The real race for Ann Arbor's city council and Mayor is the Democratic Primary in August. Jane Lumm's (Independent, Ward 2) ousting of incumbent Stephen Rapundalo (D, Ward 2) is a notable exception to this trend. This is not to say that Democratic candidates for the Ann Arbor City Council and Mayoral races are running unopposed, just that you are fighting an uphill battle to get elected as a Republican in a town this blue. So I guess what I'm saying is that if you are looking for an exciting election, the Ann Arbor City Council races are probably not it.
The most contentious local issue is probably Proposal 1: the Library Bond. If this passes it would authorize the Ann Arbor District Library to borrow $65 million to build a new library downtown. People are really up in a tizzy about this one with both the pro and anti sides spending tens of thousands of dollars on ads.
In terms of local proposals, folks in the City will find Proposals A and B on their ballots too. Proposal B would levy a 0.1 mil property tax to raise about $450,000 a year to fund public art. Proposal A would continue a 1.10 mil property tax that funds city parks. It's my understanding that this millage also funds the efforts of Natural Areas Preservation to some degree. I am very pro-Proposal A.