Mayor John Hieftje at the April 15 Ann Arbor city council meeting. (Photos by the writer.)

Conversation amongst audience members at the meeting – as well as subsequently in the community – described the effort as a “citizens filibuster.” The result of all the commentary: Two significant items on the agenda were postponed until the council’s May 6 meeting.

One of those items was the site plan approval for 413 E. Huron. Postponement of a decision on that project was lumped in with the general motion to postpone all remaining action items on the agenda until May 6. It was not necessarily expected that the council would postpone the 413 E. Huron site plan that evening, even if it was hoped by opponents that councilmembers would put off the decision – for a third time.

But there was a reasonable expectation that another significant item would be postponed – the council’s final action on a proposed revision to the city ordinance governing the Ann Arbor Downtown Development Authority. It was during the often acrimonious debate on that decision that the council ultimately opted to postpone all of its remaining action items until May 6.

The acrimony stemmed in part from the fact that the stated intention of Stephen Kunselman (Ward 3) at the start of the meeting was to postpone a final decision – and that was the expected outcome. The fact that this expected outcome was called into question heightened the tension in an already emotional debate. The tension was heightened by the fact that deviation from the anticipated postponement was made possible mainly by the absence of two councilmembers – Marcia Higgins (Ward 4) and Sumi Kailasapathy (Ward 1).

By the time the council reached the DDA ordinance on its agenda, the hour was approaching 2 a.m. And by then Higgins and Kailasapathy had needed to leave the council meeting. Both of them had supported the ordinance changes in the 7-3 vote taken at the council’s April 1, 2013 meeting. But for the final reading on April 15, neither of them were at the table when the debate on the DDA ordinance began.

Kailasapathy described herself to The Chronicle as on the verge of physical exhaustion when she left – having had little sleep over the several days leading up to the meeting. She earns her livelihood as a certified public accountant, and tax season is a time of peak workload.

So apparently recognizing that the absence of Kailasapathy and Higgins would mean defeat for the ordinance change – if it were voted up or down, instead of being postponed – mayor John Hieftje led an effort to force an up-or-down vote on the issue. And councilmembers who were willing to put off the issue were not unified in their view about the parliamentary procedure to use to achieve that delay. So the council voted on two different options – postponing until a date certain (June 17) or tabling the issue. Sabra Briere (Ward 1) provided a crucial vote against postponement, but voted in favor of tabling.

Kunselman argued for the postponement by pointing out that because the sequence of the roll-call vote that evening allowed him to vote last, he could simply assess how the tally stood, and vote accordingly with the prevailing side. That would give him the right to bring back the vote for reconsideration at the council’s subsequent meeting. But Kunselman’s argument was not persuasive to a six-vote majority.

Without a six-vote majority in favor of either tabling or postponing, the council was left to deliberate on the actual ordinance amendments. As some attempted amendments failed – clearly due to the dynamic that had resulted from the absence of two councilmembers – Chuck Warpehoski (Ward 5) eventually proposed adjourning the meeting until the following Monday, when the meeting could continue. However, after a brief recess it was decided that the council would simply postpone all remaining voting items until its May 6 meeting, and put an end to the April 15 meeting.

After approving the motion to postpone the action items, councilmembers ticked through the remaining “housekeeping” items on the agenda, which largely included various reports and communications. Of those, one highlight worth noting was the nomination by Hieftje of Eric Mahler to replace David Nacht on the board of the Ann Arbor Transportation Authority.

The public commentary at the April 15 meeting exceeds The Chronicle’s capacity to report in its customary way. Still, some accounting of the meeting is important for the archives.

This report provides: (1) a summary of votes taken; and (2) a summary of actions that will now appear on the May 6 agenda as a result of the April 15 postponement. In addition, this report begins with details of the deliberations on the proposed DDA ordinance revisions.

DDA Ordinance Revisions

During the April 15 meeting, the council undertook some amendments to the proposed ordinance revisions governing the Ann Arbor Downtown Development Authority. [.pdf of DDA ordinance as it will appear on the council's May 6, 2013 agenda] Background is presented first, followed by details of the deliberations.

DDA Ordinance Revisions: Background

Several revisions to Chapter 7, a city ordinance governing the Ann Arbor DDA, had received an initial approval by the city council at its April 1, 2013 meeting. The revisions would result in roughly $500,000 in additional annual revenue for the city of Ann Arbor – compared to what it would receive under the DDA’s current interpretation of the ordinance.

The revisions ultimately postponed by the council on April 15 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, the revisions to Chapter 7 that have received initial approval by the council included: 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.

More significantly, the changes include revisions to Chapter 7 that would clarify how the DDA’s TIF tax capture is calculated. While the interpretation of the language is disputed, it’s generally acknowledged that the ordinance language doesn’t provide explicit and clear guidance on the calculations.

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.

The ordinance revisions 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 in the neighborhood of $300,000 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 – would be around $70,000 according to one projection.

However, the total increment in the district on which TIF is computed has shown 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 $500,000, of which about $300,000 would go into the general fund. The city’s general fund includes the transit millage, so about $60,000 of that would be passed through to the Ann Arbor Transportation Authority.

The amount of TIF capture that’s returned to the other taxing jurisdictions is tied to growth in the valuation by the Chapter 7 language. 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 redistributed 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.

In 2011, the DDA used a year-to-year interpretation of the Chapter 7 language instead of computing rate of growth against the base year in a cumulative fashion. That is a point that the Chapter 7 revisions would clarify.

Before giving initial approval on April 1, but postponing its vote on April 15, the council had previously postponed voting at its March 18, 2013 and March 4, 2013 meetings.

DDA Ordinance Revisions: Financial Impact

Some of the discussion has focused on what the impact of the ordinance clarifications would be on the DDA’s finances. Chart 1 below summarizes the impact. As amended at the April 15, 2013 meeting, the impact of the clarification would not be felt until FY 2015. From FY 2015 forward, the difference between the revenue planned for by the DDA (red) and that provided by the calculations made explicit in the ordinance revisions (blue) is minimal. What’s at stake is the TIF revenue level for which the DDA has not been planning – shown by the yellow line. That level of revenue has resulted from recent new construction in the downtown area.

Chart 1: Impact on DDA finances compared to DDA 10-year planning document. Data from city and DDA sources, chart by The Chronicle.

[.pdf of DDA 10-year planning document]

DDA Ordinance Revisions: Initial Communications

During the initial slot on the agenda set aside for communications from councilmembers, Stephen Kunselman (Ward 3) indicated he would be asking his colleagues for postponement of the vote regarding changes to the DDA ordinance. His remarks came about an hour into the meeting. He said the reason he was asking for the postponement was that after the council’s initial approval of the ordinance changes on April 1, there had been a lot of misrepresentation about what the changes meant.

There had also been political intimidation, Kunselman said, and “outright character assassination” of those councilmembers who had been trying to work hard to bring clarity to the DDA TIF calculation process. “I’ve always intended that the DDA budget be maintained whole,” he said, so that the DDA could still meet existing obligations. During the deliberations on that initial vote, he pointed out, the threat had been heard that the DDA board might rescind its resolution that granted $8 million to the city of Ann Arbor – paid in installments of roughly a half million dollars each year – for the new police courts building/Justice Center.

There had also been reports in the press, Kunselman stated, that DDA board treasurer Roger Hewitt had indicated there would be no “sacred cows” when it came to the DDA’s reevaluation of its budget. Kunselman said he had interpreted Hewitt’s remarks as a threat. Kunselman then implicitly introduced the issue of a possible conflict of interest on the part of Chuck Warpehoski (Ward 5), whose wife Nancy Shore is director of the Ann Arbor Transportation Authority’s getDowntown program.

Because the DDA funds the getDowntown program, the last thing Kunselman would want to have on his hands, he contended, was cutting that program – when a council colleague’s spouse could lose her job. And he knew that would happen if funding from the DDA to the getDowntown program were cut off – because he had spoken with Michael Ford, CEO of the Ann Arbor Transportation Authority, about that. According to Kunselman, Ford had assured him that if the DDA funding were to be cut, then Shore’s position would have to be cut as well. That had never been Kunselman’s intent, he said.

By way of background, The Chronicle had previously inquired about the getDowntown program budget and its funding sources. Based on information provided by AATA to The Chronicle, it appears that the federal funding component of the getDowntown budget exceeds the salary and benefits paid to Shore. [.pdf of 5-year getDowntown budget numbers] Based on Kunselman’s remarks, The Chronicle emailed Ford during the April 15 meeting and received a reply:

I recall the question being the funding for the program [federal] CMAQ funding which supports elements of the program and funding for employee positions – I don’t recall the specific question of just DDA funding impacting employee positions.

AATA director of communications Mary Stasiak had previously told The Chronicle in a phone interview that the existence of Shore’s position was not contingent on the existence of getDowntown’s go!pass program – which is where the bulk of the roughly $600,000 worth of funding from the DDA goes. And she’d explicitly said that Shore’s position was not contingent on the DDA’s funding of the getDowntown program.

From left: Councilmembers Christopher Taylor (Ward 3) and Stephen Kunselman (Ward 3).

Kunselman said he had also heard a lot of talk about a desire for collaboration. “I am willing to try to collaborate,” he stated. And that is why he wanted the postponement, he said. He wanted a chance to reach out to the DDA’s treasurer and to the mayor to find out if there’s something that could be done to address the TIF capture methodology. On Jan. 27, 2012 – over a year ago – Kunselman continued, mayor John Hieftje had received from the executive director the Ann Arbor District Library, Josie Parker, a letter that as far as Kunselman knew had never received a written response from Hieftje.

Kunselman read aloud the closing paragraph from the letter: “Based on the city’s recognition that its own ordinance requires excess TIF to be distributed to the taxing authorities, the library fully expects that it will continue to receive TIF refunds in the future. From this point forward, however, the library would ask for consultation with the city so that a calculation method can be agreed upon before any refund checks are issued.”

The purpose of this exercise, Kunselman said, was to bring some responsibility back. So he would be asking for a postponement when the council reached that item on the agenda, he concluded.

Five and a half hours later the council reached the DDA ordinance on its agenda.

DDA Ordinance Revisions: Deliberations – Postponement

Kunselman led off discussion by re-iterating his desire to see the second and final vote on the question postponed. He asked that the postponement be until the council’s second meeting in June, which falls on June 17. Kunselman indicated that he had already spoken with DDA board treasurer Roger Hewitt about meeting and discussing with him some of the issues that had been raised by the DDA and the community. “I hope that you can indulge… the fact that we are looking for a postponement,” he said. Kunselman’s motion to postpone was seconded by Sally Petersen (Ward 2).

Margie Teall (Ward 4) indicated that she would not be supporting a postponement that evening – because she did not support the ordinance revision as it was brought forward. She appreciated that Kunselman would like time to work on the question, and to start in a more collaborative manner. But she felt that the current draft before the council needed to be voted down. She pointed out that around 50 people had appeared before the council that evening to speak.

Teall allowed that there was concern and confusion about the nature of the TIF calculation, which she allowed probably does need to be examined, to clarify it. She felt that it would best be addressed, however, by the city administrator, the chief financial officer, and the DDA staff working together to bring recommendations forward to the council. She had an alternative resolution prepared, which she indicated she was prepared to pass around. But she would not support a postponement because she wanted the question to be voted on that night.

Sally Petersen (Ward 2) indicated she would support the postponement. She liked the spirit of collaboration that Kunselman was bringing forward in connection with the postponement. The council had heard a lot about the value that the DDA offers to the downtown area, she said, and about the DDA’s contribution to the support of affordable housing. She did not feel that any of that was in question in connection with the changes to the ordinance.

In the short term, Petersen allowed that there was “a little bit of a hit” to the DDA. But in the long term, she said, there would be an uptick in the DDA’s fund balance as a result of the ordinance amendments. She noted that there have been a lot of spreadsheets floating around in the last several weeks, and lots of versions of the DDA’s 10-year planning document that she has seen. The postponement would give everyone a chance to really take a look at the numbers, and what it means to the bottom line for the DDA. She was not convinced that there was a uniform understanding across the council of the impact of the ordinance changes on the DDA’s budget planning. That really needs to be clearly understood, she stressed. So for that reason she supported the postponement.

