers’ background in Michigan as important. He noted that Powers was trained as a city administrator, but had found his future with a county. Now Powers was coming back to what he studied to be. Either candidate could have done the job, said Derezinski, but Powers was the better of the two.

Sandi Smith before the July 18 council meeting started. The poster in the background exhorting citizens to participate in the Aug. 2 elections has also appeared in the windows of downtown businesses. It’s part of an effort by the city clerk’s office to increase turnout in the off-year election.

Mayor John Hieftje said he’d heard several residents who appreciated the discussion that the council had had. It was a very good discussion about the candidates, he continued. The council had spent a lot of time with the decision, but it was clear to all of the councilmembers that Powers was a better fit. Powers’ desirability was also confirmed by another government, said Hieftje, who noted that Ann Arbor’s hire was close to being on schedule.

[Powers made a list of four finalists for the open county administrator job in Polk County, Iowa, where the city of Des Moines is located. The day after the Ann Arbor city council made its offer to Powers, Polk County added another finalist to their list of interviewees.]

Carsten Hohnke (Ward 5) allowed that he didn’t attend the round robin interviews on July 12 or the presentation and question/answer session on July 13. But he said he’d had lengthy conversation with both candidates at the July 12 public reception. He was able to review the video of the July 13 session and review the material that the city’s HR department had provided.

Hohnke said the city has a great opportunity to bring someone like Powers into the community. Both candidates had the skills and knowledge to fill the position more than adequately, he said. But for Hohnke, it came down to which candidate that had strengths that matched up with needs of Ann Arbor at this time. Powers’ familiarity with Michigan was appealing to him, as well as his ability to drill down to specific answers to questions. What stood out for Hohnke was Powers’ success at collaboration with his peers, his ability to take input in a sincere way, his ability to be fair and consistent, and his interest in how the city will measure the success of the city administration. Powers was able to dive down and be specific about tracking performance, Hohnke said.

Hohnke continued his comments by saying it’s a great opportunity and he thanked both candidates – it’s a lot of work to apply for a job, he said. He also thanked Tom Crawford, the city’s chief financial officer who has served as interim city administrator, noting Crawford still has some work to do. Hohnke also extended his thanks to the city council search committee.

Outcome on adding Powers’ name to the resolution: The council voted unanimously to amend the resolution by filling in the blank with Steve Powers’ name.

The deliberations on the main motion were brief. Sabra Briere (Ward 1) noted that it was the most important decision the council would make – unlike councilmembers, who might only serve a two-year term, city administrators stick around for more than two years, she said.

Outcome on city administrator selection: The council voted unanimously to extend an offer of the city administrator position to Steve Powers.

The resolution approved by the city council on Monday specifies that the appointment of Powers is contingent on signing a contract. The council’s city administrator search committee had recommended targeting recruitment of a city administrator with a base salary in the $145,000-$150,000 range. Negotiations on the council’s side will be handled by members of the search committee: Marcia Higgins (Ward 4), Sabra Briere (Ward 1), and Christopher Taylor (Ward 3).

Recycle Ann Arbor Deal

At the council’s July 5 meeting, a vote to change the contract under which Recycle Ann Arbor provides curbside recycling service failed to pass. On July 18, the council reconsidered that vote.

Recycle Ann Arbor Deal: Background

The proposal first considered at the council’s July 5 meet was a change to the city’s contract with Recycle Ann Arbor (RAA) for curbside collection of the city’s single-stream recycling carts – from $3.25 to $3.55 per month per cart, for a total of $107,042 annually. The vote was made without any deliberations and resulted in 5 votes for it and 4 against. Voting against it were Stephen Kunselman (Ward 3), Carsten Hohnke (Ward 5), Mike Anglin (Ward 5) and Sabra Briere (Ward 1). The 5-4 vote meant that the proposal did not achieve a required six-vote majority, and thus failed.

The city council had voted on March 15, 2010 to adopt the single-stream recycling program, which began exactly 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 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 requested (but rejected by the council) – for all five years of the five-year contract – would have worked 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 and RecycleBank, a company that administers a coupon-based incentive program to encourage residents to recycle. When the council approved the single-stream recycling contract with RAA last year, it also struck a 10-year deal with RecycleBank, at up to $200,000 per year, to administer a coupon-based incentive program to help boost recycling rates in conjunction with the single-stream rollout.

