Washtenaw County: Equalize This

Washtenaw County Board of Commissioners (April 15, 2009): A report that’s crucial in calculating how much the county can collect in property taxes this year was delivered to the board, one of several budget-related topics as commissioners and the administration grapple with declining revenues and a multimillion-dollar deficit in the coming years.

As county administrator Bob Guenzel had foreshadowed at the commissioners’ April 11 retreat, the 2009 taxable value of property in the county fell 2.16%. It was the first time in 50 years that Washtenaw County saw a decline in both taxable value and assessed value – but it almost assuredly won’t be the last.

The board also took time to honor public health official Ellen Clement, who’s leaving the county staff after nearly 25 years, and to recognize Guenzel for his 35 years of service. He’ll be sticking around.

What’s our property worth?

Raman Patel, director of the county’s equalization department, gave his detailed annual report on the total equalized (assessed) value of property in the county, as well as a report on the county’s taxable value. As the term implies, taxable value is used when calculating taxes for the county, its various municipalities and other entities that rely on taxpayer dollars, such as schools, libraries and the Ann Arbor Transportation Authority, among others.

The state-mandated equalization process runs throughout the year, as both the county and local assessors within each municipality take stock of the value of land and other property, such as buildings. Local assessors first turn their findings over to the county, which conducts independent assessments based on sales studies and physical appraisals. The county’s equalization department then looks at how its findings compare with the local assessors’ findings. The county has authority to request that local assessment rates be altered, and in fact that occurred in several municipalities this year. York Township, for example, was asked by the county to lower its residential assessments by almost 15%, in aggregate.

After this “equalization” occurs, the local municipalities send out notices to each property owner in their jurisdiction. These notices indicate a property’s assessed value as well as its taxable value. If property owners disagree, they can appeal that assessment. After appeals are ruled on, the county uses that data for its equalization report.

The taxable value – a state-mandated formula – is the lower of two figures: either 1) a parcel’s equalized (assessed) value, or 2) a capped value calculated by taking last year’s taxable value minus any losses (such as a building being torn down), multiplied by 5% or the rate of inflation (whichever is lower – this year inflation is 4.4%), plus the value of any additions or new construction. If the property changes hands, however, taxable value is reset at its equalized value.

It’s no surprise that property values in most sectors countywide have declined. The exception was commercial property, which in aggregate increased just 0.29% in 2009. Residential property – which makes up 63% of the total property in the county – dropped in value by 9.03%.

The total assessed value of land and personal property in the county is $17.5 billion, a 6.58% drop from 2008.

In discussion following Patel’s presentation, Mark Ouimet said it seemed that looking ahead, property values would continue to either decline or remain flat, and he asked Patel what the recovery period for this cycle might be. Patel said it takes two or three years for the market to affect equalized values – we’re just starting to see the effect of Pfizer’s departure, for example. Inflation will also keep taxable values down, Patel said, since it will likely be less than 1% next year.

There’s also an increasing number of properties in which taxable value equals assessed value. When that happens, and if a property’s assessed value continues to fall, taxable value falls in tandem – which means lower revenues for local municipalities.

Jeff Irwin noted that property values are linked to jobs and wages, and that the county should keep this in mind when making investments in economic development. It’s one of the few ways they can do something to affect the root cause of the housing/jobs crisis, he said.

County administrator Bob Guenzel plans to make recommendations to adjust the 2009 budget at the June 3 board meeting, in light of the new taxable value data. For 2009, revenues are about $370,000 less than projected, he said.

Funding for non-general fund programs

As part of the budget process, Verna McDaniel, deputy county administrator, gave a report on the county’s funding of non-general fund programs that are supplemented with general fund dollars. Those general fund dollars are typically used to match federal or state funding, pay for staff or in some other way support the county’s mission.

The amount of general fund money given to such departments varies widely. Employment Training and Community Services, for example, gets only 5% of its budget from the general fund – the other 95% comes from federal and state funding, as well as other grants. Community Development gets only 3% of its budget from the general fund. Examples of departments that depend more heavily on general fund support include public health (42%) and the Michigan Veterans Trust Fund (60%).

McDaniel cited several ways that the county could reduce general fund spending on these departments: 1) find ways to generate new revenue, such as increasing the collection of outstanding environmental health permit fees or instituting a new fee for mandatory training of food service workers, 2) cut costs, such as expanding cost-sharing arrangements with the University of Michigan for the medical examiner program, or reducing staff, and 3) through organizational restructuring, such as streamlining administrative functions of the Washtenaw Community Health Organization and the Community Support and Treatment Services departments. She said they also might reconsider the automatic annual increases for personnel that were previously negotiated in labor contracts.

