Receiving final approval were special assessments of property owners to help pay for construction of three different sidewalks – on Stone School Road, Barton Drive and Scio Church Road.

The new sidewalk on Stone School Road will be on the west side of the road. This work will be done in conjunction with the Stone School Road reconstruction project from I-94 to Ellsworth Road. The total sidewalk project cost is roughly $128,500, of which about $55,000 will be special assessed. A public hearing on the special assessment took place at the council’s July 7 meeting. Three representatives of the Jehovah’s Witnesses, which owns property on Stone School Road, addressed the council about the amount of the special assessment they’ve been assigned. They asked for some kind of waiver, given the nonprofit status of their organization. Mayor John Hieftje indicated that city staff would provide them with options.

The Barton Drive sidewalk project will extend eastward from Bandemer Park at Longshore Drive. The cost of the Barton Drive sidewalk has been calculated to be $80,606. Of that, about $36,000 will be paid from federal surface transportation funds. Of the remaining $44,606, the city’s general fund would pay $42,626, leaving just $1,980 to be paid through the special assessment.

For the Scio Church sidewalk project, the total cost is expected to be $365,100. Of that, about $164,000 will be paid from a federal surface transportation grant. The remaining $201,100 will be paid out of the city’s general fund and by the special assessment of just $1,626.

Several other contracts appeared on the council’s July 7 agenda that were related to infrastructure maintenance and repair. The council approved a $344,600 contract with Cadillac Asphalt LLC for repair of streets after water mains, storm and sanitary sewers are repaired. The city’s public services area does not have the equipment or the staff to perform these types of street repairs, which often involve the replacement of the concrete base or the concrete street surface, according to the staff memo accompanying the resolution.

The city council also awarded a $175,000 contract to replace a clarifier drive in the drinking water treatment plant – to Titus Welding Company. According to a staff memo, the drive to be replaced is original to the plant and was installed in 1965. It had an expected life of 30 years. It has begun to show signs of failure, included seizing, high vibration, and bearing failure. The drive has been assessed by the manufacturer and it has been determined that it is not cost-effective to repair, according to the memo.

Also approved by the council was a $205,055 contract with Renosys Corp. to install PVC pool liners at Buhr and Fuller pools. The city is switching to PVC from Marcite, which is, according to a staff memo, a “cementitous product that covers the pool shell creating a smooth and waterproof surface.” The new product has a smoother surface, and won’t require the yearly patching required due to harsh winters and wear and tear on the pool, according to the staff memo.

Also approved at the July 7 meeting was a $80,836 contract amendment with Tetra Tech Inc. for environmental consulting services at the now-closed Ann Arbor landfill. That brings the total amount on the contract to $624,221. According to a staff memo, for several years the landfill has had a plume of 1-4 dioxane and vinyl chloride contamination offsite primarily in Southeast Area Park, northeast of the landfill. A slurry wall was constructed along most of the boundary of the landfill to eliminate groundwater passing through the landfill, and three purge wells were used to attempt to capture the offsite contamination.

And finally, the council passed a resolution approving $125,000 contracts with Stantec Consulting Michigan Inc. and Fishbeck, Thompson, Carr & Huber Inc. for general civil engineering and surveying services. Those services include a range of activities, according to the staff memo accompanying the resolution: design and management of capital improvement projects; private development construction plan review; private development utility and road construction inspection; traffic engineering; civil engineering design; construction inspection; drafting; and surveying.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.

A sidewalk marked with a “C” – which indicates that it needs to be cut flush – on Fifth Avenue south of William Street.

The sidewalk repair program is funded out of a five-year millage approved by voters in November 2011.

Some sidewalk slabs are in reasonably good shape but are out of alignment with adjacent slabs. The city takes the approach of shaving the portion that’s out of alignment so that it’s flush.

Cutting the concrete is more cost effective than replacing the entire slab. The contract for the cutting work for the upcoming 2014 program was awarded to Precision Concrete Cutting for $207,350.

The other part of the program involves outright replacement of sidewalk slabs.

That contract with Doan Construction Company for $1,707,037 was also approved by the council at its April 7 meeting.

Areas of the city of Ann Arbor where sidewalk repair will be done in 2013 and 2014.

In addition to an annual sidewalk repair program, the city manages an annual street resurfacing program. Also on April 7, the council approved a construction contract with Barrett Paving Materials Inc. for $3.409 million for the 2014 program. Also approved was a contract for materials testing – with CTI and Associates Inc. for $82,332.

Heavy black highlights indicate stretches of road that are a part of the city of Ann Arbor’s street resurfacing program in 2014.

Text descriptions of the streets to be resurfaced are as follows:

• Washington: First St to Fourth Ave (April – May)
• Fuller: Maiden Lane to Huron River Bridge (May – June)
• Newport: Sunset to south of Bird Rd (June – July)
• Linwood:, Doty to Wildwood (April – May)
• Northside Grill Alley: Broadway to End (April – May)
• Vinewood: Berkshire to Avon (May – June)
• Steeplechase: Whiltshire to Blaney (June – July)
• St. Aubin: Platt to Creek Dr (June – July)
• Woodbury: Astor to Stadium (July – July)
• Prairie: Plymouth to Aurora (July – August)
• Burlington Court: Burlington to End (July – August)
• Waldenwood & Adjacent Courts: Penberton to Earhart (north end) (July – September)

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.

From left: Jane Lumm (Ward 2), assistant city attorney Mary Fales and Stephen Kunselman (Ward 3). (Photos by the writer.)

After two postponements, the council gave initial approval to a set of changes to the ordinance that establishes the Ann Arbor Downtown Development Authority (DDA). The changes can be divided into those that affect board composition and those that relate to the computation of the DDA’s tax increment finance (TIF) capture.

The tax calculations have implications of roughly $1 million a year for the DDA and the taxing jurisdictions whose taxes are captured by the DDA. Those taxing jurisdictions include the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. The vote was 7-3, as mayor John Hieftje, Margie Teall (Ward 4) and Chuck Warpehoski (Ward 5) voted no. Christopher Taylor (Ward 3) was absent. The final vote will likely come at the council’s April 15 meeting. Councilmembers are not obligated to vote the same way the second time around.

The council also wrapped up an issue that has appeared on its agenda for several meetings. At its March 18 meeting, the council had finally decided not to enact a moratorium on site plan applications in D1 (downtown core) zoning districts. Instead, the council had directed the planning commission to conduct a review of D1 zoning. But councilmembers had left open the question of the exact scope of work and the timeframe for its completion by planning commissioners. At the April 1 meeting, the council allowed the commission six months, until Oct. 1, to review the following: the appropriateness of D1 zoning on the north side of Huron Street between Division and South State and the south side of William Street between South Main and Fourth Avenue; the residential premiums; the zoning for the University of Michigan Credit Union parking lot.

Other business was further delayed by the council. At the developer’s request, the council postponed for a second time the 413 E. Huron project, a proposed 14-story, 216-apartment building at the northeast corner of Huron and Division streets. That project will come back before the council at its April 15 meeting. A new public hearing on the 413 E. Huron site plan application was started on April 1 and will continue on April 15.

The council also postponed a second and final vote on changes to the city’s sign ordinance. The changes would prohibit any new billboards, and allow only a limited range of digital signs. That won’t come back before the council until May 6. Several people addressed the council during the public hearing. All of them worked for Adams Outdoor Advertising, and spoke in opposition to the changes. Because of the postponement, the council extended a moratorium on digital sign applications, which has now been in place for a year.

The council also extended a moratorium on spending of monies that have been set aside under the city’s Percent for Art ordinance. A revision to that ordinance, which would likely eliminate the public art set-aside but still allow for aesthetic elements to be built into a project, is expected to be brought forward in the next few weeks. The public art ordinance revisions are being crafted by a council committee that was tasked with that responsibility in December of 2012.

At its April 1 meeting, the council also approved contracts for renovations at the Gallup Park canoe livery, and the Argo and Geddes dams. In addition, the council approved a lease for additional parking in connection with the Argo Cascades.

Other business at the meeting included council approval of the notice to issue bonds for the city’s drinking water system. The council also authorized contracts in connection with street reconstruction and sidewalk repair work for the 2013 season.

DDA Ordinance

Several revisions to Chapter 7, a city ordinance governing the Ann Arbor Downtown Development Authority (DDA), were on the council’s agenda, having been postponed twice previously. The council had postponed voting at its March 18, 2013 and March 4, 2013 meetings. [.pdf of DDA ordinance given initial approval on April 1]

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

In the first category are: a new prohibition against non-mayoral elected officials serving on the DDA board except by agreement with the other taxing jurisdictions; term limits on DDA board members; and a new requirement that the DDA submit its annual report to the city in early January.

An amendment to the ordinance changes offered by Jane Lumm (Ward 2) during the meeting was accepted as friendly. It was meant to assure a focus on the DDA’s support of housing. It stipulated that if tax increment financing is used as the financing method for an approved authority project, the project must meet one of the DDA’s adopted plan goals. Among those plan goals is support of housing. Lumm’s change provides the ability of the DDA to make investments in properties not just in the district, but also in neighborhoods near the district.

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

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

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

In the Chapter 7 ordinance language, the amount of TIF capture that’s returned to the other taxing jurisdictions is tied to growth in the valuation in the district. Under Chapter 7, if the actual rate of growth outpaces the growth rate that’s anticipated in the TIF plan, then at least half the excess amount is supposed to be returned to the other taxing authorities in the DDA district. In 2011, the DDA for the first time returned excess TIF capture to other authorities, when the existence of the Chapter 7 language was reportedly first noticed. At that time, the DDA made repayments of TIF monies to other authorities of around $400,000, which covered what was owed going back to 2003. When the DDA calculated the amounts owed in 2011, the city of Ann Arbor waived its roughly $700,000 share. Subsequently, the DDA reversed its legal position, contending that it had not needed to return the money it had repaid.

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

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

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

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

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

-

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

DDA Ordinance: Task Force

During council communications time at the start of the meeting, Sally Petersen (Ward 2) reminded her colleagues that she’d announced at the previous meeting  – very late during the evening – that she would be bringing forward a resolution to establish a task force focused on the DDA. She had proposed the group’s specific assignment as conducting a strategic assessment of the priorities for economic development between the DDA and the city. After that, she’d had conversations with the DDA and had changed the scope of that initiative a bit. The focus would not just be the DDA but rather the idea of economic development – which would align the priorities of the city, the DDA and Ann Arbor SPARK. She was working with the city attorney’s office on the language of the resolution, she said, and is hoping to bring that resolution forward on April 15.

