Nonprofits to County: “Don’t Cut Funding!”

Washtenaw County Board of Commissioners (Sept. 16, 2009): Leaders of local nonprofits and people who’ve been helped by their services packed the boardroom Wednesday night, urging Washtenaw County commissioners to continue support for the area’s most vulnerable residents.

The meeting marked the first time that county administrator Bob Guenzel made his official budget recommendations to the board, which include cuts aimed at closing a projected $30 million deficit over the next two years. The county funds a range of local nonprofits – this year, a total of $1.7 million was awarded to agencies like Food Gatherers, the Shelter Association, Interfaith Hospitality Network and SafeHouse, among others. The proposed budget calls for 20% cuts in funding for human services nonprofits in 2010 and another 20% in 2011.

Proposed cuts to these nonprofits were the most difficult part of his budget recommendations, Guenzel told the board. “Those dollars have been well spent – they are the safety net.” Yet he didn’t feel he could ask for concessions from employees and squeeze the county’s mandated services without including cuts to nonprofits as well. He reminded commissioners that when he was hired as administrator 15 years ago, the county spent $300,000 to fund local nonprofits. Even with the proposed cuts, he said by 2011 the county will still be awarding about $1 million to these groups.

Commissioners responded to both the emotional public comment session and to the proposed budget recommendations, which they’ll have two months to review before adopting a final budget in November. Several commissioners cited their support for a human services millage. And commissioner Kristin Judge – saying that there were more creative ways to cut expenses – turned in her county-paid cell phone.

Public Comment: A Sampling

For more than 90 minutes, over 40 people took their turn at the podium to speak to commissioners, the vast majority of them lobbying for nonprofit funding. Many others attended the meeting but did not speak during public comment – the boardroom was filled to capacity, with the crowd spilling out into the adjacent lobby. The following sampling is grouped according to the nonprofits that speakers were supporting.

Head Start: About a half-dozen parents, volunteers and others spoke about the importance of the program, which serves preschool children of low-income families. Susan Miller, on the leadership team of Washtenaw Success by Six, described the county’s Head Start program as nationally known for its quality of service. That’s largely because of county support, she said. The extra funding allows them to pay higher salaries for teachers, which results in better teachers and lower turnover. Low turnover is important for the stability it provides the children, she said, adding that the county could not make a better investment.

Several mothers whose children are in Head Start described the importance of the meals they get, the activities that help their children grow, the dental program that’s offered, and the way that Head Start staff helps their children’s self esteem and confidence. Tamika Witherspoon said her son had a speech impediment and got help at Head Start. “Now he talks your ear off!” she laughed. She said it helps parents, too – because her children were in Head Start, she was able to go back to school. [The county has supplemented the basic federal funding for Washtenaw County's Head Start with $765,880 from its general fund. The proposed budget would cut $167,000 from that budget.]

Interfaith Hospitality Network/Alpha House: Several board members and volunteers for Interfaith Hospitality Network spoke about their support for IHN’s Alpha House, a homeless shelter for families. Don Anderson said that when they provide food, education and a safe place to live, they are making a difference for people who sorely need to be in a better place. Commissioners need to consider the very real cost of withholding services from those in need, he said. “The safety net for our community must be maintained.” Jim Reisinger said that many people are just a paycheck away from being homeless – the need is growing, and it is severe, he said. Paula Christensen said she’s lived on the same street for 20 years, and this is the first time that a child has come to her door begging for food. Things are getting worse, she said, and this community shouldn’t be the kind of place where children have to beg. [IHN received $35,000 from the county in 2009.]

Food Gatherers: Executive director Eileen Spring and her staff lugged in several crates full of paper plates – over 1,100 of them, each with a message written by kids or adults who receive food, housing or other aid from local nonprofits. These messages had been collected over the past two weeks by several nonprofits throughout the county, in an effort organized by Food Gatherers, and many people who spoke during public comment read directly from the plates. Food Gatherers, which collects and distributes food countywide, was frequently cited as a lifeline for many nonprofits. Tom Roberts, a board member of the Manchester Community Resource Center, said their main operation is a food bank serving more than 400 people, and without Food Gatherers they’d be “out of luck.” Nina Pemberton, executive director of Aid in Milan, said that Food Gatherers is the one agency that realizes “little old Milan” is a part of Washtenaw County, and needs help. Without Food Gatherers, they’d be in dire straits, Pemberton said. [Food Gatherers received $35,000 from the county in 2009.]

