The current agreement expires on Dec. 31, 2013. The new contract would extend through Dec. 31, 2018, with an option for a three-year extension. Terms of the contract include reimbursement by the university to the city for the cost of a parking referee to hear appeals, as well as other administrative costs, which will amount to $20,373 monthly in 2014 and escalate thereafter. The city will also receive $1.92 per University of Michigan ticket issued as a pass-through charge to reimburse the city its third-party vendor costs.

Ann Arbor parking violations. (Does not include University of Michigan numbers.)  (Data from city of Ann Arbor CAFR. Chart by The Chronicle.)

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

The city had also planned to build a train station at the site. The university withdrew from the partnership earlier this year, on Feb. 10, 2012. The city of Ann Arbor has continued with its planning for the rail station portion of the project, accepting a $2.8 million grant from the Federal Rail Administration on June 4, 2012 for a site alternatives analysis. That $2.8 million grant had a $0.7 million local match requirement, which the city intends to meet with funds already expended by the university and the city. The amount billed by the city to the university was part of that local match component of the FRA grant.

In the agreement reached between the city and the university, UM does not owe the $271,446 – because the university has already met its 78% share of expenses as specified in the MOU. That means the city will use part of the $307,781 that had already been included in the FY 2013 budget to cover those costs, in the event it was determined that UM did not owe the money.

Occupy UM protesters walking toward the Fleming administration building prior to the Dec. 15 regents meeting, where they protested against the high cost of public education. Flyers taped to The Cube repeated the same theme. (Photos by the writer.)

As UM president Mary Sue Coleman began her opening remarks to start Thursday’s meeting, about two dozen “Occupy UM” protesters, who’d been sitting in the boardroom, stood up and shouted, “Mic check!” For the next five minutes, in a call-and-response delivery, protesters outlined their grievances against the university’s leadership – primarily, that once-affordable public education has been turned into an expensive commodity. [A video of the protest is posted on YouTube.]

When the group finished, they left the boardroom chanting “Instruction, not construction!” Neither the regents nor Coleman responded to them or alluded to the protest during the rest of the meeting.

Another group of students gave a decidedly different performance just minutes later. The a cappella group Amazin’ Blue sang five holiday songs, prompting board chair Denise Ilitch to don a blue Santa’s hat – embroidered with “Michigan” – and sing along.

The meeting included two issues related to the Ann Arbor community and parking. During public commentary, Chip Smith of the Near Westside Neighborhood Association highlighted problems with a UM parking lot that’s surrounded by homes on the Old West Side. And in a staff memo accompanying a resolution to issue bonds for capital projects, Fuller Road Station was on the list in the category of projects that would require final approval by regents prior to being funded with bond proceeds. The regents had approved the controversial project – a joint UM/city of Ann Arbor parking structure, bus depot and possible train station – in January 2010, but a formal agreement between the city and university has not yet been finalized.

Other items on the Dec. 15 agenda included: (1) presentations by three UM faculty who were named MacArthur Fellows this year; (2) approval of the Michigan Investment in New Technology Startups (MINTS) initiative; and (3) approval of several renovation projects, including work on the Law School’s historic Charles T. Munger Residences in the Lawyers’ Club and the John P. Cook Building.

Occupy UM “Mic Check”

Occupy UM is one of several local groups formed since the Occupy Wall Street movement started earlier this year. [Other groups include Occupy Ann Arbor and Occupy For All – described on its website as a "merry band of roving peaceniks based in Ann Arbor."]

This Occupy UM protester read a statement to the regents that was repeated in unison by other protesters in the boardroom.

Before the regents meeting, Occupy UM held a rally at The Cube, located in the plaza next to the Fleming administration building, where the regents meet. After the rally, Occupy UM supporters entered Fleming and took seats throughout the boardroom before the start of the meeting.

The agenda begins with remarks from UM president Mary Sue Coleman, and as soon as she began speaking the protesters stood and shouted “Mic check!” – which launched the start of a technique used by Occupy protesters nationwide to propagate a message to a crowd without the aid of a microphone.

The five-minute call-and-response recitation – shouted by a leader in short phrases, and repeated in unison by the other two dozen or so protesters – sharply criticized the regents and university leaders for a range of actions and inactions that have resulted in a cost of education that’s inaccessible for many. They referred to the meeting’s agenda, saying it reflected the values of funding start-up businesses and construction projects rather than accessible education.

An excerpt:

There was once affordable public education. / Today / there is only an expensive commodity. / You sell this commodity to wealthy students. / To the rest of us you offer / a more ominous exchange: / an education / for a lifetime of student debt.

…

You endeavor to attract the richest and whitest / not the best and brightest. / You support construction not instruction. / We have another vision. / Job security and intellectual freedom / for faculty and staff; / a student body without student debt; / and a community that shatters race and class divisions / instead of reproducing them./

This university claims to be / an institution of inclusion and equality. / Our vision works for the future / when this may be true. / Your vision ensures / a public forever divided. / We reject your vision! [.pdf of full Occupy UM statement]

When they finished, the protesters continued chanting “Instruction, not construction!” as they left the room. Their chants could be heard as Coleman resumed her opening remarks, which highlighted the Dec. 18 winter commencement on Sunday, where New York Times executive editor Jill Abramson would give the keynote speech. Coleman also noted several faculty achievements, and gave well wishes for students during finals and for the UM football team at the Sugar Bowl. The meeting continued without any mention of the protesters by regents or UM executives.

However, the following day – Friday, Dec. 16 – a letter from Coleman to President Barack Obama was released, addressing the same issue of affordable education. The letter was tied to Obama’s recent meeting with university presidents at the White House, which Coleman did not attend. From the letter:

By bringing together higher education leaders to discuss college affordability, you have elevated a thorny issue that demands a national conversation because of its impact on all sectors of society. The cost of attending college is one of the most serious matters facing a country that seeks to strengthen its global competitiveness. How we resolve this dilemma requires collaboration, sacrifice and hard choices.

…

Higher education is a public good currently lacking public support. There is no stronger trigger for rising costs at public universities and colleges than declining state support. The University of Michigan and our state’s 14 other public institutions have been ground zero for funding cuts. The state’s significant disinvestment in higher education has been challenging: a 15 percent cut in the last year alone, and a reduction of more than 30 percent over the last decade.

We have worked extremely hard to mitigate the impact of these cuts on students and families. We must and will do more, but also offer recommendations that may benefit all of higher education.

Recommendations in the letter included: urging states to reinvest in public colleges and universities, asking the business community to lobby for increased government funding of higher education, increasing private support, and cutting costs.

Student, Faculty Awards

Provost Phil Hanlon gave a presentation about the various awards and other honors that UM’s faculty have received, as well as introducing and congratulating Alex Carney, a UM senior who recently was named a Marshall Scholar – one of only 36 students in the U.S. awarded the scholarship to study in Oxford and Cambridge. Carney – a mathematician, violinist and cross-country runner – received a round of applause.

Tiya Miles, chair of UM’s department of Afroamerican and African studies and a 2011 MacArthur Fellow.

After cataloguing the range of honors for UM faculty – including Guggenheim Fellowships, the Carnegie Foundation’s U.S. professors of the year, and election to the American Academy of Arts and Sciences, among others – Hanlon introduced three faculty members who had been named MacArthur Fellows this year: Tiya Miles, Melanie Sanford, and Yukiko Yamashita.

Each of the three professors spoke to the regents, describing their work and the support they’ve received at UM. Miles, chair of UM’s department of Afroamerican and African studies, talked about the interdisciplinary nature of her research, working in the program in American culture, the department of Afroamerican and African studies, the department of history, and the Native American studies program. She recalled a challenge several years ago when she was pregnant with twins and needed to take medical leave. A book she’d been working on wasn’t completed, and she said she could imagine a scenario in which she’d be left to fail. But she had wonderful department chairs, Miles said, and senior women faculty who reached out to her. Thanks to that support, her book was eventually published and received awards, and her daughters are now eight years old.

Sanford, an Arthur F. Thurnau professor of chemistry, described her work as developing new ways to make common chemicals in a more environmentally friendly fashion, with less waste. The research has potential to impact a range of industries, from pharmaceuticals to beauty products. She said she couldn’t do the work without the amazing undergraduate and graduate students that UM attracts. “That is really the strength of this university,” Sanford said. She also praised UM’s efforts to recruit and retain women in traditionally underrepresented fields, like chemistry. There’s tremendous diversity in the chemistry department, she said, making it a dynamic and exciting place to work, with fantastic research being conducted.

After Sanford’s remarks, regent Andy Richner asked how to make a plastic cup out of corn. “That’s easy,” Sanford quipped, and quickly described how to do it. She said her lab is working on ways to do this kind of thing more efficiently, with less energy.