DDA Ordinance: Audit Committee Update

During council communications time at the start of the meeting, Sumi Kailasapathy (Ward 1) gave an update on the activities of the council’s audit committee. She said the committee did get answers to its questions via the city’s CFO. The auditor indicated that during the past year’s audit, the auditor did not review the DDA’s TIF capture for compliance with Chapter 7 of the city code. She found that “really troubling” because the DDA’s own 2003 renewal plan states that the TIF account has to be tested for compliance under the state of Michigan’s Downtown Development Authority Act. Secondly, Kailasapathy continued, the auditor’s own report on controls and compliance states that they tested the DDA’s financial statements for compliance – but when specifically asked if it was tested for Chapter 7 compliance, the answer was that it had not been. She indicated that she felt DDA deputy director Joe Morehouse, who handles the DDA’s finances, and city CFO Tom Crawford need to take up this issue. She stated that an audit has high standards, and if compliance with Chapter 7 has not been tested, then it needs to be tested. She ventured that it might be necessary to reissue the financial statements of the DDA.

Margie Teall (Ward 4), who chairs the audit committee, responded to comments made by Kailasapathy at the council’s March 18 meeting, when Kailasapathy noted that Teall had not been being willing to call a meeting. [A previous meeting of the audit committee was called by two of its members – Kailasapathy and Stephen Kunselman (Ward 3) – which is a possibility under Robert's Rules. The other possibility is for a meeting to be called by the chair.] Teall contended she had always been willing to meet. But she was waiting until all the DDA staff could attend. [DDA deputy director Joe Morehouse was on medical leave.] Teall noted that the audit committee would be meeting with the DDA staff the following day, and pointed out that DDA staff had acknowledged the shortcomings, and said they’d be addressing them. Teall indicated that the response from the DDA staff to the questions they been asked was that they’re “on top of that.”

DDA Ordinance: Council Deliberations

Stephen Kunselman (Ward 3) led off the deliberations by saying that the item had appeared a couple of times previously on the council’s agenda and he hoped that this evening the council could finally get some discussion going, and take the initial vote at the first reading.

What he had done in cooperation with Sumi Kailasapathy (Ward 1) – the co-sponsor on the proposed ordinance changes – was to put together a substitute version for the original. The substitute version reflects some changes that had been talked about “out in the community,” Kunselman explained. Some of those included the cumulative methodology for calculating the tax increment finance (TIF) capture.

In addition, the section on board composition is different in the substitute version. Rather than preventing any elected officials from serving on the DDA board, based on discussions with some of the members of the other taxing jurisdictions whose taxes the DDA captures, it had become apparent, Kunselman said, that anything the city was doing should be done in concert with the taxing jurisdictions. He then quoted from the revised substitute ordinance changes:

(1) Except for the Mayor as provided above or by mutual written agreement of the taxing jurisdictions levying taxes that are subject to capture by the authority, no public official of any taxing jurisdiction levying taxes that are subject to capture by the authority shall be eligible for appointment, whether in his or her official capacity or as an individual; and
(2) No member may serve more than 2 consecutive full terms.

Kunselman said he knew there had been a lot of information going around generated by the city staff and by the Ann Arbor DDA board members – talking to various groups to seek support for their position. His perspective on the issue, he said, was to focus on “keeping the DDA’s budget relatively whole, tightening up some of the administrative functions.” He felt it would become apparent that there are some elements of the state law which the Ann Arbor DDA’s financing plan doesn’t follow, but the proposed amendments would bring clarity to that. “We know that there is an issue with the clarity of the TIF methodology,” he said. He noted that the mayor had received a letter from one of the taxing jurisdictions [the Ann Arbor District Library] disagreeing with the method that had been used.

“If we allow these things to occur on our watch, then we are complicit to the fact that we’re ignoring what the law says,” Kunselman said. He then quoted from the state enabling legislation for DDAs:

The plan may provide for the use of part or all of the captured assessed value, but the portion intended to be used by the authority shall be clearly stated in the tax increment financing plan.

Kunselman ventured that everyone had seen the three columns that are included in the Ann Arbor DDAs financing plan – which show projections of growth labeled as pessimistic, realistic, and optimistic. For whatever reason, Kunselman said, the DDA board keeps approving a budget based on the optimistic version of the TIF financing plan. The realistic column is the one that is set in bold typeface, he noted. If it’s not clear, then Kunselman contended that it is not in compliance with the state law. That was his whole point in bringing the amendments forward. His point was to bring confidence back to the DDA. Responding to criticism about what Kunselman was actually trying to accomplish, he spoke directly to mayor John Hieftje: “Mayor, I have never asked for the dissolution of the DDA. And I’m certainly not about to now. I’m just trying to give our DDA institution some clarity, some confidence, and some trust in how it works on our behalf.”

Stephen Kunselman (Ward 3).

Sabra Briere (Ward 1) asked for clarification about Kunselman’s effort to put the substitute ordinance amendments before the council for consideration. Hieftje checked with Kailasapathy that it would be acceptable to consider the substitute version. And with that the substitute amendments were before the council.

Hieftje ventured that councilmembers would have several questions for staff. He invited executive director of the Ann Arbor DDA Susan Pollay to the podium. Hieftje noted that the council had only recently received some answers to questions that had been posed by email. He began by reading off some of them from his laptop screen: Will the DDA continue to be able to make grant payments to the city for the courts and police building? Hieftje noted that the Ann Arbor DDA had awarded the city a grant to support the construction of the new Justice Center [aka police/courts building] – and he had seen the paperwork on that. [As a member of the DDA board, Hieftje voted for the $8 million grant, which was to be paid in roughly $0.5 million installments.]

He explained that the amount of the grant worked out to $508,000 a year. Hieftje then recited the history of how Washtenaw County had decided that the city needed to move the 15th District Court out of the county courthouse space. And a new building with a police station had been completed by the city [called the police/courts building, the Justice Center or the municipal center]. Hieftje characterized the situation as “the DDA stepping up to the plate.” Hieftje alluded to the fact that under the state statute, a public building in the downtown area was an eligible DDA project.

About the DDA resolution pledging the $8 million grant to support the construction of the new Justice Center, Hieftje told Pollay: “As I read that, though, that is a grant. And if the DDA felt that they had other uses for those funds, it would be at the discretion of the DDA to move those?” Pollay’s answer: “It is.”

Hieftje moved on to the topic of the other activities: What other aspects of the DDA’s activities would be impacted by the ordinance change? He indicated that the DDA had identified various things. Margie Teall (Ward 4) asked about the impact on affordable housing grants.

Pollay indicated that whether such grants would continue would depend on the budget. She said the DDA was just finishing a period where a significant amount of construction had taken place, and fund balances are approaching their minimum, she said. The housing fund is now at zero, she reported. In the next two-year budget, recently adopted by the board, the DDA is anticipating transferring some additional money into the housing fund. But that depends on revenues, she said, which would determine whether there would be sufficient money to make those housing funds transfers. An upcoming grant is planned for the Village Green City Apartments project, which will have four units of affordable housing – with “affordable” defined as accessible to residents with incomes at 60% of the average median income or below. That grant would exhaust all of the housing fund balance, Pollay said.

Depending on whether the ordinance is enacted, she continued, the housing fund balance could be restored or not. At that point, Jane Lumm (Ward 2) indicated she had emailed everyone a note in the last 15 minutes related to Teall’s question. She was suggesting an amendment to the ordinance changes to address the concern that Teall had expressed. She had sent the amendment at 8:10 p.m., she said. Not all councilmembers had received Lumm’s message. So she sent the message again.

The amendment was eventually accepted later as friendly by Kunselman and Kailasapathy. With italics indicating additions and strike-through indicating deletions compared to the original version, Lumm’s amendment read as follows:

(4) Development Plan Projects: In identifying, approving, and financing possible projects to meet the goals of the plan, the authority shall comply with the following:

If tax increment financing is used as the financing method for an approved authority project, the project must be meet one of the adopted development plan goals specifically allowed under Act 197 and directly benefit properties within the downtown development district or near-downtown neighborhoods.

While Lumm sorted out the email issue, Hieftje followed up with more questions for Pollay.

He confirmed with Pollay that the Library Lane underground parking garage was the largest project that the DDA had ever undertaken. It was anticipated, Hieftje said, that the Library Lane project would have a significant impact on the TIF fund, and on the TIF fund balance as a consequence of that major construction project. But he ventured it was anticipated that in the future there would be additional revenues generated by new developments in the downtown, and that those additional TIF capture revenues would be used to replenish the DDA’s fund balances and prepare for future projects. Pollay confirmed for Hieftje: “That is all correct.” Hieftje added, “That’s the way I remembered it as well.”

Kunselman followed up with a question for the city attorney’s office: How much of the TIF can be kept in savings, if state law requires – and the city’s own Chapter 7 states – that surplus funds should be paid back to the taxing jurisdictions? We’ve heard that there is $2 million worth of TIF money sitting in the DDA’s account, Kunselman said, and we know that $4 million worth of TIF was transferred to the parking fund. It seemed to him that there was a lot of TIF money sitting in an account. He then quoted from the state statute:

The authority shall expend the tax increment revenues received for the development program only pursuant to the tax increment financing plan. Surplus funds shall revert proportionately to the respective taxing bodies.

And the city’s Chapter 7 indicates that if the rate of growth in the tax valuation within the DDA district exceeded a certain rate, then money has to be returned to the taxing jurisdictions, Kunselman said. He reiterated the Ann Arbor District Library’s disagreement with the DDA’s method of calculating the excess TIF capture. He returned to the issue of the three different columns of estimates in the TIF plan – and the DDA’s practice of using the optimistic column as opposed to the realistic column. “Where do we stand on the issue of state law on this issue of surplus?” Kunselman asked the city attorney.

Assistant city attorney Mary Fales indicated that her understanding of the DDA’s position is that there currently is not a surplus – that the funds are encumbered, either in reserves or for actual expenses. If there were a surplus, she continued, it would be applied based on Chapter 7, and distributed according to state law. She understood Kunselman’s intent to clarify the language of the ordinance, as involving the application of a specific element of Appendix C (the realistic approach) and the use of a cumulative method.

Sabra Briere (Ward 1). In the background is Sumi Kailasapathy (Ward 1).

Briere indicated she was not clear about what the word “surplus” means. When the city deals with its budget, she continued, they try to balance anticipated revenues against the anticipated expenditures. But in any given year the city might end up with money that’s transferred into the fund balance. That fund balance is then used perhaps in a subsequent year. When Kunselman talks about surplus dollars, does that refer to the same situation? she asked. Or is he talking about money that falls outside of the “interesting calculation” that is supposed to be done? What she thought of as fund balance had been described by Kunselman as surplus. “What does surplus mean?” she asked.

Fales noted that the state’s DDA statute does not define the word “surplus.” So you would apply normal principles to define it, which would be funds that are not required for immediate expenses or anticipated expenses – because that’s usually what surplus means, Fales told Briere. Briere asked if that meant for a given year or for a longer period – say if someone anticipated that they would be spending funds in three years. Fales said that the report the DDA is required to do is for specific information on an annual basis. On an annual basis, the DDA could identify encumbered funds, she said.

Kailasapathy indicated she felt there was some confusion, because what Kunselman was talking about is fund balance – which is a balance sheet item. But the TIF refund described in Chapter 7 actually has to do with the revenue income level, she explained. So if you take in revenue at a certain level, and if there is excess, then you have to refund some of it. She asked Fales if Fales agreed that this was a point of confusion. She asked Fales to confirm that the refund is actually based on revenue, not on the balance sheet. “I think that’s true,” Fales said.