Jane Lumm (Ward 2) indicated that she would support the postponement as well. She thanked the city’s chief financial officer Tom Crawford, who had provided some very helpful spreadsheets, she said. She described one of the pages that had been provided as particularly helpful – which lays out the impacts on the DDA’s revenues over the next 10 years. She felt there had been a lot of confusion about the actual financial impact of the ordinance changes on the DDA. The community, she felt, needed some time to absorb the same information the city council had been provided. She felt the added time would be helpful in that regard.

Mayor John Hieftje indicated he would not support the postponement. “I think this was bad legislation from the day it was proposed,” he stated. He reiterated his view that he thinks that the ordinance amendments represent a threat to the city’s general fund. He claimed that he could show that over and over again. The work that the DDA does is very vital, he said. He added that “we have caught the DDA with this at exactly the wrong time,” and contended that the DDA had anticipated an increase in TIF revenue.

The DDA had spent down its fund balances for the largest projects if it had ever undertaken, Hieftje continued, and he did not know why the council would continue down the road with something that could be harmful to the city’s general fund and to the city’s ability to put police officers on the street. He also contended that light posts on Main Street were falling over when the wind blows, and that the project to replace those light posts might be delayed if these ordinance amendments were undertaken. “It’s almost as if we’re trying to punish the DDA for excellence …, ” he contended.

Margie Teall (Ward 4). In the background is Marcia Higgins (Ward 4).

Teall expressed her view that she did not think that clarity of the ordinance language could be achieved within the timeframe of the postponement. CFO Crawford took the podium to respond to Teall’s questions. When the council’s audit committee had met, Teall said, committee members had discussed the TIF calculations. As Crawford stood at the podium, she told him that at the audit committee meeting he had expressed the view that there needed to be an overhaul, or a look at the TIF calculations.

Teall asked Crawford if there was any confusion about how the TIF is to be calculated. Crawford allowed that he did not actually remember the specific conversation to which Teall had alluded – because there had been so many conversations on the topic. He did feel that the existing ordinance language is not clear. He expressed the view that the DDA has the ability and the right to interpret the ordinance language. The fact that there are so many questions about it is something that staff and the DDA are trying to work through, he said. “I’m not sure what I can say to help.” Crawford alluded to the last spreadsheet that Lumm had mentioned, saying he felt it addressed some of the areas that had previously been confusing.

Crawford noted that there is an interest in trying to understand the impact to the DDA. But he stressed that it’s important to understand the basis from which that impact is measured. Is the impact measured against the DDA’s assumed 10-year planning document, or is it measured against the new projections that the city has now? Crawford indicated that he’d attempted to flesh all that out in the last spreadsheet, which was as close as it comes to achieving clarity, he said, based on the questions that staff had been hearing.

Teall asked Crawford if he thought it would help if there were more clarity in the language. Crawford hoped that regardless of what the council’s decision is, at some point some clarity in the language can be achieved. Teall indicated that she didn’t think if the question came back to the council in June that clarity would exist.

Chuck Warpehoski (Ward 5) asked Kunselman directly if Kunselman’s intention was to bring the ordinance back in substantially the same form, or if he imagined through the collaborative process that there would be significant revisions to the proposed ordinance. Kunselman indicated that he was open to significant revisions – whatever it took to make sure that clarity is achieved. Kunselman felt that everyone was trying to reach clarity, which he said had been his original intent from “the get-go.”

Kunselman found it interesting that there is now interest in clarity from those who had opposed the effort initially, and who had called it bad legislation. He’d been working with the city staff to provide clarity to the language on the TIF calculation. “Are there other ways of doing it? I’m sure there are. Am I open to them? I very much am so.”

If the collaborative effort – among Hieftje and the DDA board treasurer and the city staff – results in significant revisions to the ordinance language, then those would come back at the second meeting in June, Kunselman said. But if that can’t be achieved by the second meeting in June, then the intent would be to postpone again, he said. He wanted to get the clarity that’s necessary so that everyone can understand the TIF calculations. And he allowed that could result in a need to restart the ordinance amendment process by introducing the revisions at first reading.

If the result was a first reading at the second meeting in June, Warpehoski wondered what the advantage would be of doing that. Warpehoski’s implication seemed to be that the council could vote down the ordinance revisions that night and start from scratch with a new first reading at the second meeting in June – if sufficient clarity had been achieved at that point.

Kunselman responded by saying that it was possible that the proposed amendments as they currently stood already did a pretty good job of achieving the kind of clarity that was sought. Kunselman pointed out that of all the speakers during the public hearing, no one had actually talked about the language of the TIF calculation and the council’s effort to keep the DDA’s budget whole. “It’s like nobody actually read the draft language” that was given initial approval by the council, Kunselman said. For all we know, Kunselman ventured, that could be the clearest language available.

Sabra Briere (Ward 1) asked Kunselman if he would consider a tabling instead of a postponement until a date certain. “It’s not that I don’t want this brought back up off the table,” she contended. She noted that she and Kunselman had talked about the need to achieve some clarity on the financial issues. She was not certain that clarity had yet been achieved. She had talked with city staff about some ideas to make her more secure in the clarity of the language. She did not feel she could even discuss it effectively that night.

From left: Sumi Kailasapathy (Ward 1), Sabra Briere (Ward 1) and Sally Petersen (Ward 2). Kailasapathy had to leave the meeting before it concluded.

Briere ventured that it might not be useful to tie things to a tight timeline – saying that it might require six months. She told Kunselman she did not think that he would necessarily need six months, but that’s the maximum time for which an issue can be tabled, she pointed out. She wanted to see that the collaborative effort was not tied to a rigid timeline – especially during the month of May [when the council is focused on approving the budget for the next fiscal year]. She did not figure that people would have a lot of flexibility during the month of May. Kunselman told her that he was not interested in tabling for six months.

At that point Kunselman laid out the parliamentary options, in an effort to encourage his colleagues to postpone the question, as he had asked. He pointed out that he could simply vote with the affirmative side and bring the question back for reconsideration at the next meeting. He noted that the council was, at that point in the evening, missing a couple of councilmembers who would be likely to be supportive of the postponement. Kunselman characterized the choices as “playing games” or just postponing. He confirmed with city clerk Jackie Beaudry that Kunselman was last in the roll-call sequence that night. [The roll call starts with a different councilmember each meeting, rotating around the table.] “All’s I’m asking for is a postponement until the second meeting in June,” Kunselman concluded.

Mike Anglin (Ward 5) indicated that in the brief conversations he’d had with members of the DDA board, they were willing to engage in further discussion. And that was exactly what Kunselman had been intending, Anglin said. He pointed out that the initial vote of the council on the question had been 7-3 in favor of having the matter go forward for discussion. He felt that postponing is exactly what the council should be doing. It was never a proposal that was meant to hurt the DDA, he said. Everyone at the table at the previous meeting had praised the work of the DDA, but they wanted further clarifications.

Christopher Taylor (Ward 3) noted that he hadn’t attended the previous council meeting. So he contented he was not fully apprised of what was said, or how it was said. But he ventured that, “If an earnest and polite conversation was intended, then that is what would have been requested.” He was happy that the council was moving in that direction. He allowed that Kunselman had raised a proper procedural point about voting last and being able to vote in the affirmative, putting Kunselman in a position to bring back the vote for reconsideration at the next meeting.

Still, Taylor felt that tabling was a more proper thing to do in this context. He agreed with Briere that the effort would require a conversation that would extend beyond the council’s second meeting in June. He felt the conversation should move the end result far away from the one that’s in the current resolution.

Taylor allowed that the resolution in front of the council would not be the “death knell of the DDA.” But he claimed it would “do harm and violence to the long-term plans of what I think has been demonstrated here to be a organization that is not broken and not in need of fixing.” He called the DDA an excellent steward of the downtown and the city’s collective resources. “They’re a credit to us all, and they do great work,” he said. On the postponement, he felt that a tabling would be best.

Warpehoski noted that Kunselman had expressed a desire not to play games. He hoped that what comes back in June would be significantly different from what is currently proposed and a fresh start can be achieved. He did not feel that arguing about tabling versus postponement was a good thing to be doing at 2 a.m. So Warpehoski supported a postponement to a date certain, to just keep it moving. He hoped that a different proposal would come back with language that did a better job with the governance and financing aspects. And if it did not, Warpehoski indicated he would be ready with amendments to try to put forward his vision.

DDA Ordinance Revisions: Postponement – Politics

Hieftje weighed in again: “Frankly, and since we’re being frank, I think that this started out with a very large political component.” So Hieftje wanted to postpone the question out beyond the council primary election date. [This year, the primary will be held on Aug. 6.] That would remove some of the political component, Hieftje contended. That way, good policy to be made without individual councilmember’s political goals being included, he said.

Hieftje felt that a postponement leaves an organization hanging that has been a very strong partner to the city. The last 10 or 12 years had been the worst in history since the last Great Depression, Hieftje said. Many cities across the state and across the nation had raised taxes to cope with it, he said, but the city of Ann Arbor has a millage rate that today is slightly less than it was back in the year 2000. When the city went to the DDA and wanted to renegotiate the parking agreement, the DDA did not have to do that, Hieftje said.

The DDA is a freestanding organization, he said, quickly adding that he had always maintained that the DDA is an “arm of the city.”

The DDA had “stepped up to the table” and renegotiated the contract under which the DDA manages the public parking system, Hieftje said. Now there is over $3 million a year that comes back to the city under terms of the parking contract, he noted. When the city was told by the Washtenaw County government that the city needed to move the 15th District Court out of the county courthouse, the DDA was there, and had granted the city $508,000 a year.

Hieftje did not want to keep the DDA “on the hook and hanging.” He thinks the process should have started out with a conversation with the DDA. “How come we didn’t want to do that to begin with?” Hieftje characterized the proposed ordinance revision as a “command-and-control” approach that he wanted to get off the table. Hieftje said he wanted to go back and have a sober conversation with the DDA.

Jane Lumm (Ward 2) then responded to Hieftje’s remarks:

I wasn’t going to go here but you sort of forced this issue, Mr. Mayor. Councilmember Kunselman has raised these issues for as long as I’ve been around. And you all know that. To suggest that they are simply politically motivated as you did at the last meeting, Mr. Mayor, does no credit to you or your role. You tried that with me once as well, and I think you would be better served to simply argue the merits of your position rather than attempt to personally discredit those who may occasionally disagree with you. I think it’s unfortunate that the rhetoric has risen to such an uncivil level, with personal insults and accusations. And frankly it appears that if any councilmember who has a view that may be different from the status quo, then it is either ‘politically motivated’ or ‘ill-informed.’ Perhaps there may be a different view, a different sense of priorities. I wish we could recognize and honor that reality in a much more civil manner on the council and as a community.

Lumm also pointed out that there were two councilmembers absent because they had to go to work in a few hours – so it was understandable why they needed to leave the meeting earlier. Lumm thought the council owed it to Marcia Higgins (Ward 4) and Sumi Kailasapathy (Ward 1) to give them an opportunity to vote on this.

On the question of postponement versus tabling, Lumm didn’t support tabling. “That’s basically shelving it,” she said. She pointed to the stack of written materials in front of her, saying that half of the notebooks were Q&As the council has received back from the staff. “We have flogged this thing,” Lumm said. And there has been a lot of interaction with the DDA. Lumm said, “We all know that this is not the catastrophic neutering of the DDA that is being portrayed.”

Lumm called herself a staunch supporter of the DDA – but she stressed that what she supported was an independent DDA. The ordinance change would help clarify the question about the TIF refund, Lumm said. It clearly needs to be clarified. So she didn’t understand the logic behind tabling it. Lumm appreciated that the postponement had been proposed for the second meeting in June and she thought that was fair, and so she would be supporting it.