Yamashita spoke next, saying that she’s a stem cell biologist but “that’s not as controversial as it sounds.” That is, her work uses adult – not embryonic – stem cells. The research is very, very basic, Yamashita said, using fruit flies. But it lays the foundation to find cures for degenerative diseases, for example, or cancer. She described basic research as like a baby: You don’t get rid of a baby because it can’t yet walk or talk. The university is very supportive of her work, Yamashita said. There are great mentors, she said, who know just the right amount of leash to use on junior faculty – not too much, nor too little.

Start-Up Tech Investment

A new initiative – the Michigan Investment in New Technology Startups (MINTS) was on the agenda for approval by regents at the Dec. 15 meeting. Plans for the initiative had been announced in early October by UM president Mary Sue Coleman in her annual address to campus.

Managed by UM’s investment office as well as the technology transfer office, the program involves investing in start-up companies formed using UM technology. It’s estimated that over 10 years, the program will invest about $25 million from the university’s long-term portfolio. According to a staff memo, the investments would be part of the portfolio’s venture capital sub-portfolio. A limit of up to $500,000 would be made in any single round of financing.

In addition to approval for the overall program, regents also were asked to approve guidelines for MINTS. [.pdf of MINTS guidelines]

Tim Slottow, UM’s chief financial officer, praised Erik Lundberg, the university’s chief investment officer, and Ken Nisbet, executive director of UM’s tech transfer office, for their work in putting together this program. Slottow described it as a breakthrough type of funding that doesn’t exist at any other university. With regental approval, the university will begin investing “as soon as we can,” Slottow said.

Outcome: Regents unanimously approved the MINTS initiative and guidelines.

Building & Renovation Projects

Regents were asked to approve several items related to building and renovation projects on the Ann Arbor campus, including renovations of the law school residences, an overhaul of the University Hospital’s Trauma Burn Unit, and issuance of bids for an addition to the G.G. Brown building on north campus.

Building & Renovation Projects: Law School Residences

Regents were asked to approve the schematic design for a renovation of the Law School’s historic Charles T. Munger Residences in the Lawyers’ Club and the John P. Cook Building. The residences house about 260 students and were built in the early 1920s.

Lee Becker of Hartman-Cox Architects describes the schematic design for the UM Law School residences.

Regents had previously authorized the overall project at their March 2011 meeting. That meeting had included  a unanimous vote to name The Lawyers Club dormitory in honor of Charles T. Munger, who gave the university $20 million toward renovations of the building. The March 2011 meeting also included a vote to approve a $39 million renovation of The Lawyers Club and the John P. Cook buildings – part of a larger expansion and renovation effort at UM’s law school.

Washington, D.C.-based Hartman-Cox Architects, working with SmithGroup, is handling the project’s design. Lee Becker of Hartman-Cox attended the Dec. 15 meeting and showed regents examples of the renovation work they’ve planned. Most of the work will be interior changes to the residences – such as opening up connections between the townhouse-style dorms so that hallways will run through all the units. One of the main goals is to build better community among the law school students, he said.

Becker noted that the renovations will allow the university to skip roughly $30 million in maintenance it would otherwise need to perform in the dorms. Other work will include removing the fireplaces, adding air conditioning, installing elevators, replacing the roof, restoring masonry and refurbishing leaded glass windows.

Tim Slottow, UM’s chief financial officer, mentioned that the renovations would bring the buildings up to the same energy efficiency standards as other UM facilities. Examples of specific changes addressing energy efficiency include low-flow fixtures to conserve water, insulation, energy-efficient light fixtures and thermostat setback controls in each room.

Regent Libby Maynard asked where the students will live during the renovations, which will take about 18 months and be finished in mid-2013. Hank Baier, UM’s associate vice president for facilities and operations, reported that the university is leasing space in several apartment complexes that are close to central campus.

Regent Andy Richner noted that he had lived there when he went to law school, and he supported the project. Mary Sue Coleman said she couldn’t be more pleased with the new design, calling it one of the most precious buildings in the country.

 Outcome: Regents voted to approved the renovations at the Law School dorms.

Building & Renovation Projects: Trauma Burn Unit

A $3.33 million renovation for the University Hospital’s Trauma Burn Unit was on the agenda for approval. Renovations of the roughly 6,600-square-foot facility include improved lighting for care within the patient rooms, improved treatment rooms, creation of a dedicated physical therapy and occupational therapy room, and creation of a faculty on-call room.

Project and Design Management LLC, an architectural firm based in Ferndale, will design the project. According to a staff memo, a phased construction schedule is planned to minimize disruption to operations and patient care, with construction to be completed in the fall of 2012.

Outcome: Regents approved the trauma burn unit renovations.

Building & Renovation Projects: G.G. Brown

On the agenda was an item that would authorize university staff to issue bids and award construction contracts for a $46 million addition to the  G.G. Brown Memorial Laboratories Mechanical Engineering building on UM’s north campus.

A schematic design for the 62,500-square-foot addition was approved by regents a year ago, at the board’s Dec. 17, 2010 meeting. Construction is expected to be complete by mid-2014. The addition will house research labs, and faculty and graduate student offices for emerging research areas, including bio-systems, energy systems, and nano-systems.

Outcome: The board voted to authorize the issuance of bids and the awarding of construction contracts for the G.G. Brown addition.

In addition, as an item of information, regents were presented with UM’s annual capital outlay request to the state for fiscal 2013. For the Ann Arbor campus, that request included funding for renovations of the existing G.G. Brown building – a separate project from the planned addition. At previous meetings, Tim Slottow – UM’s chief financial officer – has said that UM expects to receive $30 million in funding for the renovation as part of the state capital outlay bill. At the Dec. 15 meeting, he didn’t specify any anticipated dollar amount, but said he hopes the state will help with this project and two others at UM’s Flint and Dearborn campuses.

Long-Term Bonds

Regents were asked to authorize the issuance of up to $280 million in general revenue bonds to fund a variety of capital projects. Tim Slottow, UM’s chief financial officer, briefly introduced the item, saying that UM needs to refinance some of its existing $200 million in commercial paper and provide longer-term financing for authorized capital projects.

A staff memo included a list of projects that require financing:

• Alice Crocker Lloyd Hall renovation
• Crisler Arena expansion and renovation
• C.S. Mott Children’s and Von Voigtlander Women’s Hospitals, and related projects
• Institute for Social Research addition
• Vera B. Baits Houses II renewal
• Seven projects for the UM Hospitals and Health Centers: (1) Simpson Circle parking structure improvements; (2) University Hospital accelerator replacement; (3) University Hospital computed tomography angiography; (4) University Hospital kitchen renovations for room service protocol; (5) University Hospital medical procedure unit expansion; (6) University Hospital radiation oncology simulator replacement; and (7) University Hospital Trauma Burn Unit renovations.

In a separate category, three projects were listed as requiring final approval by regents prior to being funded with bond proceeds:

• Fuller Road Station
• UM  Hospitals and Health Centers – A. Alfred Taubman Health Care Center internal medicine renovations
• UM Hospitals and Health Centers – A. Alfred Taubman Health Care Center Levels 1 and 2 backfill renovations

Regents had approved the Fuller Road Station project at their January 2010 meeting, when they had also authorized appointing an architect. From the staff memo provided to the regents at that 2010 meeting:

The first phase of the development of this major intermodal transportation complex is the Fuller Road Station project which includes site preparation and construction of an intermodal facility that includes: four covered bus loading/unloading zones and waiting areas; a covered area for bike hoops and lockers; parking for 1,000 vehicles (78 percent for university and 22 percent for city use); improvements to Fuller Road immediately adjacent to the site for vehicle access; and upgrades to the multi-use path along Fuller Road.

The university will manage the construction of the Fuller Road Station project. That includes building the facility on city property, following city code review and inspection, and collaborating with the city for their approval of design. This project is unique since we would be constructing the facility on city-owned property and following city building codes. We will also need approval for the lease on city-owned land since it would be for a period of greater than ten years. We will seek approval of the lease at a later date, but prior to seeking bids or awarding construction contracts for the project. A parking structure operation and maintenance agreement will be developed concurrently with design of the project. The City of Ann Arbor will manage the site preparation at an estimated cost of $3,000,000. In addition, at the City’s expense, they will undertake an environmental assessment of the property. Although there will be a temporary loss of some leased parking spaces during construction, there will be an increase of approximately 780 university parking spaces as a result of this project.

The estimated cost of the project is $46,550,000. Costs will be shared between the University of Michigan and the City of Ann Arbor in proportion to the number of parking spaces available to each (78 percent and 22 percent respectively). Total university funding, not to exceed $36,309,000 (78 percent), will be provided from Parking resources. The construction cash flow may be provided, all or in part, by increasing the commercial paper issuance under the commercial paper program, secured by a pledge of General Revenues, and authorized by the Board of Regents. The parking structure consulting firm of Walker Parking Consultants will design the project. Design is scheduled to begin immediately, and we will return with a construction schedule when we seek approval of schematic design.

