Banking on a Land Bank

Washtenaw County Board of Commissioners meeting (July 8, 2009): In large part because the board has adopted a once-a-month summer meeting schedule, the agenda was full for Wednesday’s meeting. Commissioners asked – in some cases, grilled – the county treasurer about a proposed land bank project, which the board ultimately approved.

They also acted on several budget-related items, including 1) setting a public hearing for a proposed economic development tax, 2) passing the first phase of administrator Bob Guenzel’s recommendations to address a projected $26 million deficit, and 3) briefly discussing a proposal for changing the funding process for some nonprofits. Several leaders from the local arts community also turned out for a presentation on a countywide cultural plan.

But a large portion of the meeting was devoted to deliberations on the land bank, and that’s where we’ll begin our coverage.

Land Bank

County treasurer Catherine McClary had prepped commissioners who attended the July 1 administrative briefing about her request that they authorize the formation of a land bank. She gave essentially the same presentation at Wednesday’s meeting, outlining the rationale for a land bank and the specific instances in which it could be used.

The land bank is a mechanism to take temporary ownership of tax- or mortgage-foreclosed land while the county works to put it back into productive use. “Productive use” could mean several things, like selling it to a nonprofit like Habitat for Humanity to rehab, or demolishing a blighted structure and turning the land into a community garden. Right now, there aren’t many options to deal with blighted properties. In the case of a tax foreclosure, for example, the treasurer is required to auction off the parcel to the highest bidder – often, that’s an out-of-state buyer who’s looking for cheap rental property, sight unseen. There’s a high likelihood that the cycle of foreclosure will repeat itself, McClary said.

One concern McClary said she’d heard was that there isn’t a formal plan for how the land bank will work. That’s because the entity would be governed by a land bank authority, which would be responsible for putting in place policies, procedures and a strategic plan. That authority can’t be appointed until after the land bank is formed. McClary has applied for a grant from the Genesee Institute, which would help set up the land bank.

The institute’s founder, Dan Kildee, attended Wednesday night’s meeting and helped McClary field questions from commissioners. Kildee is a kind of “rock star” among land bank enthusiasts – a group which includes commissioner Conan Smith. In addition to serving as treasurer of Genesee County, where Flint is located, Kildee founded Michigan’s first land bank and helped write the enabling legislation for these land bank entities.

McClary said she wasn’t asking the county for staff or funding – the program would initially get $300,000 from the federal Neighborhood Stabilization Program. But she was asking commissioners to fast track approval – normally, they would vote on the proposal at their Ways & Means Committee meeting, which immediately precedes the board meeting, then vote on it a final time at the next board meeting. But their next board meeting isn’t until August, and the state Land Bank Fast Track Authority, which must approve the local land bank, was meeting the next day, July 9. McClary hoped commissioners would approve the land bank authorization at both the Ways & Means and regular board meeting on Wednesday. If they wanted to have the land bank in place to deal with properties this year, they needed to act now: “We really are on a tight time schedule, but I don’t believe a precipitous one,” she said.

This fast track approach was a source of some contention. Commissioner Jessica Ping asked why they hadn’t heard about this before, and why it was suddenly so urgent. McClary said she’d heard concerns that a land bank would cause pressure to move private property into the foreclosure process, so she wanted to make sure the county had a strong foreclosure prevention program in place before she proposed the land bank.

Commissioner Wes Prater said he was bothered by the fact that tax dollars were being used to buy property, then sell it at a loss: “If you continue to do that very long, you won’t be in operation very long.” He was also concerned that it was letting lenders off the hook – the county would be paying the lender to take it off their hands. Kildee said if you hold onto a property waiting for the value to increase, you risk having an abandoned house sitting there for a long time. McClary pointed out that mortgage foreclosures hadn’t been the focus of their discussions. And commissioner Mark Ouimet, a former bank executive, said that lenders would already be off the hook – in most cases, lenders would write off these properties as dead assets.