Sally Petersen (Ward 2) indicated she had a question for DDA board treasurer Roger Hewitt. She recalled a conversation that the two of them had in September 2012 when they had first met. She wanted to make sure that she had the correct assumption in mind. She remembered expressing some concern to Hewitt about TIF being used to pay down the parking garage bonds. “I believe you assured me that at the end of fiscal year 2014-15, that TIF transfers for the parking garage bond payments would no longer happen.”

Hewitt indicated he thought that was correct, but thought it could be a year later than that. After some consultation with Susan Pollay and Joe Morehouse, Hewitt indicated that the TIF transfers to support the parking fund payments would continue past fiscal year 2015 for another year. Petersen asked if that was in the DDA’s three-year or five-year budget. Hewitt indicated that the budget for the DDA is adopted two years at a time. Beyond that, Hewitt said, the DDA uses a 10-year plan, which is a planning document, not a budget document.

Petersen got confirmation that the bonds in question are bonds the city has issued on behalf of the DDA. Hewitt took the opportunity to address the impact of the proposed ordinance change, which would strike one of the paragraphs that describes bond obligations. “The funds that we’re talking about being returned to the city, are only after the debt service has been satisfied,” Hewitt contended. He described the debt service of the DDA as being around $7 million a year. Petersen clarified with Hewitt that the bonds in question are not DDA bonds but rather city bonds. Hewitt allowed that they are city bonds, but the DDA has pledged its revenues to pay the debt service on the bonds.

Petersen indicated that she felt it was debt service on the DDA’s own bonds that is a “disqualifying condition” laid out in the ordinance, not debt service on the city’s bonds. She wanted to know if debt service on the city bonds would count as a disqualifying condition for the refund if the bonds are city bonds versus DDA bonds. City CFO Tom Crawford indicated that the city staff had spent a fair amount of time looking at that provision of the Chapter 7 ordinance: “It’s not very clear, it’s very confusing,” he said. The city’s interpretation is that it was not just restricted to DDA bonds but also included city bonds. Crawford indicated that there are still some DDA bonds that are being paid off and also some bonds that the city has issued on behalf of the DDA. “But it’s not real clear in the language,” he allowed.

Susan Pollay brought the DDA’s outside counsel, Jerry Lax, to the podium. Lax ventured that no one would say anything that provides crystal clarity, but as he understood the state-enabling legislation for DDAs, it specifically authorizes city bonds to be used for the kind of purposes that the DDA fulfills, and specifically authorizes the pledging of DDA funds for the repayment of those bonds. And the statute specifically allows for TIF funds for that purpose, he said. What Chapter 7 provides, Lax continued, is a provision that indicates money is not to be returned to the taxing authorities while there were debt obligations to be paid.

From left: Sabra Briere (Ward 1), Jane Lumm (Ward 2) and assistant city attorney Mary Fales.

Jane Lumm (Ward 2) admitted to being confused. She quoted out the paragraph about payment into bond reserve funds. It’s not clear exactly what that means, she said. She felt it might be interpreted as just a guide to say: Make sure you pay the debt service. Or it might mean that no refund should be made if the debt service is greater than the TIF capture. She noted that currently the amount paid by the DDA in debt service is far in excess of the TIF revenue, but she pointed out that parking revenues are also used for debt service.

Lumm also observed that the DDA has “flip-flopped” on the question. In 2011, the DDA had made refunds, she noted. But later in 2011, the DDA changed its position and said that it should not have made the refunds, and changed its interpretation of the ordinance.

Lax allowed that it’s understandable why Lumm would raise that point of the DDA changing its position on the ordinance. “Frankly, I think the answer might be a little more simple than it otherwise would appear, which is the initial repayment of monies to other taxing jurisdictions, I think, was simply made erroneously. And I think if you read the entire language of Chapter 7, it’s clear that those did not have to be made.” Lax allowed that there was some confusion about the ordinance language, but he felt there were some things that were moderately clear. One of the things that’s moderately clear is that the state statute does contemplate the use of city bonds to fund DDA projects. He returned to his point that the initial repayments were erroneous. Chapter 7 of the city ordinance is “a touch clearer than people might be suggesting,” Lax contended.

Kunselman asked Lax if the DDA has to put all TIF revenue toward debt. His understanding was that the DDA had put all of its 2012 TIF capture toward payment of parking bonds. Other grants have been paid out of parking revenues. In FY 2011, according to the DDA’s audit, Kunselman continued, the DDA had collected $3.4 million in TIF and the DDA’s expenditures had shown $3.3 million in grants. So almost no money went to pay parking structure debt in 2011, Kunselman said. But under Lax’s interpretation, Kunselman ventured, all TIF first goes toward debt.

Lax disputed Kunselman’s paraphrase of what Lax had said. Lax said he’d simply indicated that under the state statute, TIF funds are available for repayment of debt. Lax said the statute doesn’t say that repayment of debt must be the top priority, or that all of the TIF must be used in that way, or that a certain percentage of it must be used in that way. The state statute says only that the TIF funds are among the DDA assets that can be used for repayment of debt, Lax said. In any given year, if a budgetary decision is made to use TIF funds for specific statutorily-authorized purposes, Lax continued, he thought the statute contemplates that those kinds of decisions are within the judgment of the DDA.

Kunselman came back to the point that before a rebate is given to any of the taxing jurisdictions, on Lax’s interpretation, the DDA has to pay debt. Lax replied that the TIF funds are not being put away into some kind of lockbox, but rather they are being budgeted for authorized purposes.

Pollay added that the kind of projects the DDA undertakes are not annual projects. The projects that the DDA takes on are large capital improvement projects. The Fifth and Division streetscape improvement project took seven years, she said – to be fully planned, to get city council support, to fund, and finally to implement it. If the DDA takes on large projects like that, which was a $7 million capital improvement project, the DDA has to have the ability to have a fund balance sufficient to be able to make the minimum 15% down payment that’s required if a bond is issued – under the city’s own rules. So the DDA in its history has followed a pattern of increasing its fund balances and then depleting them when it takes on capital improvement projects. The DDA is about to begin that cycle again, she said. It takes several years to go through a cycle, she said.

Hieftje asked Pollay what DDA projects would have to be put aside and could not be completed if the ordinance changes were approved. It’s difficult to know, Pollay said. It’s her understanding that in fiscal year 2014, $373,000 would be removed from what the DDA had budgeted for that year. And the year after, there would be another roughly $80,000 less. That would likely impact the DDA’s ability to respond to projects that are “teed up” that the DDA had hoped to take on, she said. The most immediate one was to complete the curb ramp replacements downtown. The DDA and the city share an obligation to complete those repairs. The DDA has taken on the lion’s share of those in the downtown area, she said, but some remain to be done.

The other project the DDA feels is also pretty critical is replacing streetlights on Main Street, Pollay said – because they have reached the end of their useful life. Unfortunately, she added, it’s a very expensive project. The estimate includes replacing the globe lights – which are a signature design element for the Main Street area – and that will amount to around $650,000. The DDA had hoped it could begin to pledge some of their dollars to the city’s public services area to see that streetlight replacement project done this year, Pollay indicated. But that would have to be put off for this year, if the ordinance changes were enacted, Pollay said.

While those two projects were part of the short-term impact, Pollay said the long-term impact goes back to the fund balances. The DDA had just begun developing plans for its next big projects, Pollay said. With a TIF reduction, it would be many more years before the DDA could take on any really significant large project. “And I mean years,” she said, “We just would not have the funds available.” The parking rates have been raised, Pollay continued, and the DDA felt that they were currently at the upper end of where they should be. So there really are no other sources of revenue other than TIF revenues.

Hieftje asked Tom Crawford for confirmation that the ordinance change would put $277,000 back in the general fund. That’s after subtracting the amount that’s passed through to the Ann Arbor Transportation Authority. He asked what the impact would be if the DDA exercised its “discretion” to rescind the $508,000 grant for the police/courts building. Hieftje calculated that would have a negative impact of over $200,000 on the city’s general fund. Crawford confirmed that if the DDA were to not pay the installment of the $8 million grant that the DDA had previously approved, it would create a deficit in the city’s general fund. “I can understand why they might do that given that $559,000 was already coming to the city,” Hieftje said.

Lumm indicated that she figured this meant the city would need to pick up the expenses that the DDA had been covering. Briere noted that the calculations as done under the ordinance revisions would result in roughly an additional $70,000 being paid to the Ann Arbor Transportation Authority. But the DDA already provides a grant to the AATA to subsidize go!passes for $479,000, plus additional funds for transit service on Packard Road and Washtenaw Avenue. She asked Pollay if the ordinance revisions would affect the DDA’s funding of the AATA’s services. Pollay noted that the DDA board had recently approved the AATA grant for fiscal year 2014. So she did not feel that there would be an immediate impact. That would be subject to budgetary considerations in the future.

Briere then turned to the topic of where DDA TIF revenue could be invested. One of the ordinance amendments defines it to be strictly within the boundaries of the DDA district. She asked if that was in any way related to the Ann Arbor Transportation Authority and the amount of money that the AATA receives from the DDA. Susan Pollay explained that parking revenue had been used since the beginning of the DDA’s subsidy for transportation services – because the DDA believes that the parking structures and the bus system are all part of a transportation system. She did not believe that this would be impacted by the proposed ordinance amendments. What would be impacted are those projects that are paid for with TIF revenue. She referenced the state statute:

An authority shall be a public body corporate which may sue and be sued in any court of this state. An authority possesses all the powers necessary to carry out the purpose of its incorporation. The enumeration of a power in this act shall not be construed as a limitation upon the general powers of an authority.

Pollay appealed to that passage as the justification for spending TIF revenue on investments that are physically located outside the geographic boundary of the DDA TIF district. She was not sure which projects the DDA was currently undertaking that would be excluded by the revised Chapter 7 language. “We have not been informed,” Pollay said. [The proposed ordinance amendments were revised through Lumm's friendly amendment to allow for investments in near-downtown neighborhoods.]

Kailasapathy referred to numbers that had been provided by the city’s financial staff. Those figures indicated that since the early 2000s, TIF revenues to the DDA have gone up 91%. She ventured it would be difficult to find another city fund where revenues had gone up by as much as 91%. Looking at the four years between 2010 and 2013, she noted that the parking fund debt service went from 5% to 45%, to 59%, and then a “staggering” 87% for fiscal year 2013. She felt there was a big mismatch. On the one hand, there is a doubling of revenues from TIF. But almost all of it is being spent on one objective – parking. “It almost looks like you could have been a parking authority,” she observed. She ventured that what had tilted the balance was the Library Lane underground parking garage.

Sumi Kailasapathy (Ward 1).