At that January 2010 meeting, James D’Amour – a member of the executive committee for the Huron Valley Group of the Sierra Club – spoke out against the project, objecting to it being built on city-owned property that had been designated as parkland. He and other community members have been vocal in their objections to the structure, primarily at public meetings of the Ann Arbor city council and the Ann Arbor park advisory commission – most recently at PAC’s November 2011 meeting. [See Chronicle coverage: "More Concerns Aired on Fuller Road Station"] Regents have not discussed the project at their board meetings since the January 2010 vote.

Outcome: Without discussion, regents authorized the issuance of general revenue bonds. 

Annual Lease Report

As an item of information, regents were provided with an annual report on leases held by the university that exceed 50,000 square feet. Tim Slottow, UM’s chief financial officer, noted that there was very little change from the 2010 report, made at the regents’ Dec. 17, 2010 meeting.

There are currently five leases for space over 50,000 square feet:

• 222,775 square feet at the Domino’s Farms complex, used by various UM Health System departments.
• 125,815 square feet at the KMS Building on South State Street, used by UMHS and leased from Kosmos Associates.
• 65,693 square feet at 325 East Eisenhower Parkway leased from Burlington Property LLC for use by Physical Medicine and Rehabilitation, Spine Rehabilitation and the Dental School.
• 63,920 square feet at 2301 Commonwealth Boulevard, for use by UMHS and leased from First Properties Associates.
• 51,534 square feet at 1051 North Canton Center Road in Canton, leased from Saltz Center for the UMHS Canton Health Center.

Appointment of UMHS Development Officer

As a supplemental agenda item, regents were asked to approve the appointment of Brian Lally to a newly created position: associate vice president for medical development and alumni relations for the UM Health System. Jerry May, UM’s vice president for development, told the regents that the university had been doing a search to fill this new position for more than a year, with the goal of dramatically increasing fundraising for UMHS. Lally will report jointly to May and Ora Pescovitz, UM’s executive vice president for medical affairs.

Lally most recently has served as vice president of development and alumni relations for Dartmouth-Hitchcock Medical Center and Dartmouth Medical School.

Outcome: Regents unanimously approved Lally’s appointment.

Conflict-of-Interest Items

At each monthly meeting, regents are asked to authorize items that require disclosure under the state’s Conflict of Interest statute. The law requires that regents vote on potential conflict-of-interest disclosures related to university staff, faculty or students.

The items often involve technology licensing agreements or leases. This month, the eight separate items included four research agreements, one subcontract agreement, one licensing agreement, one licensing option agreement, and one business transaction. Companies involved are: ONL Therapeutics; Emerging Micro Systems Inc.; CytoPherx Inc.; CSquared Innovations; Arbor Ultrasound Technologies; ISSYS Inc.; and Red Poppy Floral Design.

Outcome: Without comment, regents unanimously authorized the conflict-of-interest disclosures.

Student Government Report

In his regular report to the board, DeAndree Watson – president of the Michigan Student Assembly – explained the reasoning behind the organization’s upcoming name change. As of Jan. 1, the MSA will be called the Central Student Government. In 2010, students had voted to change the constitution of their student government, creating three separate branches that mirrored the federal system: executive, legislative and judicial. The legislative branch is known as the Assembly, and the overall government name was changed to distinguish itself from that branch. The name will also serve to distinguish the central student government, which represents students campuswide, with the various student governments for each school or college within UM.

Regent Andrea Fischer Newman asked Watson if he’d considered possible confusion with Central Michigan University. Watson replied that he had been part of the group that had rewritten the constitution, and that had settled on the new name. The word “Central” had been meant to signify a “central voice” for all students, he said. The only concern they’d heard about it was from one student who felt it might disenfranchise students on UM’s north campus. The official name will be the University of Michigan Central Student Government, he said.

Misc. Communications

Stephen Forrest, UM’s vice president for research, told regents that the university’s formal policies and procedures had been completed for the return of Native American human remains and associated materials in UM’s collections under the Native American Graves Protection and Repatriation Act (NAGPRA). Responding to a follow-up query from The Chronicle, David Lampe – executive director of research communications – reported that the 75-page document formally specifies details of all of the policies and procedures that UM has adopted to handle the requirements of the act. It has been submitted to UM’s Office of the General Counsel for final approval – it will eventually be posted online.

Public Commentary

During public commentary at the end of the meeting, Chip Smith introduced himself as a UM alum and donor, and a representative of the Near Westside Neighborhood Association. The association consists of 24 historic homes – all built in 1930 or earlier – that border a UM parking lot off of Krause Street, known as Lot W11, between West Washington and West Liberty. [.jpg of map showing location of the NWNA and the lot] The neighborhood group was recently formed in response to construction at the lot, which has caused issues related to noise, lighting and stormwater runoff, among other things.

Chip Smith spoke to regents about problems in a UM parking lot off of Krause Street affecting neighboring homes. He represents the recently formed Near Westside Neighborhood Association.

Smith thanked Jim Kosteva – UM’s community  relations director – for his help, and provided a handout to regents that included a Nov. 23 letter that the association had sent Kosteva about Lot W11 issues.

A packet of materials distributed to regents by Smith listed several issues related to the parking lot, including the impact of construction activities, traffic, vandalism, and a lack of communication with neighbors. One of the handouts stated that “UM Lot W11 has been a bad neighbor for 20+ years.”

During his remarks, Smith focused on two main concerns: (1) implementing best management practices for stormwater control, and (2) lighting at the lot, which is outdated and intrusive for surrounding homes.

He praised UM’s sustainability initiative, and asked regents and the administration to hold the project group’s feet to the fire in terms of implementing stormwater best management practices that the university has adopted. [Among the sustainability goals outlined by Coleman in September was this one related to stormwater: "Protect the Huron River through best-in-class stormwater control strategies and by applying 40 percent fewer chemicals to campus landscapes, and ensure that at least 30 percent of stormwater runoff does not flow into the Huron River."]

Referring to construction on the lot that’s planned in 2012, Smith said the main issue is lighting. It’s unclear whether the current lights – which Smith said are extremely bright – will be replaced, but he asked that UM staff work with representatives of the neighborhood to find an acceptable solution.

In addition to these specific issues, the problem is the way in which the residents are treated, Smith said. Of the 24 houses surrounding the lot, 21 are owner-occupied. “This is our neighborhood,” he said, adding that he looked forward to working with UM to minimize the impact of future construction. He thanked regents for the opportunity to address the board.

After Smith’s remarks, regent Larry Deitch called the presentation “refreshing” – presumably because the tone had not been combative, as is often the case with remarks made during public commentary. Regent Andrea Fischer Newman said it would be helpful if Smith could bring a map. [A map of the lot, as well as photos of that location and other UM parking lots, were part of a packet of materials distributed to regents at the start of Smith's remarks.]

Present: Mary Sue Coleman (ex officio), Julia Darlow, Larry Deitch, Denise Ilitch, Olivia (Libby) Maynard, Andrea Fischer Newman, Andy Richner, Kathy White.

Absent: Martin Taylor.

Next board meeting: Thursday, Jan. 19, 2012 at 3 p.m. at the Fleming administration building on UM’s central campus. [confirm date]

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A Santa sock worn by regent Libby Maynard at the final board meeting of 2011 was a subtle reflection of the holiday season.

Students from the Amazin’ Blue a cappella group sang Christmas carols at the Dec. 15 regents meeting.

Board chair Denise Ilitch wore a UM Santa’s hat during the performance by Amazin’ Blue. The front of the hat was embroidered with “Michigan.”

Ann Arbor city council chambers on Aug. 15, 2011. Despite appearances, the city of Ann Arbor does not currently have a balloon payment due that will put the city up against its debt ceiling. (Photo by the writer).

The city council originally gave its approval to the selection of Village Green as the purchaser of the city-owned First and Washington lot back in 2006. To make up for the fact that the First and Washington deal has not yet been finalized, on Monday the council approved a $3 million inter-fund loan from its pooled investment fund. The money is needed to pay construction bills for the city’s new municipal center.

A year earlier, in 2005, the city received a recommendation from a blue-ribbon task force to change the composition of the board of trustees for its retirement system – to a mix on the board that is less heavily weighted towards members who are beneficiaries of the system. And on Monday, the council approved the Nov. 8 ballot language that will ask voters to change the city charter, which specifies the composition of the board.

A year before that, in 2004, the city council gave direction to city staff to develop an ordinance that would regulate idling vehicles. On Monday, the city council formally received – but took no action on – a resolution from its environmental commission recommending a draft anti-idling ordinance.

Likely dating back even earlier was an agenda item that addresses a point of ongoing friction between the city and the University of Michigan: reimbursement for the costs associated with traffic control during home football games. On Monday, the council approved a resolution that sets Aug. 25 as a deadline for completing a contract that reimburses the city for those costs. Otherwise, the city administrator is directed not to provide the signs and signals operations during home games.

In other business, the council gave final approval to the reapportionment of the five city wards, which will take effect after the Nov. 8 election. The council also set the application fee for medical marijuana business licenses at $600. The city’s medical marijuana licensing legislation, approved in June, takes effect later this month. Mayor John Hieftje also announced nominations for four of the five slots on the newly-established medical marijuana licensing board.