At the time, Stephen Kunselman (Ward 3) questioned the length of the RecycleBank contract, and established in the course of deliberations that the city’s opt-out clause would be less costly than the cost of the contract. He was concerned that the city had options in the event that RecycleBank’s incentives did not boost recycling tonnage to the levels that were forecast. [Chronicle coverage: "Council Banks on Single-Stream Recycling"]

Graph 1. Tons of curbside recycling collected by week, from July 2009 through April 2011. The first vertical bar is the first week of July 2010, when single-stream recycling was implemented. The second vertical bar marks the first week in September, when RecycleBank’s contract started. (Data from the city of Ann Arbor. Graphing and any errors in presentation are The Chronicle’s responsibility.) The dip in March 2011 is not yet accounted for. (Image links to higher resolution .pdf file)

According to city of Ann Arbor staff, participation in the RecycleBank program stands at 10,000 of 23,600 Ann Arbor households. In the first five months of 2011, Ann Arbor residents ordered 7,153 rewards. The rewards range in value, generally around $5-20.

Tom McMurtrie, solid waste coordinator for the city of Ann Arbor, provided to The Chronicle truck-level data at the Materials Recovery Facility (MRF) for the period July 2009 to April 2011. Graph 1 is the result of filtering that data just for curbside recycling and grouping it by calendar week.

The plot suggests that the increase in curbside recycling tonnage collected – roughly 20% more – was realized with the rollout of the single-stream recycling program, and was not enhanced much by the RecycleBank coupon incentive program. That is counter to the expectation expressed at the council’s March 15, 2010 meeting, when the council approved the RecycleBank contract – at that time they were told that the RecycleBank program is what “gives it that shot in the arm.”

Recycle Ann Arbor Deal: Council Deliberations

Margie Teall (Ward 4) led off the first slot on the agenda for council communications by telling her council colleagues that she was sorry to have missed the last meeting, because there was an issue on solid waste that was voted on. As a member of the environmental commission involved in solid waste task forces over the last few years, she was disappointed not to be able to participate in that vote.

She said she would support bringing that vote back for reconsideration. [Because she did not attend the meeting, Teall could not make the motion for reconsideration herself. That motion must come from someone who voted, and specifically someone who voted with the prevailing side. In the case of that 5-4 vote, the four in the minority were actually the prevailing side, because the motion was defeated for lack of a six-vote majority. Carsten Hohnke (Ward 5) voted against the measure, so he was eligible to make the motion for reconsideration.]

Hohnke indicated he would be happy to move to reconsider that vote – it wouldn’t hurt to discuss the issue further. He said he was disappointed that the council didn’t have some of the data from the city staff he wanted to see, because it was not available. He suggested that the council could reconsider and postpone it. He said that if RecycleBank is not benefitting the city, then transferring the money from the RecycleBank contract to Recycle Ann Arbor might be a healthy solution.

Outcome: The motion to reconsider the Recycle Ann Arbor vote was unanimously approved.

With the resolution again before the council, Hohnke said he’d prefer to postpone action, given that there’s an analysis taking place that’s still not available. Tom McMurtrie, solid waste coordinator for the city, was not available at the meeting.

Mayor John Hieftje said he appreciated the reconsideration, because it would allow for some more investigation of the RecycleBank program. Hieftje said there may be some misperception that Recycle Ann Arbor had done something wrong – that was not the case, he said. Instead, Recycle Ann Arbor’s contract was based on incorrect estimates about the number of carts that would be deployed in the field.

Christopher Taylor (Ward 3) got clarification that the intended postponement was until the council’s next meeting on Aug. 4. Marcia Higgins (Ward 4) was interested in making sure that the council would see the requested data sooner than the council meeting.

Outcome: The council unanimously approved postponement of the Recycle Ann Arbor contract until Aug. 4.

Bridge Project Stormwater Controls

In front of the council for its consideration was authorization of petitions to the Washtenaw County water resources commissioner for the design and construction of stormwater controls as a part of the East Stadium bridges replacement project. The bridge project is expected to start construction in the fall of 2011.

The council authorized two petitions – one for the Allen Creek drainage district ($1,094,059 – with the city’s portion being $1,051,391) and the other for the Mallets Creek drainage district ($1,284,330 – with the city’s portion being $1,188,005).

The stormwater controls will provide for detention to slow the rate at which stormwater enters the two creeks. That will help reduce bank erosion and excessive runoff and washout. In addition, the stormwater controls will help remove E. coli, phosphorus, and other suspended solids that diminish the stream quality.