Kailasapathy alluded to the specter Hieftje had raised about the $508,000 police/courts building grant and Briere’s implied concerned that the DDA might cease funding of AATA services. Kailasapathy characterized them as “disaster scenarios,” but she noted that in the next fiscal year there would be a $300,000 reduction [actually estimated at $363,000] compared to what the DDA had budgeted, and the year after that it would actually start to grow, she continued. So the ordinance revisions would not actually reduce the TIF revenue to the DDA into the future. Instead it would simply cap the rate of growth of net TIF revenues, she pointed out. She ventured that when you grow too fast, or when revenue comes in too fast, development is not a thoughtful process. It becomes lopsided, she cautioned.

Kailasapathy asked Pollay to explain why the DDA’s percentage allocation to parking structure debt had increased so much, even while TIF revenue had increased. Pollay noted that the DDA had predicted, and it has come true, that the tax base for all of the taxing authorities had grown, even though the TIF capture by the DDA had also grown. The DDA receives only 17% of all taxes that are collected downtown, Pollay said. She noted that the city staff had indicated the city’s tax levy in the downtown district in the early 1980s was about $1.3 million. This year the city is receiving $4.1 million, Pollay said.

Pollay contended that all of the taxing authorities are seeing the benefit of their tax base growing. Pollay described how it had been a policy choice back in the 1960s that the downtown would not have zoning for parking, and that the parking system would be public. The DDA had inherited a very deteriorated public parking system, Pollay said, and it had replaced or rebuilt six of the current city parking structures. Parking is a fundamental part of how businesses are able to bring in customers and their employees to the city.

As an economic development strategy, the DDA had also invested money in other things. So while Kailasapathy had characterized the DDA as a “parking authority,” Pollay felt it was because the DDA did a very good job at that – and it’s a fundamental tool that the community of businesses relies on. She listed off some of the parking structures: Ann and Ashley, Liberty Square, First and Washington, Library Lane. Parking is something the DDA has supported since its inception. Pollay responded to a follow-up remark from Kailasapathy by listing through some of the non-parking activities that the DDA undertakes. She mentioned grants for affordable housing and for energy improvements, as well as transportation grants.

Pollay continued by saying you don’t think of the DDA as the agency responsible for it, but as you walk on downtown sidewalks, many of them have been improved by the DDA. Hundreds of trees have been installed, along with benches, bike racks, and alley improvements. The DDA has played a part in helping the city sell city-owned property – mentioning specifically the First and Washington sale [where City Apartments is being built]. She hoped the DDA would be able to support the city on the sale of the former Y lot. She characterized the activities of the DDA as fairly broad. Parking is certainly part of what the DDA does, but it’s not the only part, she concluded.

Chuck Warpehoski (Ward 5) mentioned that city CFO Tom Crawford had recollected that the original 1982 TIF plan had been based on an estimated 5% annual growth of taxable value. The current renewal plan is based on estimated growth of around 3%. Warpehoski asked Pollay if that matched her recollection. Pollay indicated that she did not think that the first plan had a cap. The second plan from 2003 was an attempt to reflect the actual growth that the district had seen to that point, she said.

Kunselman asked which projects were included in the city financial staff’s revised estimates. The answer the council had received from the city’s financial services staff was that the bulk of the increased TIF had come from The Landmark (601 S. Forest), The Varsity (on East Washington) and Zaragon West (at Thompson & William). Kunselman followed up by getting confirmation from Crawford that the TIF capture generated for Village Green’s City Apartments project at First and Washington had not been included in the city’s estimates. Crawford told Kunselman that the forecast that was before the council for fiscal year 2014 includes all newly constructed and complete buildings – plus buildings that were under construction. Crawford explained that at the end of each calendar year, the assessors require property owners to pay taxes on partially complete buildings – so that is included in the forecast of TIF revenue provided by the city’s financial staff.

However, Crawford continued, when projections had been made for fiscal year 2015, the financial staff did not attempt to figure out what developments were possibly coming on line. Crawford had done a more traditional forecast of 3% growth, which the DDA uses for planning, because that’s what it’s been over time. So the forecast provided to the council for FY 2015 did not include Village Green’s City Apartments project. There are so many factors that can come in, Crawford said, that “I’d hate to give you only the good news and not some of the offsetting bad news, so we were somewhat conservative in FY 2015.”

Crawford and Kunselman engaged in some additional back-and-forth over the City Apartment’s project. Crawford said he did not think there was a measurable material value of the new project at the end of the calendar year 2012 – as much of the work being done at that point was digging a hole, he said. But Kunselman ventured that now it has several floors that have been constructed. Crawford allowed that if it were to be assessed today, it would have a value.

Kunselman concluded that the numbers that had been provided by city staff – showing a forecast in FY 2015 with a slight deficit to the DDA’s adopted budget for that year – would need to be revised. Crawford allowed that if he were asked a year from now about what he thought of FY 2015, he would say that the DDA could be expecting some additional TIF revenue from the Village Green City Apartments project. Kunselman ventured that if this ordinance amendment were to pass, the DDA would only see a reduction in its TIF revenues just this year. Crawford characterized Kunselman’s conclusion as a “reasonable possibility.”

Petersen said she felt the ordinance amendments did a good job clarifying and improving accountability – for example, with respect to filing the annual TIF report and setting forth how the TIF is calculated.

Sally Petersen (Ward 2) and Stephen Kunselman (Ward 3).

Petersen indicated that her initial concern was the apparent nearly $1 million “hit” the DDA would be taking in the first year – because she did not want to pull the rug out from under the DDA. But the staff’s answer to the questions that councilmembers had asked was that compared to the DDA’s adopted budget, there would only be a reduction by about one-third as much [$363,000]. She’d contemplated the possibility that Year 1 of implementation of the clarified calculations could be delayed until FY 2015, but she didn’t think that would help much. Her point was that there’s not as much of a “hit” in Year 1 as they’d originally thought.

She was also trying to understand how the DDA was able to absorb a $3 million hit in FY 2012-2013 – when the DDA had doubled capital costs compared to its budget. To Petersen, the budget was “fungible” enough that it was able to absorb a $3 million hit, and the $363,000 shortfall was only 10% of that.

Pollay explained that the difference in the budget was attributable to the timing of completing the Library Lane underground garage and the Fifth and Division streetscape project. The budget is not fungible, Pollay said – it’s a matter of tapping the fund balances. Responding to a question from Petersen, Pollay said that the DDA’s TIF fund balance is anticipated to be $840,000 at the end of FY 2014. [Across all of its funds, the DDA has budgeted in a way that leaves nearly $5 million in fund balance – an amount that includes money set aside for parking structure maintenance – at the end of FY 2014.] Petersen observed that the figure is still more than $363,000.

Pollay offered that it’s confusing because the total amount “that would be taken from the DDA” would be more than $931,000. Compared to the revenue that the DDA had budgeted, Pollay allowed it was only $363,000 less – but that was because the DDA didn’t know there would be additional TIF capture beyond what they’d budgeted.

Warpehoski raised a question about whether the additional increment provided by new projects would actually result in more TIF revenue to the DDA – given the nature of the cap as defined in the clarified calculations. Some back-and-forth between Warpehoski and Crawford determined that Warpehoski had misunderstood one of the lines in the chart. The cap on the DDA’s TIF revenue would be roughly $4 million in FY 2015 and would increase 3% each year from that point – which is an amount that the DDA would likely receive, assuming that Village Green completes the construction of City Apartments and other projects that are expected to be built are, in fact, built.

Warpehoski then got clarification that under the substituted ordinance revisions, an elected official could serve on the DDA board only with the agreement of all, not just some, of the other taxing jurisdictions.

Briere said she tended only to be interested in policy. And one of the points of policy deals with term limits. There are already some time limits – that the terms are four years. She wondered why all boards and commissions don’t have uniform restrictions. She wondered why there needed to be a special policy for the DDA board.

Lumm ventured that the council seemed ready for a vote.

DDA Ordinance: Council Deliberations – Final Comments

Hieftje then began his final remarks on the topic. He said that over the last several years, the city had worked very well with the DDA and that’s worked out very well. In the past, when the city has had any issues with the DDA, Hieftje said, they’ve sat down and talked with the DDA, and that’s turned out very well. Since it was established, the DDA has made a tremendous contribution to affordable housing, Hieftje said. This time around, Hieftje continued, the issue should have been approached by starting a conversation with the DDA’s partnership’s committee. Instead, he said, the council had launched a fairly aggressive ordinance change “against” the DDA “without sitting down to talk to them.” He said that it could have been handled in a much better way.

Hieftje responded to the idea that the possibility of the DDA rescinding the $8 million grant for the police/courts building was only a threat. He contended that to him it was “perfectly logical” that if the DDA, which was anticipating an increase of $991,000 in TIF revenue, instead saw $559,000 being returned to the city, then it would be reasonable to say that the city did not need the $508,000 annual installment towards the $8 million grant. Hieftje claimed that if you start to look at the numbers, the revisions to the ordinance would mean there’s a $231,000 deficit to the general city’s general fund. [This would depend on the DDA breaching its obligation to pay the $508,000 annual installment on the police/courts grant.]

Hieftje also noted that $300,000 has been set aside in the DDA’s budget as a way possibly to pay for police in the downtown. That would increase the number of police officers in the city, which was an expressed goal of some councilmembers, he pointed out. Hieftje was also concerned that this would reduce revenue to the DDA at exactly the point when the DDA is trying to rebuild its fund balances.

Hieftje said he couldn’t figure out why the council had started down this road – except for political reasons. He reviewed his basic points, which were that the DDA had been excellent partners, and he didn’t see a good bottom line for the city. The city should have sat down and talked with the DDA about this issue, Hieftje said. [Representatives of the other taxing authorities met with the DDA as a group in the summer of 2011 to discuss the issue. But they did not pursue that conversation – which some in attendance expected would result in either an ordinance change or a memorandum of understanding among the taxing jurisdictions.]

Kunselman responded to Hieftje’s remarks by saying he appreciated Hieftje’s defense of the DDA, but it was not Kunselman’s intent to sit there and “bash” the DDA. Part of the issue, Kunselman said, is about bringing revenue to the city and the other taxing jurisdictions, who need those additional tax dollars. He said he didn’t think the DDA knows how to spend tax dollars better than Washtenaw County, Washtenaw Community College or the Ann Arbor District Library.

Responding to the idea that the DDA might provide a grant to fund police officers in the downtown, Kunselman dismissed the idea that the city would hire police officers based on a year-to-year grant. That was especially true, Kunselman said, if the DDA could simply exercise discretion to rescind its grants, as Hieftje had claimed was possible. Adopting the ordinance revisions is all about new tax dollars, Kunselman pointed out. All of the projections that the council had seen basically keep the DDA whole, for the most part. He allowed that in the next year, there could be a couple hundred thousand dollars less for the DDA compared to what the DDA had budgeted. But he pointed out that in years past the DDA had taken hits and been able to absorb them.

The DDA is the only agency that has not had a reduction in its budget, Kunselman said. When he hears about what wonderful work the DDA does, he questioned how well the DDA actually managed the parking system – given that debt associated with the system was substantially subsidized with TIF revenue. “Out the other end” of the public parking system, Kunselman said, comes $3.1 million of revenue to the city of Ann Arbor. Before the DDA existed, there was a big concern about the public parking system being a “cash cow” for the city – and at that time there was not even a TIF subsidy. He described the hourly cost for parking as including a “surcharge” of an extra 17%, due to the terms of the city’s contract with the DDA. He questioned whether that was consistent with the case law on the definition of taxes and fees – the Bolt decision.