The mayor also announced nominations to the Ann Arbor Downtown Development Authority board. Joan Lowenstein and John Mouat were nominated for reappointment, while Gary Boren, recently elected as chair of the board for the coming year, was not.

At the meeting, the DDA was also highlighted during public commentary by the owner of Jerusalem Garden, a restaurant adjacent to the construction site of the Fifth Avenue underground parking structure, which the DDA is managing. The restaurant has seen revenues drop during construction. He reiterated some of the points he’s made previously when addressing the council and the DDA board, and this time called on the council to think about how to apply lessons learned from the current situation in the future.

Economic development was also part of the council meeting in the form of a resolution the council passed that urges the Washtenaw County board of commissioners to levy a tax to fund economic development. The tax is based on Act 88 of 1913 and does not require voter approval.

The proposed Fuller Road Station maintained a presence during council proceedings in the form of public commentary, as well as a reminder from the council to the mayor that he’d previously indicated a council work session would be scheduled on the project.

Inter-fund Loan for Municipal Building

The council was asked to approve the temporary loan of $3 million from its pooled investment fund (Fund 0099) to the building fund for its new municipal center (Fund 0008), which is nearing completion. The municipal center is located at Fifth and Huron.

Inter-fund Loan: Background

The loan is needed because the sale of the city-owned First and Washington property to Village Green for its City Apartments development has not yet been finalized.

As a historical point, the city council approved the selection of Village Green as the buyer of the First and Washington property at its Aug. 10, 2006 meeting. On that occasion, Stephen Rapundalo (Ward 2) cast the sole dissenting vote.

The new municipal center’s financing plan included $3 million in proceeds from that sale. The loan from the city’s pooled investment fund will allow the construction bills to be paid.

The city’s pooled investment fund includes all eligible cash across all city funds – interest earned on the pooled funds is apportioned back to each fund based on the relative amount of cash from that fund in the pool.

The building fund will incur a cost of 1.93% annual interest on the money lent from the investment pool. According to the staff memo accompanying the resolution, on a short-term basis the inter-fund lending approach is more desirable than borrowing money from a lending institution, because of lower transaction costs, lower interest rates and no prepayment penalties.

The short-term financing strategy of lending the building fund $3 million from the pooled investment fund will not have an impact on the city’s general fund, if the land sale is finalized. However, the short-term financing strategy does not eliminate the risk to the general fund, if the land sale does not go through.

The city bonded for about $47 million for the municipal building project. The yearly bond payments of $1.85 million can be broken down roughly as follows: $508,000 in TIF (tax increment finance) capture pledged by the Ann Arbor Downtown Development Authority; $490,000 in revenue from antenna rights; $455,000 in elimination of leases for space at other locations; $175,000 in elimination of utilities for leased space; $225,000 pledged by the 15th District Court facility fund.

The council had been advised by interim city administrator and chief financial officer Tom Crawford at its Aug. 4, 2011 meeting to expect some kind of short-term financing proposal on the Aug. 15 agenda. And more than a year earlier, at a city council work session in April 2010, the council discussed the city’s contingency plan of taking out short-term financing in the event the land sale did not materialize.

With respect to the land sale, at its Aug. 4 meeting, the council extended a purchase option agreement with the developer Village Green for the First and Washington site, where the developer plans to build Ann Arbor City Apartments. It’s a 9-story, 99-foot-tall building with 156 dwelling units, which includes a 244-space parking deck on its first two stories.

The land deal was originally set at $3.3 million, but was reduced by the council at its June 6, 2011 meeting to $3.2 million. The reduction in price approved at the council’s June 6 meeting was based on a “bathtub design” for the foundation that is intended to prevent water from ever entering the parking structure, eliminating the need for pumping water out into the city’s stormwater system. However, the Aug. 4 purchase option extension came with a charge by the city to Village Green of $50,000.

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

According to the staff memo accompanying the Aug. 4 resolution, Village Green still hopes to break ground on the project in the 2011 construction season.

As a historical point related to the planned use of the sale proceeds for the new municipal center construction, the council defeated a resolution on March 17, 2008 to extend the Village Green purchase option agreement for First and Washington. At the council’s following meeting, on April 7, 2008, the measure was brought back for reconsideration, and the council voted unanimously to extend the agreement. The key difference was the addition of a “resolved clause,” which stated: “Resolved, that the proceeds from this sale shall be designated to the general fund, Fund 010.”

Inter-fund Loan: Council Deliberations

Mike Anglin (Ward 5) confirmed with the city’s chief financial officer and interim city administrator Tom Crawford that the $3 million loan transfer was part of the municipal center construction cost. Anglin asked why the city would not simply look to the general fund itself to cover the cost. Crawford explained that approach would result in a lower investable fund balance in the general fund, which would be a detriment to the general fund.

The financing the city is proposing, Crawford said, is structured so as not to be a detriment to the general fund. It’s the building project fund that pays the interest, he said. Sabra Briere (Ward 1) characterized the financing essentially as establishing a line of credit. Crawford confirmed that the investment pool is reinvested and reevaluated on a daily basis.

Outcome: The city council voted unanimously to approve the inter-fund loan to the municipal center building fund from the city’s pooled investment fund.

Charter Amendment: Retirement Board Composition

The council considered a resolution to place before voters on Nov. 8 a charter amendment to alter the composition of the board of trustees for the city’s retirement system.

Retirement Board Composition: Background

The composition of the nine-member body as currently set forth in the charter is as follows: “(1) The City Administrator and the Controller to serve by virtue of their respective offices; (2) Three Trustees appointed by the Council and to serve at the pleasure of the Council; (3) Two Trustees elected by the general city members from their own number (general city members being members other than Policemen and Firemen members); and (4) Two Trustees elected by the Policemen and Firemen members from their own number.”

The proposed change would retain nine members but would distribute them differently: (1) the city controller; (2) five citizens; (3) one from the general city employees; and (4) one each from police and fire.

If the measure passes on Nov. 8, it will still need to be ratified by the city’s collective bargaining units in order to take effect.

In 2005, a “blue ribbon” commission – tasked to make recommendations about the city’s retirement board and the city’s pension plan – had called for a change in the board’s composition to be a majority of trustees who are not beneficiaries of the retirement plan and, in particular, to remove the city administrator’s position from the board.

In 2008, a member of the retirement system’s board of trustees, Robert N. Pollack, Jr., resigned from the board in part due to the city’s failure to enact recommendations of the blue ribbon panel. [.pdf of blue ribbon panel report] [.pdf of Pollack's resignation letter]

Under the terms of new city administrator Steve Powers’ contract, he will not be a beneficiary of the city’s retirement plan, but will instead have a 401(a) plan.

The city’s retirement program is supported in part by the levy of a retirement benefits millage [labeled CITY BENEFITS on tax bills], currently at a rate of 2.056 mills, which is the same rate as the city’s transit millage. A mill is equal to $1 for every $1,000 of a property’s taxable value.

Retirement Board Composition: Council Deliberations

Marcia Higgins (Ward 4) introduced the proposed ballot language asking voters to amend the city charter and described how the state attorney general’s office – after back and forth with the city – had provided approval of the ballot language at 4:55 p.m. that day.

Stephen Rapundalo (Ward 2) scrutinized the proposed ballot language, which resulted in single word deletion from the language [deleted word indicated with strikethrough]:

For the purpose of adding two additional citizen trustees, removal of the City Administrator as a member of the Board, and decreasing the number of elected general member trustees, shall Section 17.2 (a) of the Charter be amended to restructure the composition of the nine-member City Employees Retirement Board of Trustees to a membership of 5 appointed citizen trustees, one elected trustee each for general City general members, fire members, and police members, along with the continued membership of the City Controller?

Based on the interaction between Rapundalo and assistant city attorney Mary Fales, the inclusion of the first instance of “general” was erroneous. It was stricken as an administrative amendment on which the council did not vote.

Tony Derezinski (Ward 2) wanted to know what the nature of the issue was that had caused the delay in the attorney general review. Higgins explained that it had to do with the terminology of “chief financial officer” versus “controller.” Higgins thanked the city attorney’s office staff for its work, which Rapundalo echoed.

Rapundalo noted that the issue had been going on for a number of years. The change to the charter should go a long way to establishing a board that has a little bit more independent oversight, he said. And by virtue of that, it would provide more transparency and reduce the perception of conflict of interest for those sitting around the retirement board table, he said. Higgins added that the city’s unions will need to ratify the language as well, even if the charter amendment passes.

Outcome: The city council voted unanimously to approve the placement of the retirement board charter amendment on the Nov. 8 ballot.

Anti-Idling Law?

Although it originally appeared in the slot designated for board/commission-initiated business, an anti-idling item was moved on the agenda to the section for written communications from the city administrator. The council formally received the communication from its environmental commission: a resolution approved by the commission in February 2011 that refers a draft anti-idling ordinance to the city council. The ordinance would aim to reduce instances of unnecessary idling by internal combustion engines of all types when not “doing work.”