Kunselman noted that the council had received the city administrator’s budget presentation that evening. So the council would be adopting the city budget with the DDA’s budget as a component unit of that budget – without changing it. No one is talking about changing the DDA budget for fiscal year 2014, Kunselman said. The reason he wanted to try to pursue action by the second meeting in June is that it’s the end of the fiscal year and the tax bills start going out. It’s his hope that as the tax bills go out, there would be new language about the TIF capture methodology. But he stressed that the city council would not be amending the DDA budget, regardless of what the ordinance revisions might be. The intent has never been to cut the DDA’s budget or to put the DDA in a position where the DDA has to cut programs. Kunselman pointed out that what’s at stake are new additional tax dollars.

Kunselman agreed with Lumm that the “scare talk” that Hieftje had used was not well-founded. Kunselman was willing to put some of the other things aside – an apparent allusion to the governance issues in the ordinance – in order to focus on the TIF capture methodology.

Kunselman addressed Hieftje directly, telling him that the Ann Arbor District Library had sent a letter to Hieftje, but Kunselman had not heard that Hieftje ever responded to it. Kunselman said he’d been criticized because he was standing up and trying to help out the library – which has a budget of roughly $12 million compared to the DDA’s budget of over $20 million. Who cares about the library? he asked, adding that he did. The library is an institution of our community, he said, but he thought the library’s thoughts on the issue are being squashed.

The idea that the city and the DDA don’t care what the library thinks and that the TIF capture will be calculated in accordance with whatever is best in the judgment of the DDA and the mayor shows arrogance, Kunselman said.

Kunselman observed the late hour and pled for a postponement. “It’s not about playing politics,” he stated, but “we can make it that way, if you want to keep talking about it that way.” Kunselman noted that he’d explicitly asked for collaboration. Kunselman contended that the interest in collaboration now on the part of opponents of the ordinance revisions would not have been shown, if the council hadn’t actually voted for the ordinance changes at first reading. The reason it had reached this point, Kunselman said, is that Hieftje had not addressed the issue for over a year: “And now you’re complaining about the fact we got a first reading?”

Kunselman returned to the parliamentary point about being in a position to assess the vote tally and vote with the prevailing side, giving him the opportunity to bring back the question for reconsideration at the next council meeting: “I’m the last vote. If you want to play the game, we can do that. … Or we can be kind and considerate at two o’clock in the morning and just please vote unanimously, and we’ll postpone it until the second meeting in June.”

Kunselman continued by saying that he would not push for a vote up or down at the second meeting in June, if there was not sufficient clarity in the language. “And you have my word that if we don’t have the language, … [I won’t] force a vote up or down in order to score political points. That’s not my intent. That’s exactly why I didn’t want to force the vote tonight.” He didn’t want to force the vote before the filing deadline for council candidates, he said, because the potential existed to create candidates based on that vote. [The filing deadline for the primary election is May 14.]

Kunselman said he did not want political intimidation – because that doesn’t yield good public policy. This is about public policy, not about scoring points, he said. “If you want to make it that way, then that seems how you want it to be. I’m sitting here taking the heat, taking the character assassination … I’m not going to back down just because you don’t want to be nice.”

DDA Ordinance Revisions: Postponement – Calling the Question

Warpehoski appeared to attempt to strike balance by noting that there are both public policy and political issues at play. “Let’s be honest about that,” he said, “It’s being played on all sides.”

Chuck Warpehoski (Ward 5).

Warpehoski believed that Kunselman had serious policy issues that he was pursuing honestly. But Kunselman had also had been quoted in the media as saying that it was 100% political and that councilmembers were all politicians and that people who supported his opponents need to understand that there are consequences for their actions.

But Warpehoski also noted that it was 2 a.m. He then “called the question” – a parliamentary move that is intended to end debate. Warpehoski pointed out that it was not a debatable motion and required a super-majority to pass. As some councilmembers sought clarification about the effect of Warpehoski’s motion, he said: “I’m saying let’s shut up and vote on … postponement.”

Outcome: The vote on calling the question was deemed to have failed, with Hieftje and Taylor voting against it. Higgins and Kailasapathy were absent.

The motion was deemed to have failed because it did not have eight votes, which is the number typically associated with a “super-majority” of the council. However, the council rules make a motion to call the question contingent on a 3/4 majority of those present, not of those members serving:

A motion to call the previous question (call for cloture) immediately ends all discussion and shall be out of order until all members have had an opportunity to speak twice to the question on the floor, and shall require a concurring vote of 3/4 of the members present.

On a vote of 7-2, Warpehoski’s motion to call to the question should have succeeded, and the council should have voted on the postponement at that point.

DDA Ordinance Revisions: Postponement – More Deliberations

Discussion continued on the postponement of the question until June 17. Hieftje asked if the council would consider postponement until Sept. 30. Between tabling and a postponement until Sept. 30, Hieftje indicated he supported postponement until Sept. 30. He noted that the conversations between the city and the DDA about the new parking contract had taken a year.

Speaking to Kunselman, Hieftje began: “If you really want to have a conversation, if it’s genuine this time, if you want to actually collaborate with the DDA… ” then Hieftje felt that Sept. 30 was a date that would be appropriate. Kunselman responding by reiterating his desire to have clarity before the tax bills go out. The money will get dispersed, he said, and if the DDA receives it, then the city may never get it back. So the purpose is to try to get it done.

“We’re talking some very simple language from everything I understand,” Kunselman said. Given the two months he was asking for, Kunselman ventured that it would be possible to work something out. “You have my word: If we don’t have it worked out by the end of June, I will not request or force a vote on a second reading.”

Briere admitted that Kunselman’s idea about what happens at the beginning of the fiscal year and disbursement of taxes left her confused. She asked for some explanation of what exactly happens with the summer taxes. Crawford indicated that taxes are levied and collected – which means the treasurer collects all the money and settles with the county to make sure that everything is correct, and then the funds are distributed to the various entities. He confirmed for Briere that it’s the FY 2014 taxes that are being collected. The fiscal year begins July 1.

Some back-and-forth between Crawford and Briere established that the city’s role in dispersing TIF money to the DDA would stay the same, regardless of any ordinance change. An ordinance change could affect how the DDA calculates a possible refund, however. Crawford told Briere he would have to double-check to see if an August change in the ordinance could affect July distributions. He thought that as long as you stay within the fiscal year, a change can be made.

Outcome: The final tally on the postponement was 4-5 in favor. Voting no were Teall, Hieftje, Briere, and Taylor. Voting yes were Warpehoski, Anglin, Petersen and Lumm. Voting last was Kunselman, who counted the tally at 4-4 and voted no so that he would be on the prevailing side. This put him in a position to bring back the vote for reconsideration at the council’s next meeting, on May 6.

DDA Ordinance Revisions: Tabling

With the motion to postpone having failed, Briere moved to table the item. And she asked the city administrator, the mayor, Kunselman, the city’s CFO, and the DDA representatives to begin meeting. It’s a double motion, she allowed, but she was doing it because it was in the interest of time.

Hieftje invited further discussion on the tabling. There was none. [Under Robert’s rules, a motion to table is in any case not supposed to be subject to debate.]

Outcome: The motion to table failed on a 5-4 vote – because it did not have a six-vote majority. Voting for tabling were Teall, Warpehoski, Hieftje, Briere and Taylor. Voting against tabling were: Anglin, Petersen, Lumm and Kunselman.

At that point Lumm got clarification that the council would in fact be voting on the issue that night.

DDA Ordinance Revisions: Amendment – Delayed Enactment

Petersen then proposed a possible amendment to the ordinance. She proposed that the clarification of the calculations would be enacted starting in fiscal year 2015 instead of fiscal year 2014, as originally called for. The benefit, she said, is that it would be consistent with the other timing issues that are mentioned in connection with implementing the DDA board governance changes. From a financial perspective, it would also eliminate the impact of the ordinance clarification’s $363,000 shortfall to the DDA in FY 2014. After that, Petersen, said, the shortfalls were, in her mind, minimal and actually became windfalls.

Teall responded to Petersen’s proposed amendment by questioning why the postponement Petersen had voted for could not have been proposed for longer – past the second meeting in June. She wondered why the ordinance revision couldn’t be postponed until next fall. Petersen replied that the postponement had been voted down. Petersen also indicated that she would rather have postponed the issue – but given that a vote appeared imminent, she wanted to set about to amend the ordinance.

Petersen indicated that she would rather have used the postponement to allow Kunselman and the DDA to come up with something that was mutually agreeable. But because the postponement did not get approved, she was simply looking for a different option that might be agreeable to the DDA and might make everyone feel a little bit better that the DDA would not be taking a “hit” in fiscal year 2014. Petersen had been hoping that this was something that Kunselman could have led the DDA to agree to, but in the absence of that possibility, she was proposing it herself.

Hieftje asked for deputy director of the DDA Joe Morehouse to come forward and walk the council through a version of the DDA’s 10-year planning document. Hieftje got confirmation that in FY 2015 and FY 2016, the DDA’s TIF fund balance was planned to be $441,060 and $264,816. Hieftje questioned whether it would even be possible for the DDA to undertake TIF projects with fund balances that low. Susan Pollay, executive director of the DDA, indicated that the concern would be about leaving the DDA with a zero fund balance. Pollay indicated that in a previous year, the auditor had highlighted a deficit in the DDA’s parking fund. Hieftje pointed to streetlight replacements on Main Street and curb ramp replacements as projects that might not happen if the ordinance amendments were to be enacted.

At that point, Kunselman had gotten out of his seat and moved down the table to talk with Petersen. Hieftje objected, saying, “We don’t usually have side conversations during the debate.” Hieftje continued by saying that it was hard for him to understand how people could say that this was not going to harm the DDA or its ability to do projects.

Lumm countered by asking Crawford to confirm what the impacts are of the ordinance changes on the DDA. She felt that the rhetoric had escalated and that the council was now hearing how catastrophic an impact this is going to have on the DDA. Lumm began her recitation of the financial information. For FY 2013, Lumm noted, there is no TIF refund planned. For FY 2014 as a result of new developments, the gross TIF is projected to grow by $650,000 or 17%, to $4.5 million and then to grow by roughly $100,000 a year. “So far so good?” she asked Crawford. Yes, he replied.

But under the ordinance amendments, Lumm continued, in FY 2014 there would be a $930,000 refund to the various taxing entities, of which the city would receive $490,000. The DDA would retain $3.57 million, which represents a $280,000 reduction compared to the current year, she said. So what folks are characterizing as “the sky is falling” and dismantling the DDA is all about a $280,000 year-to-year reduction to the DDA’s revenues compared to this year, which is equivalent to a 1% reduction for a $25 million annual operation, she concluded. The city of Ann Arbor would receive $490,000 more, she continued. Under the ordinance revisions, she said, TIF revenue to the DDA is projected to reach $4.6 million by 2023. That’s 19% higher than the FY 2013 level, Lumm said.

Crawford had two comments on Lumm’s remarks. After FY 2014, he said, the city had used the standard DDA assumption for growth. [That means that those numbers don’t assume completion of major new construction like 624 Church St., which has been approved by the council, or 413 E. Huron, which might be approved.]

The numbers that have been discussed also don’t include the reduction due to the elimination of the personal property tax, Crawford noted. That amounts to about $175,000 a year, he said. Lumm countered by saying that the personal property tax would be eliminated regardless of the ordinance change.

Outcome: Petersen then asked if her amendment might be accepted as “friendly,” which meant that no vote would be needed. Petersen’s amendment was accepted as friendly.

DDA Ordinance Revisions: Disclosure

Warpehoski at that point said he wanted to take the opportunity again to disclose that his wife, Nancy Shore, is the director of the getDowntown program, which is funded in part by DDA parking revenue funds. His understanding of Shore’s funding was that it was not the case that her job would be in jeopardy. He said if anybody had questions about the ethics of his voting on the item, they could excuse him from voting. He wanted to make sure that that was on the table.

Warpehoski read aloud the bulk of the relevant city charter passage.

The charter has two parts that address voting duty and recusal of councilmembers:

Except as otherwise provided in this charter, each member of the Council present shall cast a “yes” or “no” vote on each question before the Council, unless excused therefrom by a vote of at least six members.