The city has been approved for a low-interest state revolving fund loan at an interest rate of 2.5%. The projects will be financed over the course of no more than 20 years. [Google Map showing watersheds and bridge construction location]

Outcome: The council voted unanimously, without discussion, to approve both stormwater controls projects.

Use of Parcel for Bridge Construction Staging

The council was asked to approve a $70,000 payment to the owner of the parcel at 1501 S. State St., for use as a construction staging area for the East Stadium bridges reconstruction project. The parcel is located immediately adjacent to the bridge over State Street, east of State Street and south of Stadium Boulevard. The money for the use agreement will come from the city’s street repair millage.

Construction on the bridge project is expected to start in the fall of 2011.

Outcome: The council unanimously approved the deal to use the parcel for a construction staging area – it was a part of the consent agenda.

Sanitary Sewer Connection

Councilmembers were asked to consider approval of a sanitary sewer connection to a property – at 1643 S. State St. – that lies in a township island (Ann Arbor Township) within the city. The property, which currently has a septic field, is the location of Biercamp Artisan Sausage and Jerky.

The property is already serviced by city water, which the city of Ann Arbor approved in 1937. The staff memo to the resolution, which appeared on the council’s consent agenda, indicates that all water improvement charges, sanitary sewer charges and sidewalk improvement charges have been paid in full. The owners of the property applied for annexation and rezoning of the property in May 2011.

In the brief deliberations, Sabra Briere (Ward 1) commended the staff for dealing with the parcel, which is currently a township island, in a creative way. Mayor John Hieftje said that the business couldn’t get county health department approval without a sanitary sewer connection.

Outcome: The council unanimously approved the sanitary sewer connection.

Tree Planting

In front of the council for its consideration was approval of a $301,475 contract with Marine City Nursery Co. to plant 1,200 trees in the right-of-ways of streets in the Malletts Creek, Allen Creek, Traver Creek and Swift Run drainage districts. [.pdf of map showing areas to be targeted for tree planting]

The money for the tree planting will come from the stormwater fund’s capital budget. The Washtenaw County water resources commissioner has obtained a low-interest loan on behalf of the city through the state’s revolving fund loan and will reimburse the stormwater fund for part of the project. The rationale for use of stormwater funds to plant trees is based on the idea that trees have a positive impact on the volume and quality of stormwater flow.

The city received only two bids for the tree-planting contract, and only the bid from Marine City Nursery Co. was determined to be a responsible bid.

Sabra Briere (Ward 1) prepares to take her seat at the council table. In the background is Sandi Smith (Ward 1).

During the brief deliberations, Sabra Briere (Ward 1) highlighted the fact that 1,200 trees would be planted in four different creeksheds. The effort would deal with the loss of many trees from the emerald ash borer. Mayor John Hieftje added that the city knew it was going to take a while to replace all those trees.

Mike Anglin (Ward 5) said he was happy the resolution is coming forward. He’s been hearing that sometimes when trees are planted in the right of way in front of someone’s property, people who live nearby don’t water them. He estimated it would cost only $300 for the water it would take to maintain a new tree. He asked that if residents are not planning to water the new trees, to let the city know.

Marcia Higgins (Ward 4) questioned whether the city asked residents to water trees planted in the right of ways. Hieftje indicated that he believed the city did ask residents to do that.

Outcome: The council voted unanimously to approve the tree planting contract.

Greenbelt Addition

On the July 18 agenda was a resolution to authorize of the purchase of development rights for a 110-acre property along Pleasant Lake Road in Lodi Township – the Lindemann-Weidmayer property. The city’s cost for the PDR will be $387,372. The total budget for the project is $699,992, including contributions from other funding sources.

On Feb. 7, 2011 the council had approved a grant application to the federal Farm and Ranch Land Protection Program for the purchase of development rights on the property. And on June 6, 2011 the council approved the acceptance of $312,620 from the U.S. Dept. of Agriculture for the purchase. The deal had been recommended by the city’s greenbelt advisory commission, after discussion in a closed session at its Feb. 9, 2011 meeting.

The brief council deliberations included a description by Carsten Hohnke (Ward 5) of the parcel’s location. Hohnke is the city council’s representative to the greenbelt advisory commission.

Outcome: The council voted unanimously to approve the purchase of development rights for the Lindemann-Weidmayer property.