The resolution approved by the city’s environmental commission makes reference to the city council’s direction to city staff to develop the ordinance, but does not mention the date when the council passed a resolution giving that direction – July 6, 2004.

Examples of unnecessary idling cited in the draft resolution are “warming up a vehicle, dropping off or picking up children at school, loading or unloading cargo, pulling over to take a cell phone call, or waiting in line at a drive-thru window.” However, the draft ordinance explicitly exempts “vehicle queues for drive-through goods and services.” [.pdf of whitepaper including draft ordinance]

Councilmembers addressed the issue during one of the communications slots on the agenda. Margie Teall (Ward 4) thanked Sabra Briere (Ward 1) for tracking down the resolution passed by the council seven years ago that gave direction to city staff to develop an ordinance. It had gone to the city attorney’s office and other city staff, including the city’s environmental coordinator Matt Naud, and back to the environmental commission.

Teall, who serves on the environmental commission, observed that the item had accidentally landed initially on the wrong part of the agenda – but said that the communications items are often overlooked. Teall noted that it’s the city environmental commission’s resolution and the city council will be looking at it in the near future. Teall said she’d welcome comments and discussion and perhaps a city council working session on it.

Teall invited Naud to the podium. He described how 50-100 cities have such an ordinance. He traced Ann Arbor’s effort on the topic to a resident of The Armory – a residential development at Fifth and Ann streets – who was concerned about school buses idling in front of the Hands-On Museum. The museum is immediately adjacent to The Armory. Naud allowed that it had taken a long time (since 2004), but reported that the city had also accumulated a lot of good data. He suggested that this was now an occasion to open up a community discussion.

Outcome: The city council did not take any action on the item – it was ultimately listed on the agenda as simply a communication from the city administrator.

University of Michigan Football Traffic Controls

Before the council for its consideration was a resolution stating that no traffic controls for University of Michigan home football games will be provided starting this season, unless the university reimburses the city for costs associated with erecting barricades and changing traffic signals to facilitate efficient movement of traffic.

University of Michigan Football Traffic Controls: Background

The cost of providing these signs and signal services is around $100,000 per year. The university already reimburses the city for police and fire services associated with home football games.

From the resolution: “Resolved that the City Administrator shall not provide Signs and Signals services to UM for Special UM Events unless: UM and the City execute a contract prior to August 26, 2011, that provides for the full reimbursement to the City of all direct and allocable costs associated with the provision of Signs and Signals services to UM for Special UM Events.”

Michigan’s home opener this year, against Western Michigan, falls on Sept. 3.

Left to right: interim city administrator Tom Crawford, Marcia Higgins (Ward 4) and Christopher Taylor (Ward 3).

The issue is a persistent point of frustration on the city council, because traffic control for football games is a dollar cost to the city, but the city has limited leverage with the university to extract payment. That’s due in part to the fact that traffic control is seen not as merely a matter of convenience, but rather of public safety.

From a March 2010 city council budget work session report: “Christopher Taylor (Ward 3) asked how much of [football traffic control] was an issue of convenience versus public safety. Chief of police Barnett Jones stated that it was all safety-related. Without the combination of cars, barricades and signals, he said, ‘it would be a major malfunction.’”

From a January 2011 city council budget retreat report: “Some councilmembers seemed to suggest that concessions from the university could be won by withholding city consent when the university wanted something from the city. The university’s desire to include Monroe Street as part of the UM Law School campus was cited as a specific example. [City administrator Roger] Fraser, though, counseled that each situation should be evaluated unto itself. He pointed to the planned Fuller Road Station as an example of the importance of that principle.”

From a March 2011 city council budget work session report: “Responding to councilmember questions, [public services area administrator Sue] McCormick said the city did not send the university invoices for the regular home football games, because the university has made it clear that it will not pay. McCormick said when she’d notified UM of the city’s intention of invoicing for the Big Chill, the response she gotten was, ‘We really don’t know how we’ll fund that.’ There was little recourse for the city to take, she said, and in the end the city would have to write it off.”

University of Michigan Football Traffic Controls: Council Deliberations

Christopher Taylor (Ward 3) introduced the resolution, acknowledging that it had been added late to the agenda. By way of explanation for the lateness, he offered the fact that the city and the university had been involved in ongoing conversations that were progressing well, but he hoped the resolution would improve things. He noted that football Saturdays are “a very big deal” for the university and the city community.

Taylor went on to say that the city cooperates with the university to ensure the efficient and safe operation of large university events. It includes police and fire services as well as traffic management services. The costs for the police and fire services are reimbursed by the university, he explained. However, up to now, the traffic management services have not been reimbursed. The city is currently having a conversation about the university’s possible reimbursement of the traffic control costs, Taylor said.

In every good conversation, Taylor continued, it’s sometimes useful for there to be clarity about the position of the parties, and the resolution was intended to provide that clarity.

Tony Derezinski (Ward 2) expressed concern about the timing. He asked for clarification about the time pressure, given that the football season was fast approaching. Taylor said the conversations had been progressing well, but there was some lack of clarity about whether the city will continue to provide traffic control services in the absence of reimbursement.

Margie Teall (Ward 4) then stated that UM can contract with some other organization to provide the service. However, interim city administrator Tom Crawford made clear that’s not actually the case, saying that police and fire services are already reimbursed and that the signs and signals work involves the city’s staff, working with city assets – it can’t really be done by some other organization.

Crawford went on to say that other communities sometimes contacted the city to learn how the city manages to provide the level of services it does provide in connection with football crowds. [Michigan Stadium, located at Main and Stadium with a capacity of 109,901, is the largest in the country.]

Mayor John Hieftje said that the proliferation of games has made it a real burden on the city staff and he felt it was appropriate to have a contract.

Sandi Smith (Ward 1) brought up another point for clarification – was this a matter of looking forward, or also about asking the university to pay for past years of traffic controls? Crawford said he was in the middle of fruitful discussions that included last year as well as upcoming years. He called it an issue that still needs to be resolved.

Outcome: The city council voted unanimously to approve the resolution that directs the city administrator not to provide traffic controls for university football games, unless the university agrees to reimburse the city’s costs.

Ward Boundary Changes

The council considered final approval to minor changes in the apportionment of its five city wards, made in response to population changes revealed by the 2010 census. The changes will not take effect until after the Nov. 8 general election. According to the city charter, city wards must have the general shape of a pie-shaped wedge, with centers of the tips lying at the center of the city. The council had given the boundary changes initial approval at its Aug. 4 meeting.

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

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

The staff-recommended tweaks, given initial approval at the Aug. 4 meeting, showed minor differences from the changes recommended on July 5. All changes involve the way the tips of the pie-shaped wedges come together.

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

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

Ward Boundary Changes: Public Hearing

Because the ward boundary changes reflect a change to the city’s ordinances, a public hearing was required.

Only one person spoke. Thomas Partridge called on the council to take into account the socio-economic status of residents in the reapportionment of the wards. Is there anyone on the council who represents the middle class of Ann Arbor? he asked. Are there students or disabled people who come from lower income brackets? He called on the council to give additional consideration to how each ward is represented. He suggested having an at-large representative on the council.

Ward Boundary Changes: Council Deliberations

Mayor John Hieftje asked that someone explain what was going on and why the reapportionment was happening. Sabra Briere (Ward 1) explained that the 2010 census showed that Ward 1 gained population since the previous census in 2000, relative to the other four wards. The easiest way to restore the balance was to look at the densest part of the city near the downtown.

Each boundary is changing, but only slightly, Briere said, and in the end all five wards are all close to balance. Hieftje elicited from the city clerk, Jackie Beaudry, that residents in affected areas, whose wards are changing, would by law receive a new voting card. Briere reminded everyone that the new boundaries don’t become effective until after the Nov. 8 election – on Dec. 1.

Outcome: The city council voted unanimously to give final approval to the ward boundary changes.

Medical Marijuana License Application Fees

A resolution was on the agenda to establish an application fee of $600 for licenses to operate a medical marijuana dispensary in the city. The fee covers a total of approximately nine hours of work by staff in the city clerk’s office, police department, planning department, and the attorney’s office.

Sabra Briere (Ward 1) talks with Dennis Hayes before the city council's Aug. 15 meeting started.

The licenses were established by a city ordinance given its final approval at the council’s June 20, 2011 meeting. The ordinance distinguishes between an “application fee” and a “license fee.” The license fee, according to the city’s ordinance, is to be reviewed by a licensing board, with members to be appointed by the mayor.

The ordinance becomes effective Aug. 22, which is 60 days after its date of legal publication, on June 23. Applicants who were already in business before the city council enacted its Aug. 5, 2010 moratorium have 60 days after the effective date to apply for a license.