McClary also pointed out that even if you sell a property at a loss – say, to a nonprofit that would rehab the house and resell it – the fact that you now have a decent, occupied house instead of a blighted, vacant property means that property values for all the surrounding homes would likely increase.

Commissioner Ronnie Peterson didn’t like the fact that the county board would have no control over the land bank authority, other than appointing some of its members. Kildee pointed out that the bank would have to conform to local planning and zoning laws. Peterson said he could see the need for a land bank in the Flint area, where the market was seriously distressed, but that it was different in Washtenaw. He didn’t like the government getting into the real estate business, seizing property that the free market should handle. Peterson also felt the $300,000 designated for the land bank would be better used as an emergency mortgage payment fund, helping people stay out of foreclosure.

He was also worried about maintenance costs for these properties while they were held by the land bank – who would be responsible for cutting grass or shoveling snow? [Earlier this year, the Genesee Land Bank, which owns nearly 4,000 parcels, was criticized for just that reason.] Finally, Peterson was annoyed that more people hadn’t been consulted, like the Eastern Leaders Group, and that there hadn’t been a working session on the topic for commissioners.

Ouimet suggested putting a limit on the number of properties the land bank could acquire, or the amount of money it could invest. Commissioner Rolland Sizemore Jr. asked if the board of commissioners could dissolve the land bank, if they felt it wasn’t working – they could.

Commissioner Jeff Irwin, saying he was enthusiastic about the land bank, offered to revise part of the resolution to address some of the control issues that had been raised, giving the board final approval over the land bank’s strategies and policies. Commissioner Leah Gunn asked whether these changes would affect state approval – McClary said they would not.

Irwin worked on the language and consulted with other commissioners during the break between the Ways & Means Committee meeting and the regular board meeting. At the board meeting, commissioners approved the resolution, with these revised clauses:

BE IT FURTHER RESOLVED that the Washtenaw County Board of Commissioners authorizes the County Administrator to negotiate a contract with the Washtenaw County Land Bank Authority Board to permit the Land Bank Authority to operate, in part, using County resources, provided such resources are fully reimbursed back to the County from Land Bank Authority funds, upon the review and approval of Corporation Counsel and approval of the Board of Commissioners.

BE IT FURTHER RESOLVED that the by-laws, articles of incorporation, and the strategies and policies for acquisition, maintenance and disposition of assets to be under the control of the Washtenaw County Land Bank Authority will be presented for approval to the Board of Commissioners by December 31, 2009.

Before the final vote, Peterson again stated that he didn’t like how this had been handled. He complained that discussing it at the administrative briefing wasn’t public – a complaint he’s voiced often in the past, specifically because administrative briefings aren’t held in the board room or broadcast on Community Television Network. He called the fast-track process for voting on the land bank “very unusual” and not how a program should be established. He warned county department heads that ”if this junk happens again, I’m going to rip somebody’s head off.”

Ping, who chairs the board’s working sessions, said she would have been happy to schedule a session on the land bank, but she hadn’t been asked. Smith said he apologized if his exuberance about the program had caused it to be brought forward too quickly.

The land bank resolution passed unanimously.

2010 Budget

The board passed, with little discussion, the first phase of the 2010 budget recommendations made by the administration to tackle a looming $26 million deficit in 2010 and 2011. [See previous Chronicle coverage of the budget at the June board meeting.]

The one change made at the table concerned funding for nonprofits in the areas of children’s well-being and human services. Commissioner Leah Gunn asked that the proposed funding cuts, which in aggregate reduced allocations by 20%, be removed from the rest of the budget recommendations. She has proposed an alternative resolution, to be taken up at the Aug. 5 meeting. The resolution states that some nonprofits, for which funding had previously been earmarked, must now participate in competitive grant funding through the Office of Community Development, which is jointly operated by the county and the city of Ann Arbor.