Kunselman said he’d tried to approach the issue delicately, so that the DDA’s budget was left whole and so that the DDA wouldn’t take a hit to their funds. Other than the light pole and sidewalk ramp project, Kunselman said, there weren’t other projects that the DDA would not be able to complete, based on what the council had been told.

Kunselman said Hieftje was trying to make the issue into some sort of “Kunselman against the DDA,” but it’s not, he said. Instead, it’s about bringing trust and confidence back to the DDA as an institution.

Kunselman briefly addressed the question of term limits for DDA board members, which are part of the set of ordinance revisions. There are term limits for the park advisory commission, he said. The existing DDA board members had apparently not read the law about filing the annual TIF report. He concluded that the DDA board needed new blood and new eyes.

He returned then to the question of how the TIF capture is calculated, wondering why Hieftje had voted year after year to approve a budget using the optimistic projection in the TIF plan. “Why don’t you [Hieftje] answer that for all the citizens of Ann Arbor?”

Kunselman wound up his remarks by noting that the ordinance changes were being considered by the council at a first reading. He hoped councilmembers would support the changes at least to get them to the second reading. He told his council colleagues that if they wanted to give the DDA a $931,000 increase in revenue, they could do that. Or they could support some of those dollars coming back to city. It’s recurring revenue to the city, money that can be used to hire firefighters and police officers. He asked his council colleagues if they wanted to make public safety a priority or parking: “You make the choice.”

Responding to Kunselman’s characterization of his effort as delicate, Margie Teall (Ward 4) ventured that delicate is in the eyes of the beholder. She wished that Kunselman had chosen to bring the issue forward in a more collaborative way.

Teall felt like the DDA is being penalized for doing a really great job. The DDA is what’s responsible for making it possible to attract new tax dollars, she said. The DDA has been a good partner in maintaining infrastructure. She appealed to the notion that a “rising tide can lift all boats.” She wouldn’t support the ordinance changes, she said.

Petersen also wished the approach Kunselman had taken had been more collaborative, but she indicated she wanted to separate out the political from the pragmatic issues. In the long term, she felt that the DDA had done good work and expected that the DDA will continue to do good things, and would expect the TIF fund to grow even more. What the ordinance amendments do is provide clarity, she said. While she wished the approach had been more collaborative, she thought it would help strengthen the DDA in the long term.

Jane Lumm (Ward 2) literally rolled up her sleeves before the April 1 meeting started.

Lumm indicated she’d support the ordinance changes at first reading. She presented her support framed by her concept of what a DDA should be. She believed downtown vibrancy is important to any city’s health and she felt a strong, autonomous DDA is an important tool for achieving that. She did not agree with those who said the city should not have a DDA at all. She’d been around before the DDA had taken over the public parking system, and stated that the DDA had done a very good job on that. But she did believe the city needed a strong, independent DDA. Over the last decade it had evolved from an independent, autonomous body supporting the downtown to an extension of the city council. Lumm did not think that was or is in the city’s best interest. The DDA funds selected city projects and programs – outside the regular budget process. However, a decision about whether to use $0.5 million for the police/courts building or to hire police officers is the kind of decision that should be made inside the regular budget process, Lumm said.

In support of an independent DDA, she’s highly supportive of the ordinance changes related to board governance. She preferred the original set of amendments on elected officials. She supported those elements of the ordinance changes that define TIF capture. She was not wedded to enactment of the clarified calculations beginning for the current tax year, but felt it was important to implement the ordinance change fairly and expeditiously.

Responding in part to the criticism against Kunselman that his approach had been inappropriate, Mike Anglin (Ward 5) observed that Kunselman had talked about the issue for at least a year – starting by asking for a budget amendment last year. [That budget amendment failed.] Anglin acknowledged the partnership the city has with the DDA. He did not think that the ordinance amendments by any means crippled the DDA.

Warpehoski said he’d been wrestling over this issue. When he saw the Fiat dealership or other new projects were built outside the DDA district, he liked all that “TIF capture” it provided. [Warpehoski likely meant something more along the lines of "ordinary taxes not subject to TIF capture."] That was important for the city to be able to provide services to residents, he said. But when he looked at the numbers, he contended that 10 years ago, the city received roughly 17% of all the tax revenue in the DDA district, and even now the city receives about 17% of the revenue, even with the DDA’s TIF capture. He concluded that the city is coming out pretty well. There are all the other ways the city has come out ahead, he said – including the $8 million police/courts grant and the 17% of gross revenues from the public parking system. So if the “problem” is getting revenue, he was having trouble understanding that. The existing arrangement was working out fairly well, he thought.

As far as the optimistic, realistic and pessimistic projections in the TIF plan, Warpehoski felt this was similar to the way his organization [Interfaith Council for Peace and Justice] puts together its budget. So he understood why, from a budget planning perspective, the realistic numbers would be used, but he did not understand why that would be the basis for a cap. He raised the point that before the 2003 renewal plan, the projected growth in the TIF plan had been roughly 5% per year, whereas the 2003 renewal plan was roughly 3%. If the 5% had been brought forward with the 2003 renewal plan, then the cap under the cumulative methodology would be well above the amount of TIF received by the DDA.

Chuck Warpehoski (Ward 5).

On the question of term limits, Warpehoski did not feel that term limits have worked well in Lansing. He called term limits “mandatory inexperience.” Sitting next to one of the most veteran councilmembers, Marcia Higgins (Ward 4), he saw the value of experience. While he understood the desire to reach for the money, he could not support the ordinance amendments.

Hieftje returned to the point that it could have been handled in a much better way. He wouldn’t support it because of the bottom line. He again raised the specter of a $231,000 general fund deficit for the city. He wouldn’t say that sometime in the future, the DDA’s TIF couldn’t be reconsidered, and he felt it could be done in a collaborative way. Hieftje allowed that he’s long said that the DDA is an “arm of the city,” but that he felt he could see the DDA taking action to rescind the police/courts grant.

Briere said that as a person who didn’t do all that well in math, she struggled with the issue. She was always looking for the unintended consequence. Every time she looked at the issue more closely, it seemed to become less clear. She allowed that looking logically at the 2003 TIF plan, it’s the figures in the “realistic” column that should be considered. She indicated that she was interested in having more concrete projections 10 years into the future.

Briere said it’s difficult to separate the political from the financial changes. She wished there had been a more collaborative effort. She’d heard Kunselman say that the impact would only be for one year, but she did not understand that. Briere indicated that her vote that night would depend on watching the votes of those who voted before she did. [Based on the sequence of the roll call, Briere had a clear indication that it would pass at first reading before casting her own vote.]

Higgins called the discussion an extremely interesting conversation. She felt the DDA does a very good job. She felt the DDA had been very good stewards – and nothing she’d heard that night takes away from that. On the question of whether the ordinance amendments had been brought forward in a collaborative process, she allowed that the best route is not always the one that’s taken. She appreciated the fact that new councilmembers with new skill sets were looking at the issue, and it made her step back and look at this too. There were some aspects she agreed with and some aspects that give her pause. She said she’d vote yes on first reading. But she was not saying that she’d vote for it on second reading.

Outcome: The vote was 7-3, as Christopher Taylor (Ward 3) was absent. The initial approval was supported by Stephen Kunselman (Ward 3), Sumi Kailasapathy (Ward 1), Sally Petersen (Ward 2), Jane Lumm (Ward 2), Mike Anglin (Ward 5), Marcia Higgins (Ward 4) and Sabra Briere (Ward 1). Voting against it were mayor John Hieftje, Margie Teall (Ward 4) and Chuck Warpehoski (Ward 5).

In order to be enacted, the changes will need to receive approval from the council at a subsequent meeting, following a public hearing, now scheduled for April 15.

D1 Zoning Review

On the council’s agenda was a resolution setting the scope of work and a timeline for direction given at its March 18, 2013 meeting – that the city’s planning commission should review zoning in the D1 (downtown core) zoning district.

Here are the specific areas of inquiry the planning commission is supposed to address, as set forth in the resolved clause:

RESOLVED, That City Council requests the City Planning Commission to specifically address these issues:
(i) whether D1 zoning is appropriately located on the north side of Huron Street between Division and S. State and the south side of William Street between S. Main and Fourth Avenue;
(ii) whether the D1 residential FAR premiums effectively encourage a diverse downtown population; and
(iii) consider a parcel on the south side of Ann St. adjacent to north of city hall that is currently zoned D1 to be rezoned to the appropriate zoning for this neighborhood; and

RESOLVED, That City Council requests that Planning Commission complete its review and report to the City Council by October 1, 2013.

The three points of inquiry are similar in spirit, but different in their details, from those put forward by Christopher Taylor (Ward 3) at the council’s March 18 meeting. At that meeting, the council had deliberated on the question of whether to give the planning commission direction to conduct the D1 review and to impose a moratorium on the D1 site plans.

The orange-ish area denotes an area zoned as D2 (interface). Darker red areas, including the UM Credit Union parcel (pink arrow), are zoned D1 (downtown core). The red line denotes the boundary of the Ann Arbor Downtown Development Authority district.

At its March 18 session, the council decided to delete the mention of a moratorium from their resolution and to include a promise to define by April 1 the scope of the planning commission’s review and a timeframe for its work.

The first point of inquiry adopted by the council on April 1 differs from that offered on March 18 by omitting mention of historic districts – although the appropriateness of D1 zoning will almost certainly include the relation of D1-zoned areas to historic districts.

The second point of inquiry – about residential FAR (floor area ratio) premiums – had been proposed by Taylor on March 18.

The third point of inquiry is new. The parcel in question is the surface parking lot currently owned by the University of Michigan Credit Union, formerly owned by the now defunct Ann Arbor News.

D1 Zoning Review: Council Deliberations

Sabra Briere (Ward 1) indicated that she and Marcia Higgins (Ward 4) had talked about the content of the ordinance. Higgins had needed to leave the council meeting early, Briere said. The resolution provides additional guidance to the planning commission and sets a clear deadline, she said.

Chuck Warpehoski (Ward 5) expressed some desire that environmental incentives also be included in the review, but he’d concluded that keeping things focused in the resolution as it was written is an appropriate way to move forward.

Jane Lumm (Ward 2) wanted to know how the planning commission would view its responsibility: Would the planning commission feel it had the latitude to consider broader issues? City planning manager Wendy Rampson told Lumm she felt that the commission would initially consider just those issues in the written scope of the resolution and work toward making the Oct. 1 deadline. To the extent that there was time to do so, the planning commission might consider other issues. Responding to a specific question from Lumm about whether six months was enough time, Rampson indicated she thought it was doable. Rampson added that having targeted action is helpful.

Mike Anglin (Ward 5).