A member of the Council shall not vote on a question in which the member has a financial interest, other than the general public interest, or on any question involving the member’s own conduct. If a question is raised under this section at any Council meeting concerning the eligibility of a member of the Council to vote on any matter, such question shall be finally determined by the concurring vote of at least six members of the Council, not including such member

No one responded to Warpehoski’s disclosure and no vote was taken to determine the issue.

DDA Ordinance Revisions: Governance

Lumm continued by characterizing the impacts of the ordinance amendments on the DDA as “not that significant,” once you get past the hyperbole about dismantling the DDA. The goal is to define the funding formula for the DDA, which would result in improved fiscal discipline, accountability, and controls, she said. She did not think that could be inappropriate.

Lumm began to turn the conversation toward the governance aspects of the DDA ordinance amendments. She supported a strong and autonomous DDA, and contended that today Ann Arbor does not have an arm’s-length, independent DDA. Instead, Lumm continued, the DDA is currently an extension of the mayor and the city council. She felt the best interests of the DDA, the downtown, and the city would be better served by more independence and fresh eyes, so for those reasons she supported the governance aspects of the proposal.

Those governance issues include term limits and some guidelines with respect to appointing elected officials to the DDA board. The result was that significant funding decisions are made outside the regular budgeting process, Lumm said. With little or no accountability, the DDA awards around $2 million in grants annually. She wasn’t saying those grants have been inappropriate, but the decision about whether to use a half-million dollars a year to pay for debt on the new city hall/Justice Center (as the DDA does) or to fund public safety personnel should be a decision made inside the budget process, not outside, she said.

So Lumm supported the elements of the ordinance revisions that more clearly defined TIF capture and how much the DDA retains and how much is refunded to the original taxing entities. She did not feel it represented a hardship to the DDA. Clarifying the funding represents a positive step forward in terms of transparency, accountability, and control and ultimately results in an equitable sharing of revenues, she said. By passing the ordinance revisions, she felt that the council would be taking a step toward re-establishing a high-performing, autonomous DDA, coupled with the appropriate levels of controls and accountability. She concluded that she would be supporting the amendments.

DDA Ordinance Revisions: Amendment – Capital Budget

Briere said she wished she felt as confident as Lumm did that the proposed language change provides the clarity that she seeks. So she offered an amendment that would add language:

The authority shall submit their capital budgets to incorporate them into the City’s Capital Improvement Plan (CIP). The authority shall at the time they submit their budget for Council approval identify that portion of the budget which is operating and that which is capital projects.

The purpose of the change, Briere said, was to reflect a concern she had heard over the years. The concern was that the city had repeatedly asked the DDA to undertake projects on behalf of the city, and that the DDA had always said yes. The DDA has allocated its funds to undertake those projects, but they are never in the city’s capital improvements plan, because the DDA is an independent organization, she said.

While the city council approves the DDA’s budget, the city council does not approve the DDA’s allocations. So by having the DDA provide the city with a list of proposed capital improvements at the same time that the city council looks at the capital improvement plan, and by breaking the budget into capital improvements versus operating funds, that would allow the council to ask questions about the DDA’s intended capital improvements. If some people felt that the DDA had spent its money carelessly without council approval, her goal was to begin to address that, Briere said.

Hieftje wondered what added clarity Briere’s amendment achieved. Briere noted that when a project springs forth as full-blown, people might have the impression that they’ve never heard of it before. This is an attempt to guard against that, she said.

Outcome: Briere’s proposed amendment passed on a unanimous vote.

DDA Ordinance Revisions: Amendment – Term Limits

Hieftje then indicated that he had a particular point he wanted to make – but someone else would need to move the amendment, which related to the term limits set forth in the ordinance changes. He noted that the DDA works on long-term projects, saying that the South Fifth Avenue underground parking structure was in the making for about 10 years. He attributed the idea to former DDA board member Rob Aldrich.

Currently on the DDA board there are five members who are in their second term, Hieftje said. Three members are in their first term. One member is in his third term. And one member [Leah Gunn] has served many terms. Hieftje indicated she would be retiring from the board this year. He did not see a need for term limits on the DDA, saying that they had not turned out well for the state of Michigan in the legislature – something he felt was acknowledged by most people. He thought there could be at least two members who did not wish to be reappointed this year, which meant there would be two vacancies coming up. So he asked if there was someone who would be willing to offer an amendment to strike the term limits from the ordinance change. The proposal was moved by Teall and seconded by Warpehoski.

Lumm indicated that she would not support the elimination of term limits. She felt that most organizations have bylaws that cover term limits. She called term limits “a positive” and felt they were appropriate. She described the DDA board as composed of many current and former elected officials. Some have joked that the DDA board has become like a kind of “retirement home for former councilmembers,” Lumm said. It needs greater independence, she contended.

Under mayor Ingrid Sheldon, Lumm said, term limits for all boards were the norm. The expectation at the time – of both Democrats and Republicans who served with Sheldon – was that there would be term limits, and there was a lot of turnover. She felt there was little turnover on many of the city’s boards and commissions. She felt the term limits would help strengthen the DDA as an organization. She wanted the board composition to be more reflective of the downtown community. She did not want it to be an extension of the city council – which is what she felt like it was today.

Lumm questioned why the DDA had pledged $508,000 a year to pay for the new police/courts building. If she owned a downtown business, she would ask the question: How does that help my downtown business? Actions like that are taken by the DDA because the makeup of the board makes it an extension of “this group sitting here,” and that’s not healthy, Lumm contended.

Responding to Lumm’s question about the DDA’s support of the police/courts building, Hieftje noted that public buildings are one of the things that the DDA is enabled by state statute to spend money on. Hieftje also cited David DeVarti and Leah Gunn – long-time former and current members of the DDA board – as a counterexample to Lumm’s contention that there had been defacto term limits imposed under Sheldon.

Taylor noted that a broad base of business leaders in the downtown and in Ann Arbor had voiced their wholehearted support for the DDA, emphasizing the “it-ain’t-broke aspect of the organization.” So he supported the amendment to strip out the term limits.

Stephen Kunselman (Ward 3).

Kunselman told Hieftje that he was willing to support stripping out the term limits “if you’re going to tell us right now before we go too much further that you’re willing to support this ordinance amendment, if it contains the TIF capture methodology that has recently been amended [in a friendly way]…” Kunselman continued: “It’s three o’clock in the morning. If you give us your word that you’re going to vote on amending the ordinance with regards to the TIF capture, then we can get through this. Otherwise we’re going to go through all this …”

At that point, Hieftje interrupted Kunselman by saying “Absolutely not!” Kunselman sighed: “Well, then, here we go.”

Warpehoski supported the stripping out of term limits. He felt that boards need both renewal and historical memory. He felt that a small staff of four people, which the DDA has, is not adequate to provide the kind of living memory that a long-term board member can provide.

Warpehoski stressed that if the council did not want to re-appoint someone, it was a matter of lining up the votes to accomplish that. Petersen indicated she did not support stripping the term limits out, because she felt it’s helpful to have some planned turnover. Anglin felt like term limits might help reinvigorate some boards. Some people are intimidated from applying to boards because they feel like they would not fit in, he said.

Outcome: The vote on stripping out term limits failed on a 5-4 vote, because it did not get the needed six-vote majority. Voting against term limits were: Teall, Warpehoski, Hieftje, Briere, and Taylor. Voting for term limits were Anglin, Petersen, Lumm, and Kunselman. Higgins and Kailasapathy were absent.

DDA Ordinance Revisions: Denouement

After the failed outcome of the attempt to amend the ordinance revision, Warpehoski noted the dynamic that had evolved from the absence of two councilmembers. He also pointed out the lateness of the hour. “We’re not getting anything done. We’re not thinking straight.” He moved to adjourn the meeting until Monday, April 22, at which time it would continue.

After a brief recess, the council came back and Warpehoski’s motion was to postpone all remaining agenda items until May 6, the next regular meeting, thus ending the April 15 meeting.

Outcome: The council voted unanimously to postpone all remaining items on its agenda until May 6. [.pdf of DDA ordinance as it will appear on the council's May 6, 2013 agenda]

April 15 Actions

The council did take action on a limited set of items at the April 15 meeting. Some of them were moved ahead on the agenda at the start of the meeting, because they were pressing matters or else needed eight votes to pass – like items involving land acquisition. The agenda changes reflected an implicit recognition that some councilmembers might need to leave before the meeting concluded.

Action: Wastewater Treatment Pumps

The council was asked to consider a $122,595 contract with Hubbell, Roth & Clark Inc. for replacement of “secondary effluent pumps” at the city’s wastewater treatment plan. One of the pumps had failed catastrophically. At the council meeting, wastewater treatment facility manager Earl Kenzie told the council that an assessment was made of the other five pumps to determine if the one pump should simply be replaced or if all of them should be replaced. That assessment, Kenzie said, showed that the other five pumps, which are over 30 years old, are in similar shape.

Outcome: The council unanimously approved the contract with Hubbell, Roth & Clark Inc. for the pump replacement.

Action: Bridge Maintenance Program

On the council’s agenda was an application for funding under the state and federal local bridge program, which the city hopes will fund up to 95% of eligible construction costs. The remaining 5% would need to be paid by the city of Ann Arbor. The city is also responsible for design, construction engineering and testing costs.

The three city bridges that would have preventative maintenance done with funding from the program would be: the Fuller Road bridge over the Norfolk Southern Railroad tracks; the Maiden Lane Bridge over the Huron River; and the East Medical Center Drive bridge over the Norfolk Southern Railroad.

Outcome: The council unanimously approved the funding application for the local bridge program.

Action: MDOT Application for 721 N. Main St.

The council was asked to approve an application to the Michigan Dept. of Transportation (MDOT) and the Southeast Michigan Council of Governments (SEMCOG) for funding through the transportation alternatives program (TAP) to support future city work on its property at 721 N. Main St.

During the brief discussion by the council, Sabra Briere (Ward 1) noted that the city had been awarded $150,000 by Washtenaw County parks & recreation for the 721 N. Main site, which is contingent on approval of a $300,000 grant that the city has requested from the Michigan Dept. of Natural Resources Trust Fund. Briere expressed her hope that the TAP money could be another grant that will bring amenities to the city property, including pathways and a wetland.

Outcome: The council unanimously approved the grant application to MDOT and SEMCOG for the 721 N. Main property.

Action: Land Purchase Near Ruthven Nature Area

The council considered a resolution to purchase another parcel within the city limits adjoining an existing nature area. The purchase price for the roughly 8-acre vacant parcel owned by Windy Crest Partnership – located just east of the Ruthven Nature Area – was $110,000. The parcel fronts on Meadowcreek Drive.

The parcel purchased by the city lies mostly within the floodplain or floodway as this image shows.

The city’s share of the purchase price is $82,500, with the remaining $27,500 contributed from Washtenaw County parks & recreation. Including the $13,000 in closing and due diligence costs, the city of Ann Arbor’s share amounted to $95,500, which will be paid from the city’s open space and parkland preservation millage proceeds.

The parcel is mostly in the floodway, as Millers Creek runs through it. Future costs associated with maintaining the site will include management by the city’s natural area preservation staff, who will conduct ecological burns and remove non-native species.

Purchase of the Meadowcreek Drive property marks the third similar acquisition by the city in about the last seven months, using funds from the open space and parkland preservation millage. At its Oct. 15, 2012 meeting, the council authorized the acquisition of a parcel on Hampstead Lane, adjoining the Kuebler Langford Nature Area. And at its March 4, 2013 meeting, the council authorized the acquisition of a roughly 0.357-acre piece of vacant land located on Orkney, adjoining the Bluffs Nature Area.

During the brief council deliberations, Jane Lumm (Ward 2) said she was pleased to see the item on the agenda. She ventured that sometimes people forget that the greenbelt and open space millage was conceived of having a two-thirds to one-third split between land purchased outside and inside the city. She noted that the parcel is in Ward 2, which she represents. She called the acquisition a high value investment of the millage proceeds.