After McDaniel’s presentation, Mark Ouimet asked for additional information breaking down the number of employees who worked in these non-general fund departments. McDaniel said she’d provide that. Kristin Judge said she liked the idea of requiring training for food-service workers, and recalled similar training she had before working as a waitress in Arizona. (When Judge revealed that she still had her training certification card, McDaniel noted that it was transferable.)

Judge also commented that there was frequent mention of trying to bring UM to the table. She said they needed to find a way to try to capture resources from the university.

McDaniel’s presentation had touched briefly on funding options for the county’s juvenile detention program, and commissioners asked Lisa Greco, director of the county’s children’s services department, which includes juvenile detention, to speak about that program. (Several questions related to a document that Greco had emailed to commissioners – The Chronicle has requested this document, but has not yet received a copy of it.)

In response to a question, Greco said that the county accepts youth into detention from other counties, charging a per diem of $225 for their housing. They also have a contract with the U.S. Immigration & Customs Enforcement to house youth picked up by the Dept. of Homeland Security. The juvenile detention facility has capacity for 40 youth, but the average occupancy now is about 20, Greco said, including 2 to 4 kids for other counties or the federal government at any given time. Greco also said they have an intensive outpatient program for substance abuse that’s the only one of its kind in the county specifically for adolescents. Commissioner Barbara Bergman said that other counties might close their detention centers to cut costs because of the economy, and that might be an opportunity for Washtenaw County to gain additional revenue by housing youth from those counties.

Federal stimulus dollars

The board officially accepted two major federal stimulus awards given to the Employment Training and Community Services (ETCS) department: 1) $3.6 million to fund jobs for youth and training for displaced workers, and 2) $4.1 million to expand a weatherization program for low- and middle-income residents. [Here are links to previous Chronicle coverage of the worker aid funds and weatherization program.]

ETCS director Trenda Rusher and Aaron Kraft, who supervises the weatherization program, were both on hand to talk to commissioners about how they’ll handle the influx of funding.

Commissioner Jessica Ping asked how ETCS was communicating with local businesses about the summer jobs program, which will fund jobs for 600 to 1,000 youth through work in both the public and private sectors. Rusher said she’d been talking with local chambers of commerce, and that when they actually had the money in hand, they planned a huge publicity campaign. Ping said she knew that the Manchester and Saline chambers, which are in her district, weren’t aware of the program. Commissioner Mark Ouimet suggested that Rusher meet with the county’s council of chambers, which would be an efficient way to communicate the information.

Conan Smith asked Kraft whether any of the weatherization funding could be used for renewable energy initiatives. Kraft said that the stimulus act offered some flexibility, after they’d completed their core work of weatherizing roughly 600 homes. Rusher said they have a vision for working with the Washtenaw Hospitality Alliance, possibly partnering with local hotels and restaurants to go after additional federal dollars for installing solar panels on those businesses. Commissioner Wes Prater said he hoped that part of the money could be used to install solar power for water heaters. He said solar power in Washtenaw had the chance to be “more successful than termites.”

Thanks to Guenzel and Farewell to Clement

The board recognized two administrators on Wednesday for their tenure:

• Ellen Clement, departing health officer for the Washenaw County Public Health Department, was honored for her nearly 25 years with the county. She’s leaving to take a job as executive director of the Corner Health Center in Ypsilanti. She was presented with a plaque and resolution commemorating her service to the county, and got a hug from board chair Rolland Sizemore Jr.
• Bob Guenzel, county administrator, was recognized for his 35 years of service with the county. Though Guenzel didn’t get a hug, Sizemore did give him a firm handshake. Sizemore also jokingly asked whether this meant that Guenzel had been fired. It did not.

Sharon Sheldon, program manager for the county’s health promotion/disease prevention, accepted a resolution proclaiming April 20-26 as Public Health Week in Washtenaw County.

Public comment

Thomas Partridge, a Scio Township resident, was the only speaker during the public comment section of the meeting. He spoke about the need for commissioners to form an equal opportunity access committee, which would look at issues like public transit. This was a better use of their time, he said, than nitpicking over how long people can speak during public comment [alluding to the fact that the board recently shortened its public comment time from 5 minutes to 3 minutes per turn].

Present: Barbara Levin Bergman, Leah Gunn, Jeff Irwin, Kristin Judge, Mark Ouimet, Ronnie Peterson, Jessica Ping, Wes Prater, Ken Schwartz, Rolland Sizemore Jr., Conan Smith

Next regular board meeting: Wednesday, May 6 at 6:30 p.m. at the County Administration Building, 220 N. Main St. The Ways & Means Committee meets first, followed immediately by the regular board meeting.  (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public comment sessions are held at the beginning and end of each meeting. [confirm date]