Mike Anglin (Ward 5) expressed some concern about the timeframe but said he was glad the planning commission meetings would be televised. Briere, who serves as the city council appointee to the planning commission, told Anglin that the matter would be referred by the commission to its ordinance revisions committee – which met in a way that was noticed to the public and open to the public, but not televised. That committee would make recommendations to the planning commission, and the planning commission would hold a public hearing and give a recommendation to the city council. But she indicated that there would not be a discussion of the topic at every planning commission meeting between now and Oct. 1.

Responding to a question from Anglin, Rampson indicated that the ordinance revisions committee provided an opportunity for public comment at the end of its meetings, usually in an informal way.

Mayor John Hieftje said he was surprised that people were continuing to invest in student-only housing projects, saying that those buildings with 4-5 bedrooms seemed targeted for the student market. He said that Village Green’s City Apartment project, now under construction at First and Washington, was reporting a lot of demand for its 1-2 bedroom units. So he was in favor of making an adjustment to the kind of residential premiums that are offered.

Stephen Kunselman (Ward 3) took the opportunity to ask about the lack of an update on the R4C zoning revisions that have been studied for a very long time now. Rampson indicated that the advisory committee had taken additional time. Some back-and-forth established that Oct. 1 was really a firm deadline. Briere pointed out that there’s significant difference between the resolution that the council was considering for D1 review and the R4C study – in that the council had appointed a group of citizens for the R4C work, which made recommendations to the ordinance revisions committee of the planning commission. Now, what the council is doing had the practical effect of forwarding the matter directly to the planning commission’s ordinance revisions committee. [The draft recommendations for R4C zoning changes will be on the planning commission's April 16 agenda. See recent Chronicle coverage: "R4C Draft Readied for Planning Commission."]

Lumm reiterated the fact that she wanted to make sure the council’s direction was not unnecessarily restrictive.

Outcome: The council voted unanimously to approve the resolution on D1 zoning review.

413 E. Huron

On April 1 the council’s agenda included a resolution on the site plan application for 413 E. Huron – a proposed 14-story, 216-apartment building at the northeast corner of Huron and Division streets.

A new public hearing on the project was started at the April 1 meeting, and held open so that it can resume on April 15. The council first considered the 413 E. Huron site plan at its March 18, 2013 meeting. The new public hearing was the subject of extended discussion by the council.

413 E. Huron: Public Hearing

The council’s vote on the approval of the minutes from previous meetings is typically perfunctory. However, the council’s interest in giving the public additional opportunities to weigh in on the 413 E. Huron site plan resulted in extended conversation about approving the minutes from the council’s March 18, 2013 meeting. On the public hearing, the draft of the minutes, which the council was asked to consider, read as follows:

There being no further comment, the Mayor declared the hearing closed.

Held and Closed

The minutes are based on the fact that mayor John Hieftje said the public hearing was closed, when no one else wanted to speak.

Marcia Higgins (Ward 4) observed that the minutes indicated the public hearing had been held and closed. However, at the point in the meeting when the council voted to postpone the site plan, Higgins said, “We should have then asked to make sure that the public hearing stayed open – as we’ve often done in the past. So I’d like to correct the minutes so that the public hearing would have remained open. It’s been the practice that we’ve had to do that.”

Sabra Briere (Ward 1) ventured that if the minutes are a reflection of what actually occurred at the meeting, she didn’t think it was possible to “correct” the minutes, but she allowed it was possible she might be mistaken about that. City attorney Stephen Postema stated it’s clear that the public hearing needs to go forward in some manner – whether it’s by re-opening it or by some other means. He indicated that one way to accomplish a re-opening would be to reconsider the decision to postpone. Higgins was right about the fact that in the past the re-opening of a hearing has been done at the time of the council’s vote on the item, Postema said. He felt the best way to approach it was to have a new public hearing.

Hieftje got confirmation that the city attorney’s recommendation was to have another public hearing.

Briere wanted to clarify that if it’s a new public hearing, those people who spoke previously can speak at the new public hearing. [If a public hearing is continued, from one council meeting to the next, the council does not typically allow for people who spoke at the first meeting to speak again at the second meeting – because it's the same public hearing that had merely been continued.]

Briere reiterated that the council should just accept the minutes as written. Sally Petersen (Ward 2) asked how the process should have happened. She ventured that the reason the council was in this “predicament” was that when the council voted to postpone consideration of the 413 E. Huron site plan, the public hearing was not re-opened so it could be held open for the next meeting. Hieftje confirmed that Petersen’s understanding was correct.

Higgins added that Hieftje would usually say so at the start of the public hearing if he thinks there was any chance the council would postpone a decision. Hieftje said he’d state something like that only if he thought a postponement was likely – and Hieftje contended he didn’t have any idea the council would postpone 413 E. Huron site plan on March 18.

Assistant city attorney Kevin McDonald talked with Marcia Higgins (Ward 4) before the April 1 meeting.

Higgins questioned whether the new public hearing meant that the council would be considering a brand new site plan. Postema stated that there’s a new public hearing only because the original public hearing hadn’t been held open in the same way it was done in the past. To the extent the site plan has been changed, Postema continued, assistant city attorney Kevin McDonald had recommended that it go back and be treated as a new public hearing at this time.

Higgins stated that she disagreed with the approach of a new public hearing. She felt a new process was being developed for this particular site plan. She said she wouldn’t push it, but felt the council needs to be cognizant of the issue. Hieftje asked Higgins if she was amenable to approving the March 18 minutes and accepting a motion to start a new public hearing later. Higgins said that’s what she thought they’d already decided to do.

When the council reached the public hearing on 413 E. Huron on its agenda, Hieftje indicated that he fully expected that it would be postponed, and that the public hearing would be continued on April 15 if it were to be postponed. No one spoke at the public hearing.

However, during public commentary reserved time at the start of the meeting, Kermit Schlansker commented on what he called a “furor over construction of an apartment complex on Huron Street.” The knowledge that houses will eventually have to be torn town and that people will have to learn to live in apartment buildings in order to save energy is an argument on the side of the apartments, he said. But the city could take a great step toward sustainability by specifying that all new buildings must use a heating system that is at least partially renewable. That could take the form of solar panels on the roof, a solar boiler, a cogeneration system, and an engine-driven heat pump. Eventually, Schlansker said, we will have to use both co-manufactured and solar boilers as heating systems. The easiest choice, he explained would be an engine-driven heat pump, with a cogeneration backup. We have to use every possible trick to ensure our future, he said.

413 E. Huron: Council Deliberations

During the scant deliberations, Jane Lumm (Ward 2) took the opportunity to tell representatives of the developer who were in the audience that she felt the changes that had been made so far – on 8,000 square feet out of 270,000 for the entire project – were about a 3% improvement. She wanted them to understand “what universe” she was coming from.

Outcome: The council unanimously approved the postponement of the 413 E. Huron site plan until its April 15 meeting.

Outdoor Sign Ordinance

On the council’s agenda was final approval of changes to the city’s sign ordinance – to allow for only a limited type of digital signs. Also considered was an extension of a council-enacted moratorium on applications for digital signs, which was set to expire on April 11, 2013.

Billboards on West Liberty Street at First, near the edge of downtown Ann Arbor, looking east. (Photo illustration by The Chronicle.)

If enacted, the changes would mean that a limited type of digital signs would be allowed in the city. But the effect of the proposed ordinance changes would be that no billboards would be permitted – although the existing 28 billboards in the city would be allowed to remain as non-conforming signs. Existing billboards would not be allowed to be retrofitted for digital displays. The council had given initial approval of the changes at its March 18, 2013 meeting. [.pdf of proposed outdoor advertising ordinance]

Under the proposed ordinance changes, new billboards – signs with an area greater than 200 square feet – could not be constructed. And existing signs of that size could not have electronic features added to allow for changeable text or images.

The existing sign ordinance does not allow for any changeable text, except for “noncommercial information which requires periodic change” – like time and temperature. So the proposed changes to the ordinance would allow for changeable portions of a sign, subject to the limitation that the changeable portion of the sign not be more than half the area of any sign and no more than 30 square feet per sign and 15 square feet per sign face. Additional limitations would prevent flashing and scrolling – by not allowing changes to content more often than 15 minutes. The proposed ordinance language states:

Changeable copy shall not and shall not appear to flash, undulate, pulse, blink, expand, contract, bounce, rotate, spin, twist, or otherwise move.

The proposed ordinance restrictions on dynamic elements of signs were motivated in part – based on remarks of city planning manager Wendy Rampson at the council’s March 18 meeting – by the perception that these elements are a distraction to motorists. That argument has been countered by Adams Outdoor Advertising in written communication to the city by citing studies that conclude any distraction does not cause a greater rate of traffic accidents.

The proposed ordinance changes would place a maximum brightness of any illuminated sign, including those that are digital/electronic: 5,000 nits during the day and 100 nits at night, and in no case greater than 0.1 foot-candles above the already existing amount of light at a residential property line. One nit is defined as one candela per square meter. A candela is about the amount of light produced by a common tallow candle.

By way of comparison, an iPhone 5 display is reported to have a brightness of about 500 nits.

The moratorium on digital signs was first enacted for 180 days at the council’s April 17, 2012 meeting. And the city council had extended the moratorium for an additional 180 days at its Oct. 1, 2012 meeting.

Falling under the moratorium are “billboards commonly referred to as ‘electronic message centers,’ ‘electronic message boards,’ ‘changeable electronic variable message signs,’ or any billboard containing LEDs, LCDs, plasma displays, or any similar technology to project an illuminated image that can be caused to move or change, or to appear to move or change, by a method other than physically removing and replacing the sign or its components, including by digital or electronic input.”

Outdoor Sign Ordinance: Public Hearing

Mayor John Hieftje indicated he thought it was highly likely that the vote would be postponed. This led to considerable hesitation on the part of several people who had planned to speak. If they assumed the council would postpone, expecting to be able to speak at the continued public hearing when the council took up the matter again, but the council wound up voting that evening, they’d have forfeited their opportunity to be heard before the vote.

Karolina Shillenn introduced herself as the real estate representative for Adams Outdoor. She told the council that Adams had three objectives that night. First, she asked that the council postpone the vote so that an opportunity could be provided to convey relevant information to the council, saying “Billboards are our business.” Second, she asked that the council maintain the current ordinance requirements, which cap the total number of billboards at 30. There are currently 28 billboards within the city, she pointed out. In addition, she asked that the council maintain the current 350-square-foot size limit. She showed the council an example of a current billboard for the Y, pointing out that it features a city planner on it. The third request she made was for the council to regulate digital signs at the 350-square-foot size, instead of prohibiting digital signs at that size.

Dan Law introduced himself as sales manager at Adams Outdoor. The business of Adams is all about helping local businesses and helping the local economy, he said. It’s difficult to reach customers when there is not a daily newspaper and the airwaves are overcrowded, he said. Billboards offer a nonintrusive way to reach people, he told the council. He takes his responsibility for managing eight account representatives very seriously. Based on what those reps tell him, there is a high demand for billboards and a high demand for digital. The current ordinance allows only 30 billboards, he pointed out. He asked that the council include in the new ordinance an ability for businesses to have a voice, via digital technology. He showed the council examples of billboards for the University of Michigan Credit Union and other local businesses.