Outcome: The council voted unanimously to purchase the parcel.

Action: Riverside Easement for DTE

The council considered an easement between the city of Ann Arbor and DTE Energy – for land in Riverside Park where utility poles are located.

The easement had been recommended for approval by the Ann Arbor park advisory commission at its March 19, 2013 meeting. [.pdf of easement agreement]

DTE Energy Buckler substation site plan. (Links to larger image)

The easement agreement is needed so that DTE can remove old utility poles and install new poles and overhead lines – generally in the same location as existing poles and lines at Riverside Park. The easement allows DTE to provide maintenance on those poles and lines. DTE requested the easement in relation to an $8 million new electrical substation that the energy firm is building on land adjacent to the park. The Buckler substation’s site plan was approved last year by the city’s planning commission on June 5, 2012. It did not require city council approval.

The overall project entails building the substation in the utility company’s Ann Arbor service center – to provide a way to distribute an increase in electrical power to the downtown area due to increased demand for electricity. The project includes two 15.5-foot tall electrical transformers and related electrical equipment on raised concrete pads, and a new power delivery center (PDC) – a 630-square-foot, 12.5-foot tall steel structure. The source of power will be transmitted through underground sub-transmission cables in an existing manhole and conduit system.

The project also needed a variance to the 15-foot conflicting land use buffer requirements along the east side property line, adjacent Riverside Park. DTE requested a variance that would allow the firm to plant 23 trees along the far western side of Riverside Park instead of on DTE property. PAC recommended approval of that variance at its Feb. 28, 2012 meeting. It was subsequently authorized by the zoning board of appeals on June 27, 2012.

In addition to planting trees in the buffer, DTE plans to remove 15 trees along Canal Street, which will be replaced by 50 trees in other parts of the park. As stipulated by city ordinance, DTE also will be required to pay the city a “tree canopy loss” fee. According to the city’s urban forestry website, the current canopy loss rate is $186/inch for shade trees and $172/inch for ornamental trees. For this project, DTE will pay $23,800, which will be earmarked for future improvements to Riverside Park.

Construction on the substation will take place during the summer of 2013.

Outcome: Without discussion, the council unanimously approved the easement.

Action/Postponement: Summit Townhomes

The site plan and necessary zoning for the Summit Townhomes project both appeared separately on the council’s agenda. But the council reached only the zoning question before voting to postpone everything.

Both the site plan and zoning request previously had been postponed by the council at its March 18, 2013 meeting. The property is located at 2081 E. Ellsworth Road.

The parcel for the Summit Townhomes development (shaded yellow). The blue line is the boundary between the Malletts Creek and the Swift Run watersheds.

The developer plans to build 24 attached residential units in four separate buildings, with each building between 80 to 160 feet in length. Each of the 24 units would have a floor area of about 1,300 square feet, and an attached one-car garage. The plan includes two surface parking areas on the east and west sides of the site, each with 12 spaces. To do this, the property needs to be zoned as R3.

March 18 had been the first time the site plan had been before the council. But the R3 (townhouse district) zoning for the property, annexed from Pittsfield Township, had been previously considered by the council, and referred to the planning commission for re-review. The planning commission then confirmed its original recommendation for R3 zoning.

In more chronological detail, the zoning item had first appeared on the city council’s Jan. 7, 2013 agenda, when it received initial approval. However, at its Feb. 4, 2013 meeting, the council heard from about a half dozen people who spoke during the public hearing, in opposition to the zoning – citing concerns about congestion and overcrowding. So councilmembers voted unanimously to refer the zoning issue back to planning commissioners for another look. The council indicated interest in hearing more detail on drainage issues, and the level of recreational services offered in that general area of the city, as well as information about public safety issues.

At their Feb. 21, 2013 meeting, planning commissioners voted again to recommend that the site be zoned R3 (townhouse district) – the same zoning they had previously recommended at their Nov. 20, 2012 meeting.

The project has been working its way through the city’s approval process for several months. The site plan had been postponed by planning commissioners in June of 2012 and again on Nov. 20, 2012, but was ultimately recommended for approval at the commission’s meeting on Jan. 3, 2013.

Before recommending the site plan, planning commissioners had previously recommended approval of annexation and zoning of the site in 2012. At their June 19, 2012 meeting, commissioners had approved annexing the 2.95-acre site, just east of Stone School Road, from Pittsfield Township into the city of Ann Arbor. The annexation was subsequently authorized by the city council.

On the zoning question, council deliberations consisted of just some brief remarks by Christopher Taylor (Ward 3). He observed that the issue had been postponed on a number of occasions, and at this point he was willing to let it go forward. Residents in the area had spoken persuasively about a number of concerns involving density and traffic congestion. But Taylor felt that residents recognized that the differences between the various options were marginal – even though those differences had been large enough that the question had merited further inquiry.

Outcome: The council voted unanimously to approve the R3 (townhouse) zoning, but did not reach the site plan approval before voting to postpone everything on its agenda. So the site plan will return to the council’s May 6 agenda.

Postponement: Theta Delta Chi Site Plan

On the council’s agenda was a site plan for the expansion of the Theta Delta Chi house at 700 S. State. The property is located at the southwest corner of State and Monroe streets.

Aerial view of Theta Delta Chi property, at Monroe and State streets.

The city planning commission had recommended the project for approval at its Feb. 21, 2013 meeting. Commissioners also granted a special exception use for the building.

The proposal includes expanding the square footage from 12,386 square feet to 14,752 square feet by making an addition at the rear of the fraternity house. The property is zoned R2B (two-family dwelling district and student dwelling district), and the size of the lot would allow for occupancy of up to 50 people. However, the fraternity is not proposing to increase its current occupancy of 33 residents.

The new addition will include an expanded restroom and shower facilities, common space, a resident manager’s apartment, and a bike room with nine bicycle spaces. According to a staff memo, the project entails moving the driveway, which is accessed off of Monroe Street, about five feet to the east. To do this, the fraternity will need to enter into an agreement with the Ann Arbor Downtown Development Authority and shift two on-street parking meters a few feet to the east.

The project also will require several variances from the city’s zoning board of appeals, including: (1) permission to alter a nonconforming structure (due to height and setbacks); (2) variances from Chapter 59 (off-street parking) to reduce the number of parking spaces required and allow one parking space in the front open space; (3) a variance from Chapter 47 (streets) to reduce the drive opening width; and (4) a variance from Chapter 62 (landscape and screening) to reduce the conflicting land use buffer width.

Other changes planned for this project include converting a yard on the south side of the house into a large patio. That area is currently used for parking. A new shed for a dumpster, recycling carts, and bike storage is proposed near the southwest corner of the site.

The fraternity is adjacent to apartment buildings and across the street from the University of Michigan law school.

Outcome: The council did not reach the Theta Delta Chi site plan on its agenda before deciding to postpone every item. It will appear on the council’s May 6 agenda.

Postponement: Privacy Law

The council was asked to consider a new ordinance regulating the use of public surveillance cameras. [.pdf of ordinance as presented to the council on April 15, 2013] This was to have been the first reading of the ordinance. All ordinances require readings at two separate meetings of the council before they can be enacted.

The proposed video privacy ordinance would not apply to CTN cameras like this one mounted in the Ann Arbor city council chambers.

The new ordinance would apply only to a limited range of cameras – those used by the city of Ann Arbor “to monitor human activity without the physical presence of an operator, including cameras on remotely operated aerial vehicles.” The ordinance would not apply to a range of city of Ann Arbor cameras, for example: cameras used to improve traffic design, security cameras operating in jails, prisons, water treatment facilities, public housing facilities, or the Ann Arbor Airport and other governmental facilities.

The new ordinance would allow for public surveillance cameras to be installed for 15 days or less at the discretion of the city administrator if the purpose is to address a specific criminal problem.

A period of longer than 15 days would require two-thirds of nearby residents to give written permission. Regardless of the period of the installation, on-site notice of the camera’s presence would be required. If a private residence is in the public surveillance camera’s range, then the residents of that property would have to give written permission for the installation.

A public surveillance camera could not be used for live-monitoring, except in emergencies, and audio recording would not be permitted. Access to the recorded images would be limited to “employees of the police department and attorneys involved in criminal proceedings.” After 90 days, surveillance recordings would be deleted unless they are part of an ongoing investigation. A report on the effectiveness of a camera would be published on a public website after its removal.

The council had been alerted to the forthcoming ordinance proposal nearly four months ago, when Chuck Warpehoski (Ward 5) told his colleagues at their Dec. 20, 2012 meeting that he and wardmate Mike Anglin would be bringing a proposal forward.

At that meeting, Warpehoski said the Ann Arbor police department doesn’t currently use that surveillance technique, but there had been some concerns in other communities.

By way of additional background, the ordinance has been long in the works but has been delayed. Former Ward 1 councilmember Sandi Smith had announced at a council meeting over a year ago, on Aug. 4, 2011, that she’d be bringing a video surveillance ordinance for consideration at the council’s Sept. 6, 2011 meeting. And a year before that she’d indicated the human rights commission would be working on the issue.

Outcome: The video privacy ordinance was not reached on the agenda before the council decided to postpone everything remaining on the agenda. The video privacy ordinance will be added to the council’s May 6 agenda.

Postponement: 413 E. Huron

One of the major agenda items of the April 15 meeting was the site plan application for 413 E. Huron – a proposed 14-story, 216-apartment building at the northeast corner of Huron and Division streets.

From the site plan application for 413 E. Huron. Critical root zones of landmark trees are shown by the dashed circles. The root zones were a focus of much of the questioning by councilmembers on March 18, and was a focus of public commentary on April 15.

The project was presented to the council as a “by right” project, which means that in the judgment of the city planning staff, it met all the zoning requirements.

The Chronicle counted 51 speakers during the public hearing on the 413 E. Huron site plan.

The council had previously postponed a site plan decision on April 1, 2013 and on March 18, 2013.

Consideration of the site plan came after the council had considered and postponed, then finally voted not to impose a possible moratorium on site plan applications in the D1 (core downtown) area.

Instead, the council voted on March 18 to give the planning commission direction to review the city’s D1 zoning. The scope of that review and a deadline of Oct. 1 was given at the council’s April 1 meeting.

A new public hearing on the project was started at the April 1 meeting, and held open so that it could resume on April 15. That public hearing will continue on May 6.

Images for the proposed 413 E. Huron project, at the northeast corner of Huron and Division. On the left is an early rendering provided by the developer. On the right is an updated version presented to the city council on March 18, 2013.

During council communications time, mayor John Hieftje took the opportunity to repeat a point that has been made during public commentary at previous meetings. The point was that the 2009 A2D2 rezoning, which designated as D1 (downtown core) the parcels where the 413 E. Huron is intended to be built, imposed a height limit of 150 feet, where no height limit had previously existed.

Hieftje continued by noting that the density allowed under the D1 zoning was only slightly higher than the previously-allowed density.

Sabra Briere (Ward 1) thanked Hieftje for making the point. She also pointed out that the previous zoning would have allowed only for a single use. It could not have been built as a multi-use like the proposed 413 E. Huron project and still met the code. Whether anybody would have built a commercial building that tall is something that “we’ll hopefully never know,” she said.

Outcome: The council did not reach the 413 E. Huron site plan on its agenda before deciding to postpone everything remaining. The site plan will appear on the council’s May 6 agenda.

Postponement: Misc.