The city’s communications to this point with prospective applicants has not been perfectly smooth. A letter sent out by Wendy Rampson, head of planning for the city, was met with objections because of the city’s insistence that “proof” be provided that a business was in operation before Aug. 5, 2010 – beyond an affidavit attesting to that effect. The city’s ordinance appears to empower the licensing board, not staff in the city attorney’s office or the planning department, with evaluating the merits of license applications.

Medical Marijuana Application Fees: Public Commentary, Hearing

Dennis Hayes addressed the council at Monday’s meeting, having appeared around a dozen times over the course of the last year as the council debated the medical marijuana ordinances. Hayes told the council it was nice to be back again. He said he appreciated how the city council had responded quickly to questions about implementation of the law. He encouraged the council to approve the fee, noting that the city would incur substantial expenses any time there’s something new. He felt the Ann Arbor law would be a productive example for the rest of the state.

During the public hearing on the fee, Thomas Partridge spoke in favor of placing restrictions on access to medical marijuana.

Medical Marijuana Application Fees: Council Deliberations

During the scant council deliberations, Sabra Briere (Ward 1) stressed that the fee the council was approving was an application fee, not a licensing fee.

Outcome: The city council voted unanimously to approve the $600 application fee for medical marijuana licenses.

Medical Marijuana: Licensing Board Nominations

Nominations to the medical marijuana licensing board were also made later at the Aug. 15 meeting: Patricia O’Rorke, James Kenyon and John McKenna Rosevear. Sabra Briere (Ward 1) was nominated as the city council representative. The five-member licensing body is to consist of one member of the city council, one physician, and three other Ann Arbor residents.

Still needed is a physician to serve on the board. The nominations will be confirmed at the council’s next meeting.

Ann Arbor Downtown Development Authority

The Ann Arbor Downtown Development Authority came up in two ways at the council’s Aug. 15 meeting. First, nominations for re-appointment to the DDA board were announced. And second, the owner of the Jerusalem Garden restaurant, Ali Ramlawi, again addressed the council about his frustration over the underground parking garage construction project, which the DDA is managing.

Ann Arbor DDA: Nominations

Appointments to the DDA board are made by the mayor, subject to confirmation by the city council. Mayor John Hieftje nominated John Mouat and Joan Lowenstein for reappointment, but Gary Boren, who was elected this July by his colleagues as chair of the DDA board for the coming year, was not reappointed. Nominated to replace Boren was Nader Nassif, a local attorney. Boren is also an attorney.

In an email sent late Monday to The Chronicle, after the nominations appeared late on the council’s agenda, Boren wrote that Hieftje had met with him a few weeks ago and at that meeting the mayor had told him he was not inclined to reappoint Boren. Boren acknowledged that he and the mayor had philosophical differences about the role of the DDA. About the decision not to be reappointed, Boren wrote that “I am disappointed, but not surprised – and not at all bitter.”

The four-year terms of all three DDA board members – Boren, Lowenstein and Mouat – had actually expired on July 31. The mayor’s appointment of Bob Guenzel to the DDA board last year also came late, after Jennifer S. Hall’s term had expired.

At the DDA’s annual meeting early this July, DDA board member Newcombe Clark provided a chance for the mayor to announce publicly any intention not to reappoint Boren, when Boren’s name was put forward as a candidate for chair of the board for the coming year. Clark asked if Boren’s term would be renewed. The mayor declined to respond to Clark’s question. From The Chronicle’s DDA meeting report of July 6, 2011:

Newcombe Clark asked if Boren’s term was being renewed – that is, would he be reappointed by the mayor to serve on the board? By way of background, outgoing chair Joan Lowenstein’s term on the board ends on July 31, 2011, as do the terms for Gary Boren and John Mouat. Boren has been a vocal proponent of the idea that the DDA is an independent corporate body and not an arm of the city of Ann Arbor.

Last year, Clark had pointedly abstained from voting in the officer elections over the lack of information about reappointments to the board. From Chronicle coverage of the July 7, 2010 DDA annual meeting:

Abstaining from each of the officer votes was board member Newcombe Clark.

Clark explained to The Chronicle after the meeting that there’d been no indication from the mayor whether the two board members whose appointments are expiring July 31 – Jennifer S. Hall and John Splitt – would be reappointed. Clark said he could thus not be certain of the full range of choices for board officers.

Splitt was reappointed; Hall was not. Bob Guenzel was appointed instead of Hall.

In response to Clark’s question this year, Lowenstein said they did not know that yet. Mayor John Hieftje, sitting at the board table, did not offer any statement about whether he planned to nominate Boren for the city council’s approval for reappointment.

At its first meeting in September, the DDA board will presumably elect a new chair. The board’s pattern historically has been to select its vice chair as the next chair. Elected vice chair in July was former Washtenaw County administrator Bob Guenzel, who joined the DDA board a year ago.

Outcome: The council will not vote on the confirmation of DDA appointments until its first meeting in September. Those appointments will presumably not include the kind of public hearings that Stephen Kunselman (Ward 3) suggested during his communications at the council’s Aug. 4, 2011 meeting. However, allocation of the 10 public commentary reserved time slots at the beginning of every council meeting gives preference to those speakers wishing to address agenda items – and the confirmations will be on the agenda.

Ann Arbor DDA: Construction Complaints

During public commentary, Ali Ramlawi reminded councilmembers that he had also addressed them last month. He’s the owner of the Jerusalem Garden restaurant, located next to the construction site of the underground parking structure being built along Fifth Avenue. He expressed frustration about reading the response by Susan Pollay, executive director of the DDA, to his previous criticisms – a response that was published in AnnArbor.com.

Ramlawi characterized Pollay as claiming that the DDA had provided trash pickup, snow removal and lighting. He said those are ordinary city functions, which the city has “delivered flawlessly” since 1987 when the restaurant opened. With respect to the snow removal, he said he had to call several times this past winter because of the build-up of snow obstructing pedestrian walkways. He felt like he was a “cop on the beat” on the corner, because he had to call and complain about trash, lighting and snow removal.

He alluded to the expense of the DDA’s wayfinding sign project, saying that for an organization that had spent $1 million on some signs, its efforts to place signage indicating that the restaurant was still open have been “poor.” Two years into the project, he said, the DDA had not delivered any kind of signage. The problem is not confined to Jerusalem Garden, he said – people come in wondering where the library and the post office are.

He asked the city council to review the situation and use this as a learning lesson. He also called for a complete review of the DDA board appointment process – noting that appointed officials were making important decisions. He concluded by saying that to give credit to the DDA for the success of downtown Ann Arbor is like giving Al Gore credit for inventing the Internet.

By way of additional background,  construction-orange-style signs about businesses have been in place in two locations in connection with the parking garage construction project since it began. At the intersection of Fifth Avenue and Washington Street, a sign placed on the left side of the street facing the one-way traffic heading south on Fifth Avenue indicates generically that businesses are open – no businesses are named. And at the next intersection of Fifth Avenue, at Liberty, a sign facing southbound Fifth Avenue traffic is placed with the names of businesses still open. No signs for eastbound or westbound Liberty Street traffic appears to have been placed.

That signage is actually required as part of a settlement agreement in connection with a lawsuit filed against the city of Ann Arbor about the project, to which Ramlawi was a party. From the settlement agreement:

Throughout the construction process, the City agrees to provide signage that directs customers to Herb David and Jerusalem Garden. Such signage will be similar to what the City has provided in the past as part of other City construction projects.

Act 88 Economic Development Tax

Before the council for its consideration was a resolution urging the Washtenaw County board of commissioners to use Act 88 of 1913 to levy a tax to support economic development in the county.

Act 88 Economic Development Tax: Background

For the last two years, the county board has levied the tax – at a rate of 0.043 mill. (One mill is $1 for every $1,000 of a property’s taxable value.) The council resolution was brought forward by Carsten Hohnke (Ward 5), Margie Teall (Ward 4), Sandi Smith (Ward 1) and Christopher Taylor (Ward 3).

Because Act 88 predates the state’s Headlee legislation, the board does not need to put the issue before voters in order to levy the tax. The county board could, by the Act 88 statute, levy such a tax up to 0.5 mills, or more than 10 times the amount it has chosen to levy the last two years.

Last year in November, the county board approved the Act 88 tax with just a six-vote majority on the 11-member board. Kristin Judge, Mark Ouimet and Wes Prater dissented. Jessica Ping abstained, and Rolland Sizemore Jr. was absent from that Nov. 3, 2010 meeting.

For 2011, the allocation of the roughly $611,266 raised by the countywide Act 88 tax broke down as follows: $200,000 to Ann Arbor SPARK; $50,000 to SPARK East; $100,000 to the Eastern Leaders Group; $144,696 to the county’s department of economic development and energy; $15,000 to fund a Michigan State University Extension agricultural innovation counselor for Washtenaw County; $27,075 to fund horticulture programming for the Washtenaw MSUE horticulture educator; $59,229 for 4-H activities, including allocation to the Washtenaw Farm Council for operating the Washtenaw County 4-H Youth Show & 4-H agricultural programming for the 4-H extension educator; and $15,000 to support the work of the Food System Economic Partnership (FSEP).