The proposal also restores the 20% cuts, and adds an additional $15,000 to the “pool” of funding that can be distributed by OCD – bringing the total funding for nonprofits to $1.015 million.

Having all nonprofits go through a competitive grant process levels the playing field, Gunn told her colleagues. It’s not fair that some groups get preferential treatment by being funded directly from the county, while others must go through the OCD grant application process. Only two nonprofits retain direct funding – the Domestic Violence Project/Safe House ($96,000) and the Shelter Association ($160,000). Gunn made these exceptions because the buildings are owned and maintained by the county. In a note attached to her proposal, she wrote that “it is in our own special interest to see that these programs continue, and that the buildings remain in good repair.”

Commissioner Barbara Bergman praised the criteria that the OCD has developed to evaluate grant applications, saying that the objective measures would make the process more fair – “it doesn’t matter how cute or pathetic or wonderful they (the nonprofits) are.” She said the decision affects some of her pet projects, but if her ox gets gored, so be it. “My ox is in the game,” Bergman said.

Saying he wasn’t against changing the allocation procedure, commissioner Ronnie Peterson asked the administration to check whether the county had any contractual obligations or commitments to the nonprofits that would be affected.

Public Hearings

Input on the Department of Justice Byrne Justice Assistance Grant

Only one person – Jim Mogensen – spoke at the public hearing for the Department of Justice Byrne Justice Assistance Grant, for which the sheriff’s department is applying. [Applications were due the following day, July 9.] The sheriff’s department is applying for $160,723 to fund the department’s community outreach program.

Here’s a description of the grant program from the DoJ website:

The Edward Byrne Memorial Justice Assistance Grant (JAG) Program (42 U.S.C. 3751(a)) is the primary provider of federal criminal justice funding to state and local jurisdictions. JAG funds support all components of the criminal justice system, from multijurisdictional drug and gang task forces to crime prevention and domestic violence programs, courts, corrections, treatment, and justice information sharing initiatives. JAG funded projects may address crime through the provision of services directly to individuals and/or communities and by improving the effectiveness and efficiency of criminal justice systems, processes, and procedures.

Mogensen said he had contacted Derrick Jackson, director of community engagement for the sheriff’s department, to obtain a copy of the grant application, but that he hadn’t heard back from Jackson. Mogensen said that several years ago he began noticing homeland security and Department of Justice grants coming in locally, and he started asking what strings were attached to this federal money. No one will confirm or deny whether there are strings attached, he said, and even if there were, no one would say what those strings are.

It’s important to know what might be required in exchange for accepting these grants, he said, so that local governments can have the option of saying “no.” For example, if the federal government decided it wanted help enforcing immigration regulations, one way to do that might be to force local governments that have accepted homeland security grants to help with enforcement.

Mogensen said he realized this was a pro-forma hearing, but that he would like some follow up so that he could get a copy of the grant application for his files. The board unanimously passed the resolution authorizing the grant application.

Setting a Public Hearing for a Proposed Tax

The board approved a resolution setting a public hearing at the Aug. 5, 2009 board meeting to get input on a proposed economic development tax. The administration has proposed levying 0.017 mills – or about $1.70 per year for every $100,000 in a property’s taxable value – to raise $200,000 for the local economic development agency Ann Arbor SPARK and $50,000 for SPARK East, the group’s Ypsilanti-based office. The proposed budget has funding for those entities coming from the general fund. If the millage is passed, these new tax dollars would replace the $250,000 in general fund dollars currently earmarked for SPARK. This millage can be approved by commissioners, rather than getting voter approval, because the enabling legislation – Act 88 – predates the state’s Headley Amendment. If approved, the tax would be levied in December 2009.