A number of other agenda items were subject to the wholesale postponement of everything remaining on the council’s April 15 agenda. Those included the following:

• The appointment of Stephanie Buttrey as a member of the greenbelt advisory commission (GAC). Nominations to GAC are somewhat different from most other boards and commissions, in that nominations are made by the council as a body, not the mayor. Buttrey is being nominated to serve out the remainder of Liz Rother’s term – through June 30, 2014. Rother resigned the position. The resolution to appoint Buttrey was slated to be effective May 6 – which reflects the council’s typical practice of placing the resolution on the agenda as a “nomination” but then postponing the vote until the next meeting. In that respect the pattern is consistent with appointments for which the mayor places nominations before the council at one meeting, with a council vote taking place the following meeting.
• Confirmation of nominations to boards and commission made at the council’s April 1 meeting. Those included Sheila Steinman to the commission on disability issues and a reappointment of Ingrid Ault to the housing and human services advisory board. On April 1, Nickolas Buonodono had been nominated to replace Leigh Greden on the Ann Arbor Housing Commission (AAHC) board, after Greden had reached the end of a term. However, that nomination was not on the council’s April 15 meeting agenda for confirmation. According to AAHC executive director Jennifer Hall, who spoke to The Chronicle in a telephone interview, Greden may seek reappointment for a second term if he can accommodate his schedule to the meeting times.
• An amendment to an emergency purchase order for $7,500 with Waste Management Inc. for the Dexter Avenue improvements project. The council had previously authorized an emergency purchase order for $45,000 to remove contaminated soil discovered during excavation. It turned out there was more contaminated soil than initially thought.
• Establishment of a contingency budget of roughly $10 million for the facilities renovations project at the wastewater treatment plant. The council had previously awarded a roughly $10.8 million contract with Malcolm Pirnie Inc. (MPI) for engineering services. And the council had approved the tentative award of a roughly $93 million construction contract with Walsh Construction Company II LLC.
• Approval of $262,000 in payments to Ultimate Software Group over the next two fiscal years. The city uses the software for human resources and payroll services.

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

Next council meeting: Monday, May 6, 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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Christopher Taylor, a Ward 3 Ann Arbor city councilmember, was recently appointed to the city’s greenbelt advisory commission and attended his first meeting on Dec. 6. (Photos by the writer.)

GAC members authorized staff to proceed with property appraisals, as needed, to prepare for possible grant applications to the U.S. Department of Agriculture’s Farm and Ranchland Protection Program (FRPP). There’s some uncertainty about how much grant funding will be available, but Ginny Trocchio – who provides staff support for the greenbelt program – anticipates the deadline to apply will be in early March. She is seeking landowners who might be willing to sell their property’s development rights in deals that would be eligible for FRPP grants.

Trocchio also noted that the city hopes to close on five pending deals by the end of 2012. If that happens, it would bring the total amount of land protected through the greenbelt to about 4,200 acres. The program is funded by a 30-year millage approved by Ann Arbor voters in 2003, and organizers at that time hoped to preserve between 3,500 to 4,500 over the life of the millage. Land prices have fallen since that time because of the economic downturn, allowing the program to protect more land than originally anticipated. The land is protected primarily through the purchase of development rights.

The Dec. 6 meeting also included some housekeeping tasks: the election of officers, and approval of GAC’s 2013 calendar. Current officers were re-elected – Dan Ezekiel as chair, and Catherine Riseng as vice chair. Ezekiel noted that his term ends in mid-2013 and he’ll be term-limited at that point, so a new chair will be needed then. Laura Rubin will also be cycling off GAC next summer . She and Ezekiel are the last of the original commissioners who were appointed in 2004, when the greenbelt program was formed.

The meeting was the first for Ann Arbor city councilmember Christopher Taylor (Ward 3), who was appointed to GAC at the council’s Dec. 3 meeting. Taylor also serves as one of the council representatives on the city’s park advisory commission. Ezekiel noted that it will be good to have a “direct pipeline” between the two groups. At least a couple of greenbelt commissioners also commented to Taylor that they were glad to have a city councilmember again on GAC. The previous city council appointee, Carsten Hohnke, attended only one GAC meeting in 2012. Hohnke did not run for re-election to the council and ended his council service in early November.

Election of Officers

GAC chair Dan Ezekiel noted that the commission needed to do some “cleaning up” that was overlooked in July – the election of officers. He suggested electing officers for a six-month term, in order to get back on track with July elections next year.

Laura Rubin asked whether Ezekiel and Catherine Riseng, the current vice chair, were willing to continue serving. They indicated that they were. In that case, Rubin said she’d nominate them, unless others were interested. No one responded to that gambit.

Outcome: Commissioners unanimously re-elected Dan Ezekiel as chair and Catherine Riseng as vice chair.

After the vote, Ezekiel noted that his current term ends on June 30, 2013 and he can’t be reappointed to GAC because of term limits. So there will be at least one new officer elected at that time, he said.

The terms of two other current members – Tom Bloomer and Laura Rubin – also end on June 30, 2013. Like Ezekiel, Rubin has served since the commission was formed in 2004 and will be term limited. Bloomer was first appointed in 2007 and reappointed in 2010 – he’s also term-limited.

GAC’s original members served initial staggered terms, plus two additional three-year terms. Current GAC member are limited to serving two three-year terms. Some terms of current commissioners were restated in 2011 by council resolution, for various administrative reasons.

Here’s a list of current GAC members, the category they represent (as stipulated by city ordinance) and their terms:

• Dan Ezekiel (public at large): first appointed in 2004, current term ends June 30, 2013. Status: term limited.
• Laura Rubin (environmental organization): first appointed in 2004, current term ends June 30, 2013. Status: term limited.
• Tom Bloomer (farmer): first appointed in 2007, current term ends June 30, 2013. Status: term limited.
• Liz Rother (public at large): first appointed in 2011, current term ends June 30, 2014. Status: eligible for reappointment.
• Shannon Brines (public at large): first appointed in 2011, current term ends Nov. 20, 2014. Status: eligible for reappointment.
• Peter Allen (real estate developer): first appointed in 2008, current term ends June 30, 2015. Status: term limited.
• Catherine Riseng (biologist): first appointed in 2010, current term ends June 30, 2015. Status: term limited.
• Archer Christian (environmental organization): first appointed in 2012, current term ends July 1, 2015. Status: eligible for reappointment.
• Christopher Taylor (city council representative): first appointed in December 2012 through 2013.

[.pdf of Chapter 42 of the Ann Arbor city code: Open space and parkland preservation]

Land Deals

Ginny Trocchio, who provides staff support for the greenbelt program, reported that she anticipated the next round of funding available from the U.S. Department of Agriculture’s Farm and Ranchland Protection Program (FRPP) would be announced soon. Congress has not yet authorized a new farm bill, she noted, but did pass a continuing resolution that included FRPP funding. It’s not yet clear how much will be appropriated for Michigan projects, however.

Dan Ezekiel, chair of the greenbelt advisory commission, gives his signature to students who attended the Dec. 6 meeting for a class assignment, and who needed proof of their attendance.

Based on the schedules from previous years, it’s likely that FRPP applications will be due in early March of 2013, Trocchio said. That’s a short timeframe, she added, so it’s important to try to line up landowners now who might be willing to apply.

GAC’s next meeting is scheduled for Jan. 3, but it might be cancelled if not enough members can attend to achieve a quorum. So Dan Ezekiel suggested that the commission authorize staff to order any appraisals that might be necessary between now and GAC’s next meeting, for properties that might seek FRPP grants. He said that GAC had taken this kind of action previously, so there’s precedent for it.

Laura Rubin asked whether Trocchio had actually gotten appraisals in this way in previous years. Trocchio couldn’t remember, but noted that any FRPP applications would be brought to GAC and the city council before they are submitted to the federal program.

Outcome: Commissioners voted unanimously to authorize staff to order appraisals as needed until GAC’s next meeting.

Staff & Commissioner Updates

In her staff update, Ginny Trocchio reported that she hoped the city would close on five more greenbelt deals by the end of 2012, protecting an additional 450 acres. If that happens, it would bring the total amount of protected acres to about 4,200 since the greenbelt program launched, she said. The majority of that acreage is agricultural land protected through the purchase of development rights (PDR).

Trocchio noted that when the program began, the expectation was that it would fund protection for between 3,500 to 4,500 over the life of the 30-year millage. “The economy’s been good for us, at least,” she said, in terms of lowering the cost of farmland.

At a joint meeting held last month between GAC and the city’s park advisory commission, Trocchio had provided a more detailed update. She had noted then that land previously valued at about $16,000 per acre is now closer to $4,000, with the likelihood of even lower costs in the coming year. In a PDR deal, the landowner retains ownership of the land but sells development rights to the land. Those rights are protected through a conservation easement, which limits the kinds of development and activity that can occur on the land.

At the Dec. 6 GAC meeting, Trocchio also cited the partnerships with other local communities as a factor in helping protect a greater amount of land than anticipated.

Updates: Strategic Plan

Trocchio told commissioners that she had hoped to get input on proposed revisions to the greenbelt program’s strategic plan at the November meeting of Preserve Washtenaw, but that meeting had been cancelled. Preserve Washtenaw is a consortium of local land preservation groups, including the Legacy Land Conservancy, Washtenaw County’s natural areas preservation program, and several township programs.

Preserve Washtenaw members have copies of the strategic plan, Trocchio said, and she hopes to get their feedback in January. If that happens, GAC can consider that input at its meeting in February.

Commissioners had discussed proposed revisions to the strategic plan at their September 2012 meeting, but have not yet approved it. [.pdf file of 2012 draft greenbelt strategic plan]

Updates: Mayoral Proclamation

Trocchio highlighted a proclamation made by mayor John Hieftje at the Ann Arbor city council’s Oct. 15, 2012 meeting, declaring Oct. 24 as National Food Day in Ann Arbor. At the request of Dan Ezekiel, Trocchio read aloud the proclamation’s “whereas” clause that specifically related to the greenbelt program:

WHEREAS, the City’s Greenbelt program is an innovative land preservation program that has protected over 3,700 acres of farmland and open space surrounding the City of Ann Arbor, and has leveraged over $19 million through grants, landowner donations, and other locally funded programs.

Updates: Greenbelt Panel Discussion

Ezekiel reminded commissioners that a panel discussion focused on the greenbelt program had been held on Nov. 7 at the downtown Ann Arbor District Library. It had featured landowners who have participated in the program, including GAC member Tom Bloomer, who owns Bur Oaks Farm in Webster Township. The event was videotaped and will eventually be posted on the AADL website.

Contract with The Conservation Fund

Laura Rubin asked about the status of the city’s process to hire administrative support for the greenbelt program. The city had issued a request for proposals (RFP) in early November, with a Nov. 28 deadline for responses. [.pdf of management RFP] The contract is to manage operations for the city’s greenbelt and parkland acquisition programs, which are funded by a 30-year 0.5 mill open space and parkland preservation millage that voters approved in 2003.

From left: Greenbelt advisory commissioners Catherine Riseng and Laura Rubin.

Sumedh Bahl, the city’s community services area administrator, reported that proposals are under review and a recommendation is expected to be sent to city council in January. The contract would be for a one-year period, with the option for two one-year renewals. Bahl later clarified for The Chronicle that only one proposal had been received – from The Conservation Fund.

The Conservation Fund has held that contract since the greenbelt program launched. The current three-year contract ends on Jan. 15, 2013. The nonprofit is headquartered in the suburbs of Washington, D.C. Ginny Trocchio is the nonprofit’s Ann Arbor staff member.

The current contract was approved by the Ann Arbor city council on Dec. 21, 2009. It authorized $119,565 in 2010, with two one-year renewal options for $113,661 in 2011 and $106,797 in 2012. The Conservation Fund also was the only bidder for that request for proposals (RFP).

Dan Ezekiel thanked Catherine Riseng for serving as GAC’s point person on the RFP review committee for this contract renewal.

Present: Peter Allen (arrived late), Tom Bloomer, Shannon Brines, Archer Christian, Dan Ezekiel, Catherine Riseng, Laura Rubin, Christopher Taylor. Staff: Ginny Trocchio.

Absent: Liz Rother.

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Jennifer S. Hall, chair of the Ann Arbor greenbelt advisory commission, presided over her last regular meeting on May 11. Her term ends on June 30; GAC's June meeting will be a joint session with the city's park advisory commission.

Instead of holding their regular meetings in June, the greenbelt and park advisory commissions have scheduled a joint working session to discuss common goals and priorities – they last met jointly in April 2010.