SPARK is also supported by Ann Arbor taxpayers through a contract with the city of Ann Arbor for business development services. At its June 20, 2011 meeting, the city council authorized the city’s annual $75,000 contract with SPARK. That translates to the rough equivalent of 0.017 Ann Arbor city mills. (Each mill levied within the city of Ann Arbor translates to roughly $4.5 million.) Together with the countywide Act 88 millage, direct Ann Arbor taxpayer support of economic development translates to the equivalent of at least .06 mills (0.043 + 0.017) or roughly $270,000.

Ann Arbor SPARK is also the contractor hired by the city’s local development finance authority (LDFA) to operate a business accelerator for the city’s SmartZone, one of 11 such districts established in the early 2000s by the Michigan Economic Development Corp. (MEDC). The SmartZone is funded by a tax increment finance (TIF) mechanism, which in the current fiscal year captured around $1.4 million in taxes from a TIF district – the union of the Ann Arbor and Ypsilanti Downtown Development Authority districts, though revenue is generated only in Ann Arbor’s district. The specific taxes on which the increment since 2002 is captured are the school operating and state education taxes, which would otherwise be sent to the state and then redistributed back to local school districts.

Act 88 Economic Development Tax: Council Deliberations

Christopher Taylor (Ward 3) introduced the resolution. He noted that the question of whether to levy the tax will soon be before the county board of commissioners. [A public hearing on the millage is set for the board's Sept. 7 meeting.] Taylor portrayed the millage as costing the owner of a $250,000 house about $5.38 a year. He encouraged the council to support the resolution, in light of the utility of the money that the millage would generate countywide.

Carsten Hohnke (Ward 5) echoed Taylor’s sentiments. He also noted that the county had recently reorganized itself by merging three departments, including its economic development department. The merger will present a greater challenge to the county staff, Hohnke said, but it will be able to leverage the Act 88 millage that much more efficiently. He mentioned the idea of promoting heritage tourism.

Sabra Briere (Ward 1) asked what happens if the county board doesn’t approve the levy of the millage. What are the effects on economic development at the county level if it doesn’t pass? she asked.

Expressing some hesitancy, Hohnke said he didn’t know, but offered some thoughts. The millage brings in around $600,000 and is deployed in a number of ways in partnership with other organizations, including Ann Arbor SPARK. In some activities, Hohnke said, it’s the county that takes the lead, and he ventured that you’d see a scaling back of those activities if the millage were not levied.

Outcome: The city council voted unanimously to adopt the resolution urging the county board’s passage of the Act 88 millage.

West Park: Flooding, Tennis Courts

Councilmembers heard from a resident about flooding related to a stormwater project in West Park, and they used the occasion of a construction contract for tennis courts in the park to talk about some of those concerns.

West Park: Public Commentary on Flooding

During public commentary at the start of the meeting, Daniel Marano introduced himself as a resident who lives on the west side of town, on Maple Ridge. He reported a severe flooding problem on his street that he said seems to be tied to the engineering failure of the West Park drainage and stormwater system.

Maple Ridge, looking south.

By way of background, the city undertook major renovations to West Park using federal stimulus funds and revolving loans facilitated by the county’s water resources commissioner. [Chronicle coverage: "West Park Renovations Get Fast-Tracked"]

In February 2011, Craig Hupy – head of systems planning for the city of Ann Arbor – reported to the park advisory commission on the status of a failed swirl concentrator, which had collapsed, and seven other swirl concentrators that were in some state of failure.

Swirl concentrators are underground vessels that help remove particulates from stormwater before it flows into the stormwater system. Based on an August 2011 city staff memo, the situation is being analyzed as a problem with both the project design and the product’s manufacture. The city is expecting to recover costs from multiple parties. The memo acknowledges upstream flooding that was experienced during project construction, which took place during the summer of 2010:

During the construction of the project, flooding was experienced upstream of the work area during one of the several large storms experienced in the summer of 2010. In addition, in October of 2010, after the stormwater work had been completed, one of the swirl concentrators on the north branch collapsed, creating a sinkhole near the northwest corner of the park. … In response to the upstream flooding, the weir plates that served to divert flow into the swirl concentrator units were removed due to concerns over their effect on upstream flooding. … Currently, the weirs are still removed, leaving the below ground sewer system to function essentially as it did prior to the 2010 construction,

The street where Marano lives is upstream from West Park – Maple Ridge runs north-south, parallel to (and one block west of) Seventh Street, which is West Park’s western boundary.

Marano described a phenomenon where a collection of several feet of water appears out of nowhere, lasts for about an hour or so, followed by a “catastrophic emptying” of the entire street. It’s like two giant bathtub drains, he said, that drain the street in a matter of minutes. There’s a real possibility of danger to people, pets, and children, he said. He said he had about a foot of water in his car on Tuesday morning, which is when he realized the extent of the flooding. This type of flooding has never happened before in any neighbor’s memory, he said. The first time it happened was last year, on Aug. 10, 2010.

Marano said that when he’d reported it to the city, he was met with derision, and the claims were ignored. It’s a lot more than just standard runoff, he said. He concluded by saying it’s a safety risk.

West Park: Tennis Courts

Before the council for its approval was a $216,331 contract with ABC Paving Co. to renovate the tennis courts at West Park. It’s a contract that the city’s park advisory commission had discussed at its June 21, 2011 meeting and that had been approved by the city council at the council’s July 5, 2011 meeting. However, the resolution had contained a typographical error, and the contract had only been approved for $166,331. So it was back before the council for re-approval.

The council did not discuss the paving contract. However, Carsten Hohnke (Ward 5) and Mike Anglin (Ward 5) expressed their concern about the West Park stormwater renovations that had been raised during public commentary by Daniel Marano. [The tennis courts at West Park are situated off Huron Street, considerably above the plane of the park where the stormwater improvements were undertaken.]

Hohnke stressed that the contemporaneous flooding and construction work events were not conclusive with respect to establishing a cause-and-effect relationship. However, he allowed that the timing was suggestive of such a relationship, and he asked that the interim city administrator look into the issue. Anglin expressed his hope that a good resolution to the issue could be found and acknowledged the stress on the residents who live in the affected area.

The flooded neighborhood is in Ward 5, which Anglin and Hohnke represent.

Outcome: The council approved the contract with ABC Paving Co.

Fuller Road Station

Fuller Road Station was brought up during public commentary, as well as by councilmembers.

Fuller Road Station: Public Commentary

Nancy Shiffler spoke on behalf of the Huron Valley Group of the Sierra Club. She said that on reviewing a recent letter sent to the community by mayor John Hieftje, she was pleased that the letter attempted to address questions that have arisen about the project. She first reiterated her basic objection of using a portion of Fuller Park for the construction of a parking structure.

She noted that the letter indicates the University of Michigan will pay all upfront costs for the construction and that the city’s portion of the cost would be made up over time. [The memorandum of understanding between UM and the city on the planned Fuller Road Station specifies a 78%-22% split for the cost-sharing arrangement.]

The portion of the mayor’s letter to which Shiffler was referring reads:

Although the University of Michigan and the City of Ann Arbor will share usage of the parking structure/bus station portion, the University will pay almost all upfront costs to construct Phase 1 of the Fuller Road Station. Under the plan that is still being worked out, the City will own FRS and the City’s portion of the costs will be made up over time from funds generated by parking spaces.

Based on earlier estimates, she said, the city’s portion to be made up over time would be around $10 million. With 220 parking spaces available for the city’s use, and depending on the users to whom the spaces are allocated, Shiffler estimated that it would take 30 years to repay the $10 million – if the rate for use of those 220 spaces were charged at the maximum rate used by UM in its parking system.

Later in the letter, Shiffler noted, Hieftje states that revenues from user fees for the parking spaces would go to the park system. Will the revenue go to make up for the upfront construction costs, or rather to the park system? Shiffler pointed out this is not clear. She said it appeared the sources of funding are being cobbled together behind the scenes. She wondered what relevance the parking structure has to the rail station. She asked that the city council have all details and disclose them to the public and have public hearings before taking a vote on the project.

Fuller Road Station: Council Commentary

During council communications, after the public commentary, Sabra Briere (Ward 1) noted that the council had heard from a speaker about Fuller Road Station. She allowed that it was a moving target, but said she wanted to remind the mayor that everyone would benefit from a working session on the topic of Fuller Road Station. Hieftje said that as soon as there’s some new information, a working session could be put together.

Previously, at the council’s June 6, 2011 meeting, Fuller Road Station had received extensive public commentary, despite the lack of any item on the agenda related directly to the project.

Partly in response to that commentary and to remarks from Mike Anglin (Ward 5), at that meeting Briere had pushed for a city council working session on the project. From The Chronicle’s report of that meeting:

Sabra Briere (Ward 1) anticipated mayor John Hieftje’s reaction to Anglin’s comments [Hieftje has pushed hard for the project] by telling the mayor that she knew he had a lot of thoughts about Fuller Road Station. But she thought the council should have a working session, so that councilmembers can become more knowledgeable about the issue. Hieftje indicated that he would look into adding something to the calendar.