Appointments

The board unanimously approved appointments to five county boards and commissions, with Kristin Judge dissenting on Paul Seelbach’s appointment to the Natural Areas Technical Advisory Committee. Judge objected to appointing someone who had missed the application deadline – an issue she had raised at the July 1 administrative briefing. Seelbach was endorsed by the Washtenaw County Parks and Recreation Commission, but his application had been turned in to the clerk’s office on June 1 – after a May 29 deadline. Bob Tetens, the county’s parks and recreation director, said that Seelbach had sent his application to the Parks & Rec Commission before the deadline. Judge wasn’t persuaded, saying that it was important to be professional and transparent in the process, and that the other candidate had managed to follow the rules.

In addition to Seelbach, the board approved these appointments:

• Daniel Brady, Danielle Choi and Mary Smith to the community action board.
• Danielle Choi, Shoshana DeMaria and Geoffrey Fowler to the emergency medical services commission.
• Debra Adams, Daniel Brady, Shoshana DeMaria and Paul Ganz to the workforce development board.
• Pat Ivey, David McMahon and Jolea Mull to the local emergency planning committee.

Washtenaw Cultural Plan

A resolution on Wednesday’s agenda gave the Arts Alliance the ability to apply for National Endowment for the Arts grants on behalf of the county. Tamara Real, the nonprofit’s executive director,  gave a presentation to the board about a countywide cultural plan that’s been developed over the past two years. [Details about the plan are on the alliance's website.]

Real summed up the role of the alliance this way: “We do what they hate, so they can create.”  The “they” in this case are artists and others in the creative economy, who rely on the Arts Alliance for the “non-sexy” side of art, Real said – research, advocacy, being a liaison between the arts, business and government.

The alliance’s first step was to do an economic impact study, trying to gauge contributions that the arts make in Washtenaw County. The study, based on data from 2002, found that nonprofit cultural organizations contributed $165 million to the local economy, and were responsible for 2,600 jobs and nearly $57 million in household income, Real said.

Working with groups and individuals countywide, the alliance then developed a cultural master plan to create a strategic vision for the next five years. The plan dovetails with the Ann Arbor Region Success effort, Real said – the 34 recommendations of the cultural plan feed into the goals for the Region Success initiative. The final steps have been to customize the plan for each of the county’s seven population centers, she said – that work is almost complete. With a plan in place, they can work toward specific goals that will bolster the arts community. It’s not a plan that will sit on the shelf and gather dust, Real said.

Several people involved in developing the cultural plan – and representing various geographic regions of the county – attended Wednesday’s meeting. Two of them spoke to commissioners following Real’s presentation. Artist David Austin, who owns the What Is That Gallery in Ypsilanti, said there’s a renaissance happening in Ypsilanti, but that they’re poised at the precipice and need the county’s help to do their small part reviving Michigan’s economy. Paul Cousins of Dexter also spoke to commissioners, saying he wasn’t an artist – the only thing he plays is the radio, he joked – but that he recognized the economic benefits of the arts. In Dexter, one recent example was the opening of The Encore, a new musical theater downtown which has drawn people to local restaurants, too. The fact is, it does work, he said.

Several commissioners voiced support for the arts. Jeff Irwin encouraged Real to return at some point and talk about additional resources the alliance might need to pursue its goals.

Other Presentations and Recognitions

Area Agency on Aging 1-B

Tina Abbate Marzolf, CEO for the Area Agency on Aging 1-B, made a presentation to the board about her organization, which receives funding from the county. The roughly $24,000 that the county spends each year on the agency is used to leverage $5 million in state and federal dollars, Marzolf said. Their mission is to support older adults in southeast Michigan, as well as people with disabilities. And like most social service agencies, they face funding cuts. About 30% of their funding comes from the state, which is cutting its support by 15% in 2010, Marzolf said. The main services that might be affected by those cuts include meal delivery, in-home services, daycare programs and volunteer respite programs. Federal stimulus funding will help offset the state losses, but that funding is temporary, she noted.