Shannon Flowerday introduced herself as the art director at Adams Outdoor. She described the process of creating a visually appealing and successful billboard, comparing the process of design to creating a painting. She described the “rectangle campaign,” which is a way for nonprofits to advertise at no cost.

Dan Martell introduced himself as operations manager at Adams Outdoor. He talked about the physical implementation of the billboards. He described how a design for one advertiser had been printed on vinyl and it had not stretched properly. So Adams Outdoor had gone out several times to re-stretch the vinyl, he said. They were out working in all kinds of weather and were always monitoring the structures to make sure the lights are working and that the overall appearance is aesthetically pleasing.

Mitchell Gasche introduced himself as real estate manager at Adams Outdoor. He routinely deals with federal, state and local regulation, he said. Adams Outdoor encourages regulation, but is against prohibition. The proposed ordinance changes take away their rights, he said. While the current ordinance has a limit of 30 sign faces, and the limit has not been reached since 1994, there’s no need to take away the two additional billboards that could be allowed in addition to the existing 28 billboards.

He noted that digital technology for signs is regulated at the federal, state and local levels as well. Use of digital technology has been allowed at the federal level since 1996, he said, and prohibited flash, scroll or animation. He noted that Adams had sent to the council three studies on the possible distractions to drivers posed by digital signs. They’re safety neutral, he concluded. He asked that Adams Outdoor be included as part of the process. Two weeks is not long enough to deal with the proposed ordinance changes, he said. [The two-week timeframe is the time between the council's initial approval and the final vote, which was before the council at the April 1 meeting.]

Hieftje stated that the public hearing would be continued if the ordinance revision were to be postponed.

Outdoor Sign Ordinance: Council Deliberations

The council took an initial voice vote on postponement that appeared to have succeeded unanimously. But then a question arose about the date of the postponement. And that re-opened the door to deliberations on the question.

Jane Lumm (Ward 2) stated that she was not a big fan of billboards – digital or otherwise. She understands that it impacts sign businesses and has an indirect impact on businesses that use them. She supported the postponement, saying that although the city has had a year to review the issue during the period of the postponement, those who are impacted by the ordinance change had to deal with the issue in the timeframe of just two weeks. She wanted to make sure they had time to raise concerns before the final vote. A postponement also gives time to consider suggestions and consider revisions. She noted that it would be necessary to extend the temporary moratorium on digital signs. Lumm reiterated that she’s generally supportive of the ordinance revisions, but those who are impacted should have an opportunity to be heard.

Sally Petersen (Ward 2) also indicated she was in favor of postponement. She felt there’s a real economic development issue. She also felt there was a certain irony to prohibiting digital sign technology at the same time the city is trying to promote the idea of a tech campus downtown.

Marcia Higgins (Ward 4) was concerned that a two-week postponement is not the right timeline. She asked if councilmembers would consider a different timeframe. Chuck Warpehoski (Ward 5) indicated he might support a different timeframe, but he wanted to know what the mechanism would be for people to provide their input. Higgins stated that she felt the input would be provided to city staff.

After some back and forth – in light of the fact that the moratorium appeared on the agenda later in the meeting with an extension until July 1 – the council settled on May 6 as the date it would take up the sign ordinance again. That came over the dissent of Higgins, who appeared to be in favor of a longer postponement.

Outcome: The council voted to postpone the second vote on the ordinance revisions until May 6, 2013, over the dissent of Marcia Higgins (Ward 4).

Later in the meeting, the council voted to extend that moratorium on digital sign applications until July 1, 2013. According to the resolution approved by the council, the purpose of postponing a decision on the ordinance amendment and extending the moratorium was to allow for additional time to review the proposed amendments and to “gather input from the public and interested parties, and to promote the public health, safety, and welfare of city residents.”

Outdoor Sign Ordinance: Coda

During council communications time at the conclusion of the meeting, Chuck Warpehoski (Ward 5) indicated most of the signs were located in Ward 5, the ward he represents. Given the timeframe, he would likely not be able to see the process through himself – because his wife is due to give birth at the end of May. He indicated an interest in seeing the issue continue to receive attention from staff and the council.

Public Art Spending Moratorium

On the council’s April 1 agenda was the extension of a temporary halt to spending money that’s set aside under the city’s Percent for Art ordinance.

The city’s public art ordinance requires that 1% of all capital project budgets be set aside for public art. Originally set to run through April 1, 2013, the temporary halt on spending – except on projects already in the works – is to be extended until May 31. The three projects currently in the works are installations for East Stadium Bridges, a rain garden on Kingsley Street, and Argo Cascades.

The council had originally enacted the moratorium on spending at its Dec. 3, 2012 meeting. The action came in the context of a failed millage proposal in November 2012, which was meant to provide an alternative funding mechanism to the Percent for Art approach. The millage proposal was put forward in part in response to objections that voters had not explicitly approved the Percent for Art mechanism, which taps all capital funds – even those deriving from fees and millages designated for other purposes.

At the Dec. 3 meeting, a committee consisting of Sally Petersen (Ward 2), Sabra Briere (Ward 1), Stephen Kunselman (Ward 3), Margie Teall (Ward 4) and Christopher Taylor (Ward 3) was appointed to recommend amendments to the city’s public art ordinance.

The committee has met several times and has made recommendations on revisions to the ordinance. However, the committee is not yet ready to convey its final recommendations to the full council.

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

Another likely recommendation is to encourage an outside organization to solicit funds for specific community‐generated public art projects. Such funds would go into a dedicated fund for public art.

The committee is likely to recommend an increase in the employment level of its public art administrator to more than half-time – whether that is a contract employee or a direct hire. The current public art administrator’s job, held by Aaron Seagraves, is a part-time position.

The committee is also likely to recommend evaluating the changes in the ordinance after three years.

The extension of the moratorium was introduced to the council by Sabra Briere, who’s been working on the council committee. She reported that the city attorney’s office had told her it would take another 30 days, and the extension until May 31 was meant to ensure that there would be sufficient time for the two votes the council would be required to take.

Outcome: The council voted unanimously to approve extending the suspension of public art spending.

Gallup Park Accessibility Work

The council was asked to approve a $512,180 contract with Construction Solutions Inc. for improvements at the Gallup Park canoe livery.

The Ann Arbor park advisory commission had recommended the contract award at its March 19, 2013 meeting. The project budget includes a 10% construction contingency, bringing the total cost to $563,398.

Schematic of the proposed Gallup Park canoe livery improvements.

Construction Solutions, based in Ann Arbor, was the lowest qualified bidder on the project. Other bids were submitted by Braun Construction Group ($534,600); Detroit Contracting Inc. ($554,620); The E&L Construction Group ($580,700); A.R. Brower Company ($607,160); and Terra Firma Landscape ($612,137).

The improvements include barrier-free paths to the docks; barrier-free docks and fishing facilities; an expanded patio area to create barrier-free outdoor seating and to separate these areas from the pedestrian circulation; sliding glass doors from the meeting room; and redesign of the park entry to create a separation between the service drive and the pedestrian pathway.

The project will be funded in part through a $300,000 grant from the Michigan Dept. of Natural Resources Trust Fund, with matching funds from the FY 2013 park maintenance and capital improvements millage.

The project’s first phase will begin on the docks and livery area, with work continuing until Memorial Day in late May. Work will resume after the summer season on Labor Day, focusing on paths and the park entry reconfiguration. The entire project is expected to be finished by mid-November.

During the scant council deliberations, Sally Petersen (Ward 2) noted that the work had been very well received by the city’s disability commission – on which she serves.

Outcome: The council unanimously approved the contract for Gallup Park improvements.

Dam Work at Argo, Geddes

On the council’s agenda was the award of a $295,530 contract to Gerace Construction Co. for repair work and repainting at Argo and Geddes dams, as well as site improvements around Argo Dam.

The contract had been recommended for approval by the city’s park advisory commission (PAC) at its March 19, 2013 meeting.

Gerace, based in Midland, submitted the lowest of four qualified bids for this work. Other bidders were Anlaan Corp. ($354,050); E&L Construction ($457,989); and Spence Brothers ($797,000). According to a staff memo, the work entails “repair and repainting of gear housings, lift equipment, tainter gate structural steel, miscellaneous concrete repair, and minor site improvements. Site improvements include addition of riprap and constructing a path to portage around Argo Dam.”

At PAC’s meeting, Brian Steglitz, an engineer with the city, indicated that the work is being done in response to feedback from state regulators. The two dams are inspected every three years by the Michigan Dept. of Environmental Quality (MDEQ).

The project will be funded from the city’s parks maintenance and capital improvements millage.

At the council’s April 1 meeting, Mike Anglin (Ward 5) and Stephen Kunselman (Ward 3) questioned the idea of paying for the repairs only out of the parks millage, but were content to leave the question open for future discussion.

Outcome: The council unanimously approved the contract for the dam repairs.

Longshore Parking for Argo Livery

Having been postponed from its previous meeting on March 18, 2013, the council was asked to approve a $3,000 lease to accommodate overflow parking for the Argo canoe livery.

Sabra Briere (Ward 1) had asked that the item be separated out from the consent agenda on March 18. Briere had heard concerns that the lot is not very well-graded and that there’s a lot of runoff. She had wondered if there was a way for the city to enforce maintenance of the lot through the lease.

The lease had been recommended for approval by the city’s park advisory commission at its Feb. 26, 2013 meeting. The lease of the parking lot at 416 Longshore Drive – with about 40 spaces – will cover Saturdays, Sundays and holidays from May 25 to Sept. 2, 2013, with an option to renew administratively for two successive one-year periods.

City parks staff reported that the overflow parking at this lot had been used during the 2012 season, and they recommended continuing the lease. According to city records, the land is owned by the Stewardship Network.

At the council’s April 1 meeting, Briere indicated that it was not feasible to enforce through the contract the kind of improvements that would be necessary to manage stormwater better.

Outcome: The council unanimously approved the lease for the parking lot.

Summer 2013 Street, Sidewalk Contracts

The council was asked to approve a contract for street resurfacing in Ann Arbor – with Barrett Paving Materials Inc. in the amount of $3,583,944. The council has also approved two contracts in connection with the city’s 2013 ramp and sidewalk repair project – a $748,576 contract with Doan Construction Company and a $207,350 contract with Precision Concrete Cutting.

The work will occur in the spring and summer of 2013.

2013 Ann Arbor street resurfacing program.

The city has a ramp and sidewalk repair program in place that is meant to repair deficient sidewalks (not install new sidewalks) throughout the city over a five-year period – which is the duration of a 1/8 mill tax approved by voters in 2011. Each year about 20% of the city is covered by the repair program.

The contract with Precision Concrete Cutting reflects the city’s interest – where feasible – in slicing off portions of sidewalks that have “vaulted,” to restore the surface to horizontal. Slicing is more cost effective than removing and re-pouring.

The streets to be resurfaced include the following.

