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

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

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

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

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

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

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

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

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

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

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

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

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

Public Art Ordinance Revision

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

Public Art: Background

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

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

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

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

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

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

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

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

Public Art: Public Comment

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

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

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

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

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

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

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

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

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

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

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

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

Public Art: Communications from Council

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

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

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

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

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

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

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

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

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

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

Public Art: Council Deliberations

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Intent on Use of Street/Sidewalk Repair Tax

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

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

Use of Street/Sidewalk Repair Tax: Background

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

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

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

Use of Street/Sidewalk Repair Tax: Council Deliberations

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

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

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

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

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

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

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

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

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

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

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

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

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

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

RecycleBank Contract

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

RecycleBank Contract: Background

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

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

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

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

RecycleBank Contract: Public Comment

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

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

RecycleBank Contract: Council Deliberations

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Police Union Settlement

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

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

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

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

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

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

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

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

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

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

Federal Grant Application to Fund Police

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

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

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

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

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

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

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

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

Retirement System Revision

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

Retirement System: Background

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

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

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

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

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

Retirement System: Public Hearing

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

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

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

Land Sale to AATA

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

Land Sale to AATA: Background

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

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

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

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

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

Land Sale to AATA: Council Deliberations

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

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

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

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

Rezoning for Medical Marijuana

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

Rezoning for Med Marijuana: Background

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

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

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

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

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

Rezoning for Medical Marijuana: Public Comment

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

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

Rezoning for Medical Marijuana: Council Deliberations

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

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

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

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

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

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

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

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

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

Nominations/Appointments: Medical Marijuana

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

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

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

Systematic Annexations from Townships to City

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

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

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

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

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

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

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

Dexter Avenue Special Sidewalk Assessment

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

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

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

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

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

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

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

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

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

Tax Abatements: Picometrix, Arbor Networks

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

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

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

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

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

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

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

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

Property Assessed Clean Energy (PACE) Program

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

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

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

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

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

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

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

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

Same-Sex Benefits

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

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

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

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

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

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

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

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

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

Cleaning Contract

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

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

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

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

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

Thank You to Interim City Administrator

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

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

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

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

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

Local Development Finance Authority (LDFA) Board Membership

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

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

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

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

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

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

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

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

Leaf Trucks

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

Steve Powers, Ann Arbor city administrator.

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

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

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

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

Communications and Comment

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

Comm/Comm: City Council Liaison to Housing Commission

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

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

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

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

Comm/Comm: Welcome to New Administrator

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

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

Comm/Comm: Video Surveillance Ordinance

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

Comm/Comm: Audit Committee

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

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

Comm/Comm: A2OpenBook

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

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

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

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

Comm/Comm: Public Speaking Time

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

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

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

Comm/Comm: Sidewalks, Line-of-Sight

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

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

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

Comm/Comm: Recall Snyder

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

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

Comm/Comm: Energy Farms

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

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

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

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Getting approval for its request for a tax abatement was Picometrix LLC, located at 2925 Boardwalk in Ann Arbor. Picometrix is a supplier of high-speed optical receivers.

The 5-year abatement would apply to $2,434,882 worth of personal property that Picometrix is acquiring. From the application for abatement: “Due to the projected increase in production volume, the company will need to purchase assets to maximize production and support added staffing.”

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

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

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

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]