Urban County Renewal

In front of the council for its consideration was a resolution to join the Washtenaw Urban County for a second three-year period, from July 2012 through June 2015.

“Urban County” is a designation of the U.S. Dept. of Housing and Urban Development (HUD), identifying a county with more than 200,000 people. With that designation, individual governments within the Urban County can become members, making them entitled to an allotment of funding through a variety of HUD programs, including the Community Development Block Grant (CDBG) and HOME Investment Partnerships. Those two programs provide funding for projects to benefit low- and moderate-income residents, focused on housing, human services and other community development efforts.

Washtenaw County and the townships of Ann Arbor, Ypsilanti, Pittsfield, Superior, Northfield, Salem, and Bridgewater got the Urban County designation in 2002. Later, the city of Ypsilanti and Scio Township joined, and in 2009 the city of Ann Arbor – which previously received HUD funding directly – joined as well, roughly doubling the amount of money available in the Urban County’s funding pool. Earlier this summer, the Saline city council also voted to join the Urban County.

Renewal applications need to be submitted to the Detroit HUD Field Office by July 15, 2011 from all participating jurisdictions.

Margie Teall (Ward 4), who serves as the council’s representative to the Urban County, expressed her support for the city’s continued membership in that body. [The Urban County's executive committee meets on the fourth Tuesday of each month. However, its July 26 meeting has been cancelled.]

Outcome: The council voted unanimously to approve renewal of its membership in the Urban County.

Corrections Grant Application

Councilmembers were asked to approve a $421,801 grant application to the Michigan Dept. of Corrections for the Ann Arbor/Washtenaw community corrections advisory board. The state grant will be supplemented by $295,890 in fees, and a $292,369 general fund match from Washtenaw County, bringing the total program budget to $1,010,060.

The advisory board was established in August 1989 through resolutions approved by the Washtenaw County board of commissioners and the Ann Arbor city council. The purpose of the advisory board is to formulate a comprehensive plan for the development, implementation, and operation of the community correctional services in Washtenaw County and Ann Arbor, and to develop a plan for the administration, monitoring, and control of the community correctional services under the comprehensive plan.

Mike Anglin (Ward 5) is the city council’s representative to that board, which includes the county sheriff, Ann Arbor chief of police, a circuit court judge, a probate court judge, a district court judge, a county commissioner, a councilmember, a prosecuting attorney, a criminal defense attorney, and a circuit court probation agent or district court probation officer. The board also includes representatives from the fields of mental health, public health, substance abuse, employment and training or community alternative programs, the business community, communications media, and the general public.

The brief council deliberations consisted of Anglin’s summary of the advisory board’s program. He described the program’s goal as trying to keep people out of prisons. That’s consistent with the ethic in the community that attempts to make people as productive as they can be, he said.

Outcome: The council voted unanimously to approve the grant application.

Liquor License Hearing Officer

A resolution on the July 18 agenda called for the appointment of Tony Derezinski (Ward 2) as the hearing officer for all future liquor license revocation hearings – for any reason – conducted by the city on recommendation of the council’s liquor license review committee.

At the council’s March 7, 2011 meeting, councilmembers had already approved Derezinski’s appointment as hearing officer for all future appeals of non-renewal recommendations that arise from the liquor license review committee’s annual review.

The March appointment was somewhat controversial. The appointment of Derezinski as a single hearing officer, in place of the three-member liquor license review committee as a hearing board, came as a floor amendment (during the meeting) to the council’s resolution. Voting against the change to a single hearing officer that night were long-time chair of the liquor license control committee Stephen Rapundalo (Ward 2), as well as Sabra Briere (Ward 1), Marcia Higgins (Ward 4) and Stephen Kunselman (Ward 3).

Liquor License Hearing Officer: Council Deliberations

Rapundalo noted that this past year was the first year that the establishments holding liquor licenses went through an annual review. A few establishments had required a hearing, and those were disposed of appropriately, Rapundalo said. He continued by explaining that the committee had discovered it didn’t have a process for handling situations between the times of the annual review. The liquor license review committee has adopted some regulations and parameters on which hearings will be conducted for situations not associated with the annual review. Those hearings will be handled to coincide with the appointment of Derezinski as hearing officer.

Rapundalo continued by saying that in the annual review process, $42,000 to $43,000 of back taxes had been recovered that had been in arrears.