SafeHouse Center: Two SafeHouse board members – Kimberly Pearsall and Jim Phelps – spoke on behalf of the shelter for survivors of domestic violence and sexual assault. Pearsall described herself as a survivor of domestic violence, and said that her life would be dramatically different now if she hadn’t received support from SafeHouse, among others. She said she’s served on the board for five years and has seen funding shrink – but the demand for services doesn’t drop. Phelps called SafeHouse one of the best organizations in the county. [SafeHouse received $120,000 from the county in 2009.]

Ozone House: Julie Jenista told commissioners that she had been a runaway, having left home at the age of 17. Ozone House helped her develop basic life skills, she said, as well as the skills to break the cycle of dysfunction in her family. She’s now a graduate student at Eastern Michigan University and a homeowner – she hoped that Ozone House would be able help others in the future, just as she’d been helped. Board members Lisa Jackson and Angela Williams also asked for continued support of the Ozone House, which provides shelter and services for runaways and homeless youth. Williams said she’d spent four hours on Tuesday volunteering at the Ozone House 24-hour crisis hotline: “I can tell you the needs are not growing smaller.” A comparatively small investment from the county will save money in the long run, she said. Jackson said she understood the budget concerns, but that Ozone House provides crucial services to vulnerable young people. [The county awarded $55,000 to Ozone House in 2009.]

Neighborhood Senior Services: Jack Baker Jr. said his parents started NSS out of concern for their elderly neighbors on Ann Arbor’s north side, and that he had served on the board in the 1980s and ’90s. He had recently returned to the board, along with his sister Carole, to help guide the nonprofit through a difficult financial period. Their board and the board for Catholic Social Services have agreed to a merger, he said, as a way to deal with the crisis. A lot of older residents don’t have sufficient support services, Baker said, noting that the county’s aging population is expected to triple over the next decade or so. That means demand for services that NSS provides will be needed even more. As the county prioritizes, “human services should come first,” Baker said. [NSS received $25,000 from the county in 2009.]

Big Brothers/Big Sisters of Washtenaw County: Dale Cutshaw is a volunteer in the program, and was accompanied by his “little brother,” Cody. (Cutshaw noted that they had to leave after he spoke, because it was a school night.) He said the program was important because working with youth through mentoring programs like Big Brothers/Big Sisters was a deterrent to getting in trouble later in life, possibly leading to incarceration – which is a county expense. He said it was easy to incorporate mentoring into your life, and he encouraged people who attended Wednesday’s meeting to consider being a mentor. [The county contributed $45,000 to Big Brothers/Big Sisters in 2009.]

Perry Nursery School: Sandy Hilton, Perry’s executive director, told the story of Aaron, a boy who enrolled in the school last spring. He and his mother and brother lived at the SafeHouse Center, she said, and he arrived at the school every day by taxi. He had behavioral problems, and a social worker from the school worked with him and his mother to address them. He received three meals at Perry, Hilton said, and got training in English as part of their services for Spanish-speaking students. Over the past few months, his behavior has improved dramatically, she reported, adding that his story is just one example from the 96 children that Perry works with five days a week, 50 weeks a year. The school – located at 3770 Packard Road – has been serving at-risk children for 75 years, Hilton said, and is a vital link in breaking the cycle of poverty. [Perry Nursery School got $50,000 in county funding this year.]

Shelter Association of Washtenaw County: Karen Andrews, the Shelter Association’s board president, thanked commissioners for their support of the association and the Delonis Center, the homeless shelter on Huron Street. She said the shelter board is doing its part by trying to educate the community and raise funds. Finally, she reminded commissioners that the county’s support helps the more than 1,400 people who come to the shelter each year because they’ve exhausted all other resources. [The Shelter Association received $200,000 from the county in 2009.]

Nonprofit Enterprise at Work (NEW Center): Neel Hajra, president and CEO for the Nonprofit Enterprise at Work, described himself as a lifelong Ann Arbor resident. He noted that NEW served hundreds of nonprofits in Washtenaw County, providing support services and training. He urged commissioners to preserve current funding levels. You can look at it two ways, he said – as a cost that you can save, or as a means of maintaining important services amid declining resources. He took the latter view. [The NEW Center received $35,000 from the county in 2009.]

Neutral Zone: Lori Roddy, program director for this teen center, told commissioners that the county provides 75% of the funding for Neutral Zone’s after-school drop-in program, which serves 50-60 teens. She said the Neutral Zone provides a place to help teens become contributing members of the community. Roddy was accompanied by Michelle Hinton, who said this was the first time she felt affected by the recession. She said she was worried that she and her friends might not have a place to go after school, and noted that Neutral Zone provides food, tutoring and a variety of activities created by and for teens. [The county gave $30,000 to Neutral Zone's after-school drop-in program in 2009.]

Ypsilanti Meals