Marzolf said they are exploring partnerships and other strategies to deal with dwindling resources. Pilot food delivery programs, for example, include working with UPS drivers, or delivering more meals at a time on fewer days, rather than delivering meals each day. One of the challenges for meal delivery is that the service entails more than just food – it’s also a time for socialization that’s important for people who can’t leave their homes. She said they are always looking for ways to find efficiencies – locally, for example, they partner with the Ann Arbor Center for Independent Living.

Commissioner Barbara Bergman noted that she’d served on the Area Agency on Aging 1-B board of directors for 12 years: “I’ve been aging with the agency.”

National Joint Apprenticeship & Training Committee

Commissioner Mark Ouimet, vice chair of the board, presented a proclamation to Mary Kerr, president of the Ann Arbor Convention & Visitors Bureau, declaring Aug. 1-7 as National Training Institute Week. During that week, the National Joint Apprenticeship & Training Committee is, for the first time, bringing its annual training institute to Ann Arbor. Kerr was instrumental in helping bring that group of about 2,000 electrical workers to town, with an estimated economic impact of $5 million. The institute is a joint program of the National Electrical Contractors Association and the International Brotherhood of Electrical Workers.

Washtenaw County MSU Extension

The board also honored the Washtenaw County Michigan State University Extension, which recently received the state Housing Development Authority’s Homeownership Division Housing Agency of the Year award. Nancy Thelen, director of the local MSU extension, was on hand to accept the commendation, recognizing specifically the program’s work in mortgage foreclosure prevention and home ownership counseling.

Public Commentary

Several people spoke during the time set aside for public comment at the beginning of the meeting, with three minutes allotted for each speaker.

Jim Mogensen: Mogensen expressed concern about funding for human services. Governments are outsourcing the social safety net to various nonprofits, then cutting funding. At some point, nonprofits won’t be able to provide the services the community needs. There’s also the issue of mandatory versus non-mandatory services. The board might decide to cut funding for non-mandatory social services, but that could convert into an increased cost for mandatory services, like the jail system – if people don’t have the safety net of social service agencies, they could wind up in the criminal justice system. The board needs to think very carefully about the implications for their funding decisions, Mogensen said.

John Weiss: The director of the Neutral Zone, a nonprofit that provides activities and programs for local teens, briefed commissioners on the Washtenaw Youth Development Initiative. The effort is focused on building the capacity of youth-serving agencies around the county and on developing the leadership skills of local youth. One recent example of their work is the Youth Peace Town Hall – held in April at Eastern Michigan University, more than 100 people attended, Weiss said. The event was sponsored by the Washtenaw Youth Development Initiative and the Washtenaw Alliance for Children and Youth. Weiss urged the county to continue its support for youth-focused programs.

Jackie Martin: Martin is extension educator for the county’s 4-H Youth Development program. She spoke about the upcoming Washtenaw County 4-H Youth Show, which runs from July 26-31, saying that more than 700 people are expected to participate. Two teens from the extension’s advisory council also spoke their positive experiences with 4-H.

Tom Partridge: Partridge spoke on all four occasions available for public comment – at the beginning and end of the Ways & Means Committee meeting, and at the beginning and end of the regular board meeting. He berated the board for its summer schedule, saying there was important work to be done and that they should meet more frequently than once a month. He said their agenda was inadequate, and didn’t include issues like expanding public transportation and dealing with deputy patrol contracts with the townships.

Executive Session

The board ended its meeting with a closed-door executive session related to pending litigation. At the July 1 briefing, corporation counsel Curtis Hedger told commissioners that the session would provide an update on the lawsuit brought against the county by Bruce Lee. Lee and his brother, Clifton Lee, were involved in a 2006 encounter with sheriff’s deputies in the West Willow neighborhood, which led to Clifton Lee’s death. Last year, the county settled a previous lawsuit – brought by Clifton Lee’s heirs – for $4 million.

Next board meeting: The board is working on a summer schedule, with regular meetings held only once a month. The next meeting is Wednesday, Aug. 5 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. [confirm date] (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.