Term limits were raised in another context during Wednesday’s meeting, when commissioners were asked to recommend that city council restate current GAC membership terms. Mary Fales of the city attorney’s office has been working on the revisions, after inconsistencies were discovered for current appointments. For example, a term for Ecology Center director Mike Garfield ended on June 30, 2009. Though he continued to serve, he was not officially reappointed to another three-year term until Sept. 21, 2010. Under the resolution recommended by GAC, all terms would end on June 30, over staggered years.

Also at Wednesday’s meeting, commissioners got an update about Michigan budget-related legislation that would cut tax credits for farmers. They were also briefed by staff about changes to the federal Farm and Ranchland Protection Program – the city has received millions of dollars worth of FRPP grants over the years to offset the cost of development rights purchased in the greenbelt.

Ginny Trocchio, support staff for the greenbelt program, told commissioners that June 16 is the date for a greenbelt celebration, starting at 5:30 p.m. at the Braun farm in Ann Arbor Township, which was added to the greenbelt in 2010. The event will be open to the public, and will include a presentation to highlight the program’s accomplishments.

Dan Ezekiel, GAC’s vice chair, reported that the subcommittee he’s leading to look at possible changes in the greenbelt boundary will be making a proposal at the commission’s July 13 meeting.

And in its final action of the meeting, commissioners emerged from a closed session and voted to recommend that Ann Arbor city council make a $127,200 offer for the purchase of development rights on a property within the greenbelt. Before appearing on the city council’s agenda, details of these greenbelt acquisitions are not made public – parcels are identified only by their application number.

Farmland Tax Credits

At the commission’s March 9, 2011 meeting, Tom Bloomer – a greenbelt commissioner and farmer who owns Bur Oaks Farm in Webster Township – gave an update on proposed state legislation that would impact farmers. GAC chair Jennifer S. Hall had asked him to provide more details at their next meeting. Because the April meeting was canceled, Bloomer’s first chance to brief the commission again came on Wednesday.

The state’s Farmland Preservation Program – under Public Act 116, the Farmland and Open Space Preservation Act – provides tax credits to farmers. As part of his overhaul of the state’s tax structure, Gov. Rick Snyder has proposed eliminating or reducing most tax credits. The changes would not only affect high-profile tax credits for the film industry, but also would cut tax credits in several other sectors, including brownfield redevelopment, historic preservation, and farmland.

At Wednesday’s meeting, Bloomer distributed a list of talking points regarding the farmland tax credits, and urged people to contact their state legislators about the issue. His points included:

• Michigan farmland assessments are higher than any other Midwestern state.
• Most Midwestern states assess farmland based upon current land use. Michigan assesses upon potential market value.
• Without PA 116 tax refunds, participating Michigan farmers would not be competitive in many areas of the state. PA 116 levels the playing field while holding local units of government harmless.
• With approximately $1 billion in annual tax abatements for all industry in Michigan, $35.9 million was returned to Michigan landowners in 2009 under the PA 116 program.
• Under PA 116, agricultural landowners pay normal property taxes, and then are reimbursed by the state for any property tax liability over 3.5% of household income. Therefore PA 116 is a reasonable benefit for working farms while not rewarding speculative landholders who may have much larger personal incomes.
• Food production is Michigan’s second largest industry, with $81 billion generated from the farm supplier through the food retailer, employing approximately 1 million persons. Production agriculture, with land as the primary resource, is the linchpin of the state’s entire food economy.

Commissioner Mike Garfield asked about the status of the legislation that includes changes to PA 116. Bloomer didn’t know. [The state Senate passed a tax reform package the following day that included cuts to farmland tax credits. It will return to the House to be reconciled for a final vote there – the Republican-led House has already approved a version of the legislation – before going to Snyder for his signature. Clarification: The legislation repeals PA 116 credits only as part of a broader repeal of the Michigan Business Tax. For individual filers, PA 116 credits would remain unchanged. Also, taxpayers could choose to continue filing the MBT – in that case, they would also continue to receive the PA 1116 credits.]

Commissioner Gil Omenn said he knew people were getting primed to testify about the tax changes at upcoming legislative hearings, but he wasn’t sure if the agricultural industry was represented. “We should hurry if we’re trying to make an impact,” he said.

Since the changes wouldn’t take effect until next year, Bloomer suggested that one strategy could be for farmers to sign up this year for the credits – contracts are for a minimum of seven years, but it’s possible to get the credits for up to 99 years, he noted. He said those would remain in place even if the credits are eliminated in future years. Contracts for the tax credits stay with the property even if ownership changes hands, he said – the only thing that would void the credits is if the land is used for something other than farming.

Commissioner Peter Allen said that if farmers feel their taxes are too high, they can always appeal that assessment. Yes, Bloomer replied, but the reality is it’s rare to win an appeal.

Allen noted that many of the tax credits slated for elimination – including historic preservation and brownfield credits – would really hit the real estate industry hard. [Allen is a local developer.] Now, some legislators are trying to find ways to soften that impact, he said. But the idea is to get everyone back to the same base, he noted – and taking away subsidies is part of that agenda for Snyder.

Bloomer reiterated one of the points in his handout – that neighboring states assess farmland based upon current land use, not potential market value. That puts Michigan farmers at a disadvantage, he said, and that’s what PA 116 was designed to address. It penalizes people who hold land for speculative purposes, he said, making it expensive for them to stockpile land for development. Allen noted that the pendulum is swinging on that – given the economy, there’s much less interest from developers.

GAC Membership Term Limits

Mary Fales from the city attorney’s office was on hand to update the commission about member terms. She had drafted a resolution to restate GAC’s membership terms.

GAC chair Jennifer S. Hall introduced the issue by noting that at their Nov. 10, 2010 meeting, she had mentioned that her term and the term for Gil Omenn would be ending as of June 30, 2011 – she had encouraged anyone who was interested to contact their city council representative. [For most city boards and commissions, the mayor is responsible for nominating members, and those nominations are voted on by the city council. However, GAC and the environmental commission differ in this respect – for those bodies, nominations are made by city councilmembers.]

From left: Ann Arbor greenbelt advisory commissioners Tom Bloomer, Dan Ezekiel, and Gil Omenn. Partially visible is Ginny Trocchio, greenbelt program manager, who appears to be describing how a bunny might hop through the forest. Ezekiel is portioning out candy he brought to share, purchased from the newly opened Cherry Republic store on Main Street.

At the time, in response to a query from The Chronicle, she had looked at information about terms on the commission and found some inconsistencies, and had asked the city attorney’s office to sort it out.

Fales said she conducted an historical audit, reviewing all GAC resolutions since its inception. She provided a handout that showed the history of GAC membership, beginning with inital appointments in 2004. [.pdf file of GAC membership]

There had been confusion because some commissioners had resigned in the middle of their terms. In other cases, there had been a delay between the time a term ended, and the point when city council reappointed that commissioner. The research Fales conducted also found that two council resolutions of appointment – in 2008 and 2009 – included incorrect term years.

The resolution that GAC was asked to consider on Wednesday restated the current terms, Fales said, aligning the start dates to all fall on July 1, over staggered years. The restated terms, all for three years, are as follows:

• Jennifer Santi Hall (public at large): July 1, 2008 – June 30, 2011
• Gil Omenn (public at large): July 1, 2008 – June 30, 2011
• Catherine Riseng (biologist): July 1, 2009 – June 30, 2012
• Mike Garfield (environmental organization): July 1, 2009 – June 30, 2012
• Peter Allen (real estate): July 1, 2009 – June 30, 2012
• Tom Bloomer (agricultural landowner): July 1, 2010 – June 30, 2013
• Laura Rubin (environmental organization): July 1, 2010 – June 30, 2013
• Dan Ezekiel (public at large): July 1, 2010 – June 30, 2013

Fales noted that the most interesting gap was Garfield’s. He was appointed to a two-year term from 2004-2006, then a three-year term from 2006-2009. That term ended on June 30, 2009, but the city council didn’t reappoint him until Sept. 21, 2010. Catherine Riseng was reappointed on that same date – she was appointed to fill a partial term following the resignation of Sylvia Taylor.

The ordinance governing GAC appointments states that commissioners can serve for 60 days after their term expires. Garfield indicated that this meant his votes during the gap could be invalidated. Fales replied that the resolution restating GAC terms would fix that – it sets Garfield’s appointment as starting on July 1, 2009.

Fales said she expected Carsten Hohnke – the city councilmember who serves on GAC, but who was absent from Wednesday’s meeting – would sponsor the appointment resolution at council, but she hadn’t talked to him about it yet.

Omenn asked about the city council slot on GAC – it wasn’t included in the resolution. Fales reported that the council selects a councilmember to serve on GAC each year, and that’s handled separately.

Commissioners are allowed to serve two consecutive, three-year terms. If they are appointed mid-term to fill a vacancy after another commissioner resigns, they can still be appointed to two full terms after that, Fales said.

Outcome: The commission voted unanimously to recommend that city council adopt the restated GAC membership terms.

Update on Federal Farm and Ranchland Protection Program

Ginny Trocchio of The Conservation Fund, which is under contract with the city to manage the greenbelt program, gave a presentation to commissioners on changes made in the 2008 farm bill to the federal Farm and Ranchland Protection Program (FRPP). The primary changes relate to a new certification process, and to land eligibility and scoring criteria used for grant funding. The greenbelt program has received several million dollars worth of FRPP grants, and has additional applications pending.

Entities can now become certified by the state conservationist, who makes recommendations for certification to the U.S. Natural Resources Conservation Service chief for final approval. Becoming certified has no impact on an entity’s ability to get FRPP funding, Trocchio said, but it does streamline the review process and gives more responsibility to the certified entity for program management.

To become certified, an entity must hold at least 25 conservation easements, including five FRPP easements obtained over the past five years. Easements that are held by another partner – even if the greenbelt program has contributed funding – don’t count, she said. [In general, conservation easements are deed restrictions limiting the amount of development that can be done on the site, in exchange for certain tax benefits.]

The city holds 13 conservation easements now, she said, and another three deals are expected to close by year’s end. Ten of those have used FRPP funds.

Ginny Trocchio of The Conservation Fund, preparing to give a presentation to the Ann Arbor greenbelt advisory commission.

Another criteria is closing efficiency – referring to the amount of time it takes to complete a transaction. Entities must have an average closing efficiency of 18 months or less for FRPP projects, over the past 5 years. The city has a 10-month average for closing, Trocchio said.

Ann Arbor is one of the entities in Michigan that’s closest to meeting certification requirements, she said, noting that it’s possible to ask for waivers for some of the requirements.

Commissioner Peter Allen asked for her opinion about whether the city should seek a waiver and apply for certification. Trocchio said she had some concerns. For one, no one has yet gone through the certification process, and details about how that might occur are still being worked out. She said she’d want to get more information before taking action. What’s more, these changes were in the 2008 farm bill, even though it’s just now being rolled out. Negotiations are about to begin for the 2012 farm bill, she noted, which could bring additional changes.

She said another possibility is to look at getting Land Trust Alliance accreditation for the greenbelt program.

Allen asked what would happen if federal tax subsidies are turned inside out, and the FRPP program is eliminated.

Peg Kohring, a manager with The Conservation Fund, said she’d recently talked with an aide for U.S. Sen. Debbie Stabenow, who chairs the Senate Committee on Agriculture, Nutrition, and Forestry. The aide had reported that since production is down worldwide, there will likely be fewer subsidies, and those that remain in place will focus on driving production. Farmland preservation would be well-positioned for that scenario, Kohring said.

Kohring also noted that if the city pursues Land Trust Alliance accreditation, there are a number of policies that they’d need to put in place, beyond the basic policies they’ve already adopted. GAC might think about directing Trocchio to look into what’s needed in order to get accreditation, she said.

Trocchio then discussed changes to the FRPP land eligibility and scoring criteria. Under the new criteria, up to 66% of land eligible for FRPP funds may be forest land, she said. Previously, at least 50% of land had to be in agriculture production. The scoring criteria still favors larger parcels, she noted – parcels under 30 acres receive no points in the scoring.