Then, at the council’s June 20, 2011 meeting, the council revised its calendar for the year to include a work session scheduled for July 11, apparently to accommodate the desire to discuss Fuller Road Station.

Mayor John Hieftje. That kind of hammer, or course, works on a totally different kind of nail.

However, at the council’s July 5 meeting, Hieftje responded to remarks from Mike Anglin (Ward 5) about the upcoming work session on Fuller Road Station by indicating there was no work session on the topic scheduled. He did not acknowledge his earlier explicit assurance that he would look into scheduling one.

At the Aug. 15 meeting, Anglin said he was glad Shiffler had brought up the issue of the parkland. He said he still had concerns about the status of the parkland and that he continued to receive emails about it. He said that in 2008, when voters approved a charter amendment requiring a voter referendum on the sale of any parkland, they thought they were protecting their parks. The legacy of the parks is an important part of the community, Anglin said. When a national environmental group [the Sierra Club] is speaking against it, he said, that should suggest something is amiss.

Anglin said the details are not yet clear enough to sign a contract. During tough times, he said, there are other needs that are more paramount. The project doesn’t seem to have much benefit for citizens, he said.

Sandi Smith (Ward 1) suggested that the city’s park advisory commission take a look at the practice soccer field adjacent to the proposed Fuller Road Station site and perhaps partner with the public art commission to develop something for that space that’s designed to inform people about the Huron River.

Smith said she’d love to see an exploration of some lower-maintenance use of the land that people can enjoy. She asked that the suggestion be conveyed to PAC by the council representatives to that body. Smith mentioned an upcoming RiverUp! event, which Hieftje said he appreciated. He noted that the Wolfpack group of the National Wildlife Federation, of which he is a member, had raised $30,000 for that project. [PAC had been briefed about the project at its July 2011 meeting. See Chronicle coverage: "RiverUp! Focuses on Revitalizing Huron River"]

Green Communities Grant

The council was asked to consider accepting a $50,000 Michigan Green Communities Planning grant from the Michigan Dept. of Natural Resources and Environment (DNRE).

The money will be used in part to enhance a peer learning network of Michigan local government and university staff who are working on sustainability issues. The grant funding also supports holding an annual conference in 2011 and 2012 among Michigan Green Community members. A third activity the grant will support is development of challenge grant opportunities with local governments and Michigan foundations.

Outcome: The city council voted unanimously to approve the receipt of the grant.

Small Claims Policy

On the council agenda was a resolution to approve a policy describing which city staff may represent the city in small claims court and under what circumstances. Small claims issues are limited in dollar amount to $3,000. Under Act 236 of 1961, the city may not be represented in small claims court by an attorney.

So under the policy, city employees who are not attorneys may appear on the city’s behalf, subject to the constraints of the policy, which requires that employees who appear in small claims court have “… direct and personal knowledge of the dispute” and that the city administrator and the city attorney approve in writing the appearance by an employee in small claims court on behalf of the city, for each individual case.

Outcome: The city council voted unanimously to approve the small claims policy.

Water Supply Bonds

Before the council for its consideration was the issuance $7 million worth of revenue bonds for its water supply system. The money will be used by the city to finance improvements to the city’s water distribution system, including portions of the Arbor Oaks subdivision water mains replacement project, the Catherine Street 16-inch water main, the Dover Court/Collingwood water main replacement, physical security enhancements, and Barton Dam concrete repair projects.

Assistant city attorney Abigail Elias explained at the meeting that because the ordinance does not change the city code, it does not require a second reading and public hearing.

Outcome: The city council voted unanimously to approve the issuance of the water supply bonds.

Recision of CUB Requirement

The council was asked to vote on the recision of a resolution passed at its Nov. 16, 2009 meeting, which required execution of Construction Unity Board (CUB) agreements by contractors and subcontractors with the Washtenaw County Skilled Building Trades Council as a condition of award for all city construction contracts. The resolution also required inclusion of the requirement in all construction bids issued by the city.

The resolution was rescinded because Act 98 of 2011 – which became effective July 19, 2011 – prohibits municipalities from including as a requirement in a construction contract anything that would either require or prohibit contractors from entering into agreements with collective bargaining organizations. The act also prohibits discrimination against contractors based on willingness or non-willingness to enter into such agreements.

At the council’s Aug. 4 meeting, interim city administrator Tom Crawford had alerted councilmembers that they would likely be asked to consider the measure at the Aug. 15 meeting.

The item was included as part of the council’s consent agenda – a collection of items on which the council votes “all in one go,” but councilmembers have the option of separating out any items they’d like to discuss separately. That’s what Tony Derezinski (Ward 2) did with the CUB agreement item. He had sponsored the original resolution that was being rescinded.

He noted that the new law prohibits CUB agreements  so the city’s previous action would be illegal. That’s why it’s in the city’s best interest to rescind it, he said, because it brings the city in line with state law.

Outcome: The city council voted unanimously to rescind its previous resolution on CUB agreements.

Pedestrian Easement on Liberty

The council was asked to grant an easement to the owner of 115 W. Liberty St. – Dotcom 115 LLC, which lists its resident agent as local developer Peter Allen. Cost of the easement was set at $2,500.

Local developer Peter Allen and Ann Arbor public art commission chair Marsha Chamberlin, talking before the Aug. 15 council meeting started.

Allen is planning to sell the third floor condo unit in the building and needed the easement to ensure legal access to the entryway on the south side of the building.

Allen attended the meeting – he was also the recipient of a Golden Paintbrush Award presented by Ann Arbor’s public art commission.

Outcome: The city council voted unanimously to approve the easement.

Rezoning of Annexed Property

Before the council for its consideration was a request to rezone the property at 2562 Newport to R1A (single-family residential district.) At the public hearing, Thomas Partridge called on the council to amend the rezoning to require an equal amount or more of affordable housing access in the city. It’s something that Partridge typically calls on the city council to do, any time there is a public hearing on a rezoning of land.

Mayor John Hieftje expressed some irritation with Partridge by saying that Partridge was aware that the property is being annexed into the city and that the kind of resolution he was suggesting could not be done legally.

Outcome: The council voted unanimously without discussion to approve the annexation-related rezoning.

Communications and Comment

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

Comm/Comm: Remembering Gary Lillie

Tony Derezinski (Ward 2) called the council’s attention to the recent death of Gary Lillie, a Vietnam War veteran and a local realtor who was killed by an alleged drunk driver. He called it one of those tragedies that reminds us of the tender nature of life. He said that Lillie deserved a moment of recognition at the city council meeting for the life he gave and the life he lived.

Comm/Comm: Golden Paintbrush Awards

At the start of the meeting, Marsha Chamberlin presented the Ann Arbor public art commission’s Golden Paintbrush awards. Chamberlin, who chairs the public art commission, is also president of the Ann Arbor Art Center.

In August in front of Blimpy Burger, which received a Golden Paintbrush award: 'sno bears now, but Snow Bears later.

The awards had been previously announced at the most recent meeting of AAPAC in July.

This year, winners are: (1) Krazy Jim’s Blimpy Burger, for the Snow Bears sculptures that Rich Magner builds each winter in front of the business at Packard and South Division; (2) Mary Thiefels and TreeTown Murals for the mural outside the Alley Bar along West Liberty; and (3) Peter Allen & Associates, for rock sculptures on North Main Street, a project initiated by Steve Zobeck.

Comm/Comm: Sidewalks

During public commentary time, Kathy Griswold told the council that based on a Craigslist ad, a school crosswalk guard costs $30/day plus benefits, or $5,400 annually. She said that the money would be better spent on other activities. Griswold has long advocated for moving the mid-block crosswalk in front of King Elementary School to the four-way-stop intersection, which would eliminate the need for a crossing guard at that location. The barrier to moving the crosswalk is the need to construct a section of sidewalk that would link the corner where children would cross to a path leading the rest of the way to the school.

On a positive note, Griswold said, she reported that although nothing had been promised, it was possible that the city might be able to provide an alternate location for the Kiwanis Club’s warehouse sale [now located at 415 W. Washington St. instead of the current location W. Ellsworth at Airport Blvd Building #837].

Comm/Comm: Recall Snyder

Thomas Partridge spoke during public commentary time, saying it’s necessary to pursue the recall effort of Gov. Rick Snyder and the leaders of the Republican legislature, who have “turned and glowered into the faces” of people who need vital services. He also called on President Barack Obama to do something or step aside. We need to protect Ann Arbor’s disabled residents and seniors, Partridge said. We need an agenda for progress, he said – housing, transportation, healthcare and education should all be affordable.

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

Next council meeting: Tuesday, Sept. 6, 2011 at 7 p.m. in the second-floor council chambers at 301 E. Huron. [confirm date]

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