• State Street: Oakbrook to Eisenhower (April – June)
• Barton: Pontiac to Plymouth (August – October)
• Sorrento: King George to end (April – May)
• Alley “Benjamin”: Sybil to Benjamin (May – June)
• Alley “Mary”: Benjamin to Hoover (May – June)
• Franklin: Stadium to Hutchins (June – July)
• Hiscock: Brooks to Spring (June – July)
• Arbana: Mark Hannah to Huron (July – August)
• Mark Hannah: Arbana to Arbana (July – August)
• Waldenwood: Earhart to Penberton (July – August)
• Birch Hollow: Tacoma to Stone School (August – September)
• Penberton & adjacent courts: Waldenwood to Waldenwood (TBD)
• Sulgrave Place: Barrister to end (TBD)

According to the staff memo accompanying the agenda item, Depot Street (Main to Carey) was included as part of the original bid package. However, the storm sewer within Depot Street – based on early indications from the Allen Creek Railroad berm opening feasibility study – could be impacted by possible solutions related to a railroad berm opening. So other local streets will be substituted for Depot Street this year.

During council deliberations, Chuck Warpehoski (Ward 5) noted that some of the curb ramps on the work schedule were upgrades to existing ramps, when some locations didn’t have ramps at all. He wanted to weigh the benefit of that in the future.

Mike Anglin (Ward 5) reported that a woman had fallen on a sidewalk and cracked her knee. If there’s a lawsuit, he said, the sidewalks should be repaired immediately, even if it’s not the city’s fault.

Stephen Kunselman (Ward 3) got an explanation from city staff on the areas of work to be covered with the sidewalk work.

Outcome: The council voted unanimously to approve the street resurfacing and sidewalk repair contracts.

Drinking Water Bond Notice

The council was asked to approve the publication of a notice of intent to issue water supply system revenue bonds totaling $18.5 million to pay for additions and improvements to the city’s water supply system.

According to the staff memo accompanying the agenda item, the first in the series of bonds is expected to be for around $3.8 million and will be sold directly to the Michigan Finance Authority as part of its Drinking Water Revolving Fund program. The bonds will be paid solely from revenues to Ann Arbor’s drinking water system.

During the brief council deliberations, Mike Anglin (Ward 5) got some clarification on the interest rates from city CFO Tom Crawford. Crawford indicated that for a question about some maximums, he would need to talk to the city’s bond counsel.

Outcome: The council voted unanimously to approve the publication of a notice of intent to issue revenue bonds.

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: Library Lane Ice-Skating Rink

Stewart Gordon gave the council an update on the status of an initiative to install a temporary ice-skating rink on the top of the Library Lane underground parking garage on South Fifth Avenue. The rink would use synthetic ice. He reported that he’d done a long interview with the woman who runs the ice rink at the Hancock Building in Chicago. He summarized the information he’d obtained from that interview for the council. The material is durable and skateable. The size of the rink is very important, he said. Children like it but it’s too small for adults, he said. At the Hancock Building a liability waiver is signed, but no accidents or claims had been made in the course of three seasons.

Shoe storage is provided as well as a place to change into skates, Gordon reported. Sharpening skates is important, he noted, and the Hancock Building staff have been trained to do skate blade sharpening during slower periods. Negative features include the fact that the specific product that had been chosen in Chicago requires that a lubricating gel be applied twice a week. He described it as a “nasty, messy, hands-and-knees” process. Other products don’t require that kind of maintenance, because the lubricant is impregnated in the plastic, he said. So that’s the kind of product that would be used in Ann Arbor.

A final point he made is that unless it’s large enough to skate on comfortably, the rink becomes a one-time novelty. At this point, the city of Chicago has installed two ice rinks downtown – so the clientele for the synthetic ice rink is gradually declining. Gordon told the council that his group was ready to work with the city’s park advisory commission and the Ann Arbor Downtown Development Authority. [Gordon and Alan Haber had made a presentation on this project at the park advisory commission's March 19, 2013 meeting.]

Comm/Comm: Park Advisory Commission Update

Mike Anglin (Ward 5) urged people to watch the March 19, 2013 meeting of the city’s park advisory commission (PAC). [Anglin serves as one of two ex officio, non-voting city council appointees to PAC. The other council representative to PAC is Christopher Taylor (Ward 3).] He highlighted two presentations from city staff that were worth hearing: one on the city’s golf courses, and the other on the canoe liveries. Anglin expressed praise for the parks staff.

Chuck Warpehoski (Ward 5) followed up on Anglin’s remarks, adding praise of his own. He’d noticed some illegal dumping in a neighborhood park and notified park staff. They’d been responsive, he said.

Comm/Comm: North Main Task Force

During communications time, Sabra Briere (Ward 1) gave a brief update on the activities of the North Main/Huron River task force. The group has been meeting every three weeks as a whole, and has formed four subcommittees, which have met in addition to the full task force. The draft recommendations were presented at a meeting of the full task force on the previous Wednesday [March 27], she reported. The recommendations will now be compiled and organized and looked at again before a meeting on April 17. A draft reported is expected by the beginning of May. The group expects to hold a public meeting on May 22 and again in June. The full report is due by the end of July. She was pleased with cooperation that had been displayed during the task force’s work. She hoped the final report would reflect short-term and long-term recommendations to the council.

Comm/Comm: Unwanted Newspapers/Circulars

During communications time at the start of the meeting, Chuck Warpehoski (Ward 5) noted that a lot of people seem to complain about unwanted advertising circulars being delivered to their premises – like the AnnArbor.com Express. He ventured that council veterans around the table had likely heard this before. He asked them to “indulge a newbie.” [Warpehoski was first elected in November 2012.] He described the various aspects of the issue – from environmental concerns to public safety. A stack of such circulars that accumulate while someone is away could send the message “rob this place, nobody’s paying attention,” he said. He knew that city attorney has looked at the issue before. He asked other councilmembers to let him know what they’d been hearing about the issue. [An attempt to revise the city ordinance on handbills and unwanted newspapers put forward by Christopher Taylor (Ward 3) in late 2011 got little traction on the council.]

Comm/Comm: Urban Core Transit

Stephen Kunselman (Ward 3) reported that on March 28 there’d been a robust discussion of governance and financing for improved or expanded transit in the “urban core” communities – attended by a number of elected officials from Ypsilanti, Ypsilanti Township, Pittsfield Township, as well as several other nearby jurisdictions. The meeting was hosted by the Ann Arbor Transportation Authority. Kunselman wanted to let everybody know they were making some headway. Attending the meeting besides Kunselman from the Ann Arbor city council included: mayor John Hieftje; Chuck Warpehoski (Ward 5); Sabra Briere (Ward 1); and Sally Petersen (Ward 2). [See: "Costs, Services Floated for Urban Core Transit"]

Comm/Comm: Affordable Services

At the start of the meeting during public commentary reserved time, Thomas Partridge called on the council to fund affordable housing and transportation for those who need it – the most vulnerable among us. As Partridge often does, he called on mayor John Hieftje to step aside and resign or face future recall. On the day after the annual celebration of the most significant holiday in Christendom, Partridge said, it was time for us to unite as Christian Democrats for progress on issues the city has long neglected.

Partridge also addressed the council at the conclusion of the meeting.

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

Absent: Christopher Taylor.

Next council meeting: Monday, April 15, 2013 at 7 p.m. in the second-floor council chambers at city hall, 301 E. Huron. [Check Chronicle event listings to confirm date]

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

The resolution of intent specifies that the street repair millage will pay for the following activities: resurfacing or reconstruction of existing paved city streets and bridges, including on-street bicycle lanes and street intersections; construction of pedestrian refuge islands; reconstruction and construction of accessible street crossings and corner ramps; and preventive pavement maintenance (PPM) measures, including pavement crack sealing. [.pdf of unamended Oct 3, 2011 version of resolution of intent]

At the Oct. 3 meeting, councilmembers had questions about the need to have any resolution of intent, as well as the status of millage revenue use inside the geographic area of the Ann Arbor Downtown Development Authority. At the Oct. 17 meeting, Stephen Rapundalo (Ward 2) offered an amendment specifying that the millage amount levied inside the DDA district would be provided for the DDA to undertake the necessary repairs inside the district.

The resolution of intent had originally stipulated that sidewalk repairs inside the Ann Arbor DDA district would not be funded by the sidewalk repair millage, except when the sidewalks are adjacent to single- and two-family houses. A recent meeting of the DDA’s operations committee revealed a measure of discontent on the DDA’s part about the intended restriction inside the DDA district and the lack of communication from the city of Ann Arbor to the DDA about that issue.

Mike Anglin (Ward 5) and Stephen Kunselman (Ward 3) have stated in the course of their re-election campaigns that they only reluctantly support the sidewalk repair millage. Rapundalo has characterized the sidewalk millage as simply offering voters a choice. Though not up for re-election this year, mayor John Hieftje stated at the DDA’s Oct. 5 board meeting that he did not think councilmembers are out in the community saying that the city absolutely needs the sidewalk millage or that it’s essential. Like Rapundalo, the mayor characterizes the sidewalk millage as offering residents a choice of having the city take over the responsibility for sidewalk repair.

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]

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

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

Councilmembers had questions about the need to have any resolution of intent, as well as the status of millage revenue use inside the geographic area of the Ann Arbor Downtown Development Authority.

The resolution of intent would stipulate that sidewalk repairs inside the Ann Arbor DDA district will not be funded by the sidewalk repair millage, except when the sidewalks are adjacent to single- and two-family houses. A recent meeting of the DDA’s operations committee revealed a measure of discontent on the DDA’s part about the intended restriction inside the DDA district and the lack of communication from the city of Ann Arbor to the DDA about that issue.

The resolution states that both inside and outside the DDA district (otherwise put, throughout the city), the sidewalk repair millage would be used only to pay for sidewalk repair adjacent to property on which the city levies a property tax. One impact of that resolution of intent, if it’s adopted, is that the city’s sidewalk repair millage will not be used to pay for repairs to sidewalks adjacent to University of Michigan property.

This brief was filed shortly after the city council’s meeting concluded. A more detailed report will follow: [link]

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

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

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

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

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 proposed additional work will be done on: the outbound lane of Miller Avenue between Seventh Street and Chapin; on North Division Street between Ann and Detroit streets; and on Oxford Street between Hill Street and South University Avenue.

The work on Oxford Street could start either during the 2011 construction season or in 2012, depending on how talks go with the University of Michigan about the university’s contribution to the project.

Part of the approval authorized by the city council included $80,000 worth of crack-sealing work to be done yet this year on several different streets.

The city’s original contract with Barrett Paving Materials Inc. was for $3,710,953.

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]

As a separate proposal on the ballot, 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. Sidewalk repairs have up to now been the responsibility of property owners. The 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.

The survey reflects some resistance to the idea that an increase in taxes is warranted. From the free-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]

An amendment to the resolution approved by the council on Aug. 4 directs the city attorney to prepare a change to the city’s sidewalk ordinance relative to the obligation of property owners to maintain sidewalks adjacent to their property.

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]