Additional criteria have been added for the ratio of the land being considered for an FRPP grant to the county’s average farm size. In Washtenaw County, the average farm size is 128 acres. If the ratio is less than one, zero points are awarded.

Ezekiel noted that many large farms outside of the greenbelt’s boundaries to the west cause the average farm size to be higher. Farms inside the greenbelt tend to be smaller, and that puts them at a disadvantage with this scoring criteria, he said. Kohring observed that they should consider this fact when looking at potentially changing the greenbelt boundaries. Unless some of those larger farms get included within the greenbelt boundaries, the program won’t be as competitive for FRPP grants, she said.

Staff, Committee Reports: Joint Meeting, Greenbelt Boundary

Ginny Trocchio reported that a joint working session of the greenbelt and park advisory commissions will be held on Tuesday, June 7. That means GAC will not hold its regular meeting on June 8, she said. [The two commissions last held a joint session in April 2010.]

Trocchio also reported that Thursday, June 16 is the date for a greenbelt celebration, starting at 5:30 p.m. at the Braun farm in Ann Arbor Township, which was added to the greenbelt program in 2010. It will be open to the public, she said, and will include a presentation to highlight the program’s accomplishments. Trocchio said she expects the program will close on several deals over the next few months that will push the amount of protected land over the 3,000-acre mark.

At GAC’s next regular meeting on July 13, Trocchio said the agenda will include a presentation on Scio Township’s land preservation efforts. The township recently went through some strategic planning, working with consultant Barry Lonik, and they’ll come to share their priorities with GAC, she said.

Dan Ezekiel, GAC’s vice chair, reported that the subcommittee he’s leading to look at possible changes in the greenbelt boundary will be making a proposal at the July meeting. Any changes to the boundaries would also require approval by the city council.

Several commissioners expressed their thanks to Jennifer S. Hall and Gil Omenn. Mike Garfield praised their remarkable service, noting that they’d both been involved in the original campaign to launch the greenbelt program. The program has been built up over the years, he said, “and you’ve both contributed enormously to this.”

Peter Allen suggested they throw a party in honor of Hall and Omenn – and jokingly asked if Omenn could host it at his house.

Hall said that leaving the commission will mark the end of her current span of service with the city – she no longer serves on any other city board or commission. She noted that her first appointment was to the planning commission in 2003, and that she was glad her final meeting was back at city hall. “It just feels right to end here.” [GAC and other city groups have been meeting for the past year or so at the county administration building, during renovations to city hall. The May meeting was the first time GAC had returned to city hall.]

Greenbelt Acquisition Recommended

The commission entered closed session to discuss land acquisitions. After emerging, they unanimously passed a resolution recommending that Ann Arbor city council make a $127,200 offer for the purchase of development rights for a property within the greenbelt boundaries.

Before appearing on the city council’s agenda, details of these greenbelt acquisitions are not made public – parcels are identified only by their application number. In this case, the parcel number is 2011-05.

Dan Ezekiel was the only commissioner to comment on the offer, calling it a wonderful property. He said it’s an example of the synergies they’re starting to see when development rights acquired on one property can provide the proceeds to start the process for another one – in this case, expanding a block of excellent farmland, he said.

Present: Peter Allen, Tom Bloomer, Dan Ezekiel, Mike Garfield, Jennifer S. Hall, Catherine Riseng, Laura Rubin, Gil Omenn

Absent: Carsten Hohnke

Next regular meeting: Wednesday, July 13 at 4:30 p.m. in the second-floor council chambers at city hall, 301 E. Huron St., Ann Arbor. The commission will hold a joint working session with the park advisory commission on Tuesday, June 8. [confirm date]

Rebekah Warren, current state representative from Ann Arbor, plans to officially announce her candidacy for Liz Brater's state senate seat on Sept. 19.

The year was 1992. Hecklers in Hamtramck threw broccoli at George H.W. Bush. Ross Perot got almost 19% of the presidential vote. And Michigan voters enacted term limits.

Fast forward to the present: Perot and Bush 41’s broccoli problem are largely forgotten, but term limits now shape elections for state office. Except in districts evenly enough divided between Democrats or Republicans that they might swing either way, it’s rare for an incumbent to face a serious challenge. Instead, political hopefuls wait for term limits to open the right slot.

That’s happening this election cycle with districts representing the Ann Arbor area. And jockeying is under way.

Next weekend, state Rep. Rebekah Warren (D-53rd District) will launch a campaign to succeed fellow Ann Arbor Democrat Liz Brater (D-18th District) in the Michigan Senate. A former state rep and former Ann Arbor mayor, Brater is term-limited and ineligible to run again for that seat.

Warren’s move will, in turn, trigger announcements from the Democrats who’ve politely waited for the two-term lawmaker to make her plans public before lining up to try and take her spot in the state House of Representatives.

Jeff Irwin and Ned Staebler are expected to enter the race for the 53rd District, which covers most of Ann Arbor and parts of Scio and Pittsfield townships. Irwin is a Washtenaw County commissioner representing a portion of Ann Arbor. Staebler is vice president of program administration at the Michigan Economic Development Corp. and an Ann Arbor resident.

In the heavily Democratic district representing the city of Ann Arbor, the candidate who wins in a primary can expect to sail through the general election in November.

State Rep. Pam Byrnes, who represents part of Ann Arbor and a large section of western Washtenaw County, is also considering a run for the 18th District state Senate seat.

State Senate Race

Still eligible to run for another term as state rep, Warren’s bid for the Senate sets up a potential Democratic primary in the 18th District, which represents Ann Arbor, Ypsilanti and the townships of Ann Arbor, Augusta, Dexter, Freedom, Lima, Lyndon, Northfield, Salem, Scio, Sharon, Superior, Sylvan, Webster and Ypsilanti.

Warren’s Washtenaw County colleague in the House – state Rep. Pam Byrnes of Lyndon Township – is serving her third and, under term limits, final term representing the 52nd District.

After rising to a leadership position as Speaker Pro Tempore, Byrnes says she’s seriously considering a run for the same 18th District Senate seat, but has yet to make a decision.

“Who knows what other opportunities might come up,” says Byrnes, who unexpectedly finds herself chairing a committee on a controversial plan for overhauling the health care system for public employees. “I’ll make a decision by the end of the year.”

Candidates have until May 2010 to file petitions to run for office.

For her part, Warren says the decision to seek the Senate seat stems from frustration over legislation that’s died in that chamber.

“I’ve had success getting legislation through the House and Senate and on to the governor’s desk,” says Warren, citing bills on Great Lakes water withdrawals and electronics-waste recycling. “But there’s been other legislation passed in the House that’s important to me – and to the county – that never even got a hearing in the Senate. We need different leadership there.

“I love what I do and think I’ve proven I can do a decent job for four or eight more years.”

Term limits enacted in 1992 set a cap of three two-year terms for state representatives and two four-year terms for the senate. Also limited to two four-year terms are the governor, lieutenant governor, secretary of state and attorney general.

Previous term-limited local lawmakers have been temporarily sidelined when the end of their terms did not mesh neatly with the terms of other offices.

Brater, who Warren hopes to succeed, was out of government for several years after leaving the House in 2000. She returned as a senator in 2002 when former state Sen. Alma Wheeler Smith was term-limited after two four-year terms.

Smith, Warren’s mother-in-law, sat out two years until term limits opened the seat in the 54th House district, which covers the eastern part of Washtenaw County. Smith won that seat but is term limited again – she is now a candidate for the Democratic nomination for governor.

Ruth Ann Jamnick, a former state rep from the 54th District and former Ypsilanti Township supervisor, has been mentioned as another possible candidate for the Senate seat. She could not be reached for comment.

53rd House District

Warren’s decision not to seek a third term in the House leaves an open field for that seat, which represents most of the city of Ann Arbor.

Ned Staebler, a Harvard grad with a master’s from the London School of Economics and Political Science, has deep political roots. His great grandfather was mayor of Ann Arbor from 1927-31, and his grandfather was a congressman from Michigan, a candidate for governor and an active Democrat. His father is married to former University of Michigan Regent Rebecca McGowan, a Democrat.

Staebler joined the state economic development agency in 2004, after previously working in finance – including a stint as an associate director with Bear Stearns International Ltd. in London, England. He declined to discuss the race, pending Warren’s official announcement, but has created a campaign committee to raise money.

Jeff Irwin, a Democrat elected to the county board in 1999 when he was still a University of Michigan student, likewise comes from a political family.

His father served as a state senator from the Upper Peninsula in the ’80s and later in the Granholm administration. And Irwin remembers as a child seeing lawmakers debate. “I watched (former Democratic state Sen.) Lana Pollack go toe-to-toe with (former Republican governor) John Engler and I knew who I wanted for my role model.”

Irwin worked on statewide and Great Lakes issues for the League of Conservation Voters Education Fund for six years and later on state environmental policy with the Michigan League of Conservation Voters for two years. He’s served as chairman of the Board of Commissioners and devotes his attention to county government full time.

He says he’s likely to enter the race and will make a decision by the end of the month.

52nd House District

When Pam Byrnes first won election in 2004, she took the 52th District Democratic, and voters in outlying Washtenaw County have increasingly been ready to back Democrats. Still, Republicans like county commissioner Mark Ouimet think they have a reasonable chance of winning back the House seat.

While he’s not ready to say he’s in the race, Ouimet acknowledges that he’s considering a run and notes that in 2008 he polled about as well as President Obama in his county commission district.

Ouimet says he’s put the decision aside until after a county budget is in place, probably in November and no later than December. Other potential Republican candidates appear to be deferring to Ouimet.

However, he’s not the only county commissioner eyeing the House seat.

Democrat Ken Schwartz says he has “one foot in the water” and is meeting with voters across the district to try and gauge support. “It’s been pretty positive, but I won’t make a final decision for a couple months.”

Schwartz was elected to the county board in 2007 and represents the 2nd District, which covers the northeastern part of the county. Ouimet was first elected in 2004 and represents the 1st District, which covers northwest Washtenaw County.

If Schwartz decides to run, he’ll likely find himself in a Democratic primary. Saline Mayor Gretchen Driskell’s name regularly comes up in discussion about the seat. “I know it does and I have been thinking about it,” says Driskell. Former Byrnes primary opponent Dr. Philip Zazove, a family practitioner, is among other potential candidates.

What about Hieftje?

Ann Arbor Mayor John Hieftje says he’s been asked whether he was interested in either the Senate race or the chance to run for the House seat being vacated by Warren.

His answer: He’ll decide next month.

Although he said in 2008 that the mayoral race could be his last, Hieftje seems less ready to leave the job today. “Things are very difficult for local government in Michigan and I feel a responsibility,” he says.

Pursuing the Senate seat would presumably present a challenge for the five-term mayor, who would run up against out-county voters and their views of Ann Arbor liberalism.

In the city limits, it would mean facing Warren, who dispatched Hieftje ally and city councilmember Leigh Greden in the 2004 2006 primary for the 53rd District.

A three-way race for that House seat might favor the highest profile candidate, but Hieftje has had sufficient time in office to disappoint some city voters, and both Staebler and Irwin could be expected to run hard.

In any of the potential Democratic primaries for state office, candidates will need to differentiate themselves.

“Anyone who represents Ann Arbor is going to vote the same way,” says Irwin, “pro-choice, pro-environment, pro-human services. The question is what else do you bring to the table.”

Primaries will be held in August 2010.

Other Races

State House campaigns by Irwin, Ouimet or Schwartz would create open seats on the county board, where commissioners will be elected to each of the 11 seats for two-year terms in 2010. Any move by Hieftje or Driskell would similarly open the respective mayor’s races next year. Warren’s husband – county commissioner Conan Smith, who is also chair of the Ann Arbor Democratic Party – is among several Democrats who have previously expressed interest in running for mayor of Ann Arbor, should Hieftje decide not to run.

The House seats in the 54th and 55th districts, which take in portions of Washtenaw County, are held by term-limited Democrats as well – Rep. Alma Wheeler-Smith and Rep. Kathy Angerer. Stay tuned for a Chronicle report on those races in the near future.