The iMac sees airpods because I can connect/disconnect via the bluetooth menu. However, they don't appear in the list of audio output devices.
From this siteyou should do the following.
Make sure Bluetooth is on.
with both air pods in the charging case, open the lid and hold down the button on the back of the case. The green light in the charging case turns white.
Go to the Bluetooth menu item and select air pods and hit connect.
Now air pods should show up in sound Systems Preference panel.