Higgins then raised a “housekeeping” question – should Derezinski’s appointment be through Dec. 5 and then added to the council’s committee list, so that the council is reminded each year that the appointment needs to be made? Derezinski responded by saying he’d defer to the city attorney. City attorney Stephen Postema indicated there was not a problem handling the hearing officer appointment that way. Rapundalo felt it was an excellent idea. The resolution was amended to reflect Higgins’ housekeeping suggestion.

Mike Anglin (Ward 5), who serves on the liquor license review committee along with Rapundalo and Derezinski, alerted the public that the committee meetings are public. During the time he’s been on the committee, Anglin said, Rapundalo has done a good job of guiding the committee’s work. Anglin thanked Derezinski for stepping forward to do the work of the hearing officer.

Outcome: The council voted unanimously to appoint Tony Derezinski as the hearing officer for all appeals hearings on liquor license revocation.

Local Development Finance Authority

Added to the agenda the evening of the July 18 meeting was a resolution to reappoint Stephen Rapundalo (Ward 2) to a four-year term to represent the city council on the Local Development Finance Authority board.

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"]

The appointment to the LDFA board exceeds the length of a city council term, which is two years, because the terms for LDFA appointments are expressed in the LDFA bylaws as only for four years. Based on the brief council discussion between Rapundalo and Marcia Higgins (Ward 4), it appears that an LDFA board bylaws change to address that issue is on the horizon.

The council’s interest is in establishing the LDFA council appointment as a regular, routine part of the council’s committee appointment schedule, which it conducts with each new constitution of the council after November elections.

Outcome: The council voted unanimously to appoint Stephen Rapundalo to the LDFA board.

Police Service Specialist Pension

The council was asked to give initial approval to a change in the pension system for members of its police service specialist union. The council had approved the collectively bargained changes at its June 20, 2011 meeting.

Currently union members make 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.

Because the change to the police service specialist retirement package requires altering a city ordinance, it will require a public hearing and a second, final approval by the council at a subsequent meeting.

Outcome: The council voted unanimously, without discussion, to give initial approval to a change in the police service specialist union pension system.

Retiree Health Change

Councilmembers considered initial approval of a revision to the city’s ordinance that covers how a city retiree’s health care is paid for. 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 staff to prepare an ordinance change along these lines. Because it is a change to a city ordinance, the initial approval given to the change in the city’s retiree health system will require a public hearing and a second, final approval at another meeting.

During the brief deliberations on the ordinance, Marcia Higgins (Ward 4) said she appreciated the city staff moving the ordinance forward based on the council’s resolution on June 6.

Outcome: The council voted unanimously to give the retiree health care change its initial approval.

Picometrix Tax Abatement Public Hearing

On the council’s July 18 agenda was a public hearing on a tax abatement for Picometrix LLC, located at 2925 Boardwalk in Ann Arbor. Picometrix is a supplier of high-speed optical receivers.

The 5-year abatement would apply to $2,434,882 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. If the abatement were approved, it would reduce the company’s annual tax bill for the new equipment by about $16,500 annually. The new personal property would generate approximately $20,700 in property taxes for each year during the abatement period, according to a city staff memo accompanying the resolution.

The industrial development district in which the Picometrix tax abatement is sought was established in 2006.

Thomas Partridge was the only person to speak during the public hearing. He stressed that tax certificates should be considered as IOUs, not unlimited grants.

No council action on the Picometrix tax abatement was scheduled for the July 18 meeting.

Communications and Comment

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

Comm/Comm: Underground Parking Structure Impact

Owners of two local businesses addressed the council about their situation – being located next to the construction site of an underground parking structure on Fifth Avenue, between Liberty and William streets. The two had also addressed the Ann Arbor Downtown Development Authority board at its June 6, 2011 meeting.

[On the opposite side of the block, on Division Street, is another local business, the Mail Shoppe, which also has seen its business drop during the construction period. Mail Shoppe owner Carolyn Hough told The Chronicle her business has been down by 25%, and walk-in business specifically was down 50%.]

At the July 18 council meeting, Pushpinder Sethi introduced himself as the owner of Earthen Jar – he was there to ask for some kind of compensation due to the underground parking garage that’s being constructed next to his business. He described the turmoil surrounding the construction project and how business is going down. It was not expected that the construction project would last this long, he said. His sales are down 50% – he’s losing $6,000 every month. He said it’s hard to survive. He requested some compensation from the city in the form of a tax abatement.

Ali Ramlawi reminded the council that he had attended a city council meeting a couple of months ago, talking about the Downtown Development Authority. The Jerusalem Garden owner said he was not going to go out of business, but that’s because of the University of Michigan [which uses the restaurant's catering business] and the restaurant’s dedicated followers. He said he’d asked the DDA for help one year ago, but that request had been rejected by DDA executive director Susan Pollay, saying it was an ordinary civic construction project. But Ramlawi contended the project is not ordinary – Fifth Avenue has been closed for a year.

Ramlawi told the council he wanted to talk about the role of the DDA and the future of the city. Recently, the city council gave more power to the DDA with respect to parking fees and enforcement and more influence on future development of city-owned parking lots. He characterized it as a transfer of power to non-elected officials. That kind of power transfer needs to go before voters, he contended. There need to be some ballot initiatives to see if people are comfortable with that power transfer. People don’t know what the DDA is, he said. He called for more transparency. The general public doesn’t know how DDA board members are appointed or what they do.

Following their commentary, Mike Anglin (Ward 5) said it’s hard to find the businesses and wondered if some signage might be useful.

Comm/Comm: Kunselman and the DDA

During his communications slot at the end of the council meeting, Stephen Kunselman (Ward 3) noted that the Ann Arbor Downtown Development Authority has submitted its missing TIF status reports from prior years. He summarized the excess of expenditures over revenues for FY 2008 ($138,000), FY 2009 ($1.9 million) and FY 2010 (3.8 million). He said that FY 2011 had just closed out, but on DDA estimates, the excess expenditures over revenues is $3.9 million. [.pdf of report compilation]

Stephen Kunselman (Ward 3) settles in before the start of the July 18 council meeting.

Kunselman suggested that the only way to close that gap was to open up the spaces in the new parking garage and increase rates. He characterized the situation as “fiscally irresponsible.”

Kunselman has made the DDA’s financial accountability a campaign theme for his Ward 3 Democratic Party primary election race. He faces two challengers: Ingrid Ault and Marwan Issa.

In an uncharacteristic break from the form of the agenda’s communications slot, mayor John Hieftje responded to Kunselman’s remarks by telling Kunselman that if he felt that way, then he shouldn’t have voted to approve the DDA’s budget back in May. [Hieftje sits on the DDA board and appoints its members, with confirmation from the city council.]

Kunselman responded to Hieftje by noting that the budget books that are presented to the council do not include past years’ information, and it is not presented in a way that highlights excesses of expenses over revenues.

Comm/Comm: First and Washington, Village Green

Interim city administrator Tom Crawford gave the council an update on the Village Green City Apartments project located at the city-owned First and Washington lot. Village Green plans to build a 9-story, 99-foot-tall building on the lot, with 156 dwelling units.

He reminded the council that they’d last heard from him on the subject of a “bathtub” foundation design, which resulted in the council reducing the purchase price for the land by $100,000, from $3.3 to $3.2 million. Design work has been progressing, Crawford said, and a refinement of the interior is being undertaken to provide a best-as-possible parking experience for people. He said it would probably require another 60-day extension on the purchase option agreement. He wanted to give the council a heads up. Village Green is still hoping to start work on the project this construction season.

Comm/Comm: Progressive Agenda, Unity

Thomas Partridge addressed the council during public commentary at the beginning and the end of the meeting. He introduced himself as a Washtenaw County Democrat, a father and grandfather, and an advocate for all those who need government services – a majority of the residents of the state and city. He reminded everyone of the recall effort against Gov. Rick Snyder. The deadline is Aug. 5, he said.

Ann Arbor, Washtenaw County, and all local governments in the state are suffering from a reduction in state shared revenues, Partridge said. He called on the city council to act in a progressive, democratic manner with respect to all fees, including water and sewage fees. About all land use, planning, and zoning, and funds spent on capital improvements the council should think progressively, Partridge concluded.

Partridge also reminded the council of the recent death of President Gerald R. Ford’s wife, Betty Ford, of Grand Rapids, Mich. He called on all parties to come together with intelligent compromises and to be aware of the dire state that the residents of Michigan have been put in by the Michigan legislature and Gov. Snyder.

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

Next council meeting: Aug. 4, 2011 at 7 p.m. in the second floor council chambers of city hall, located at 301 E. Huron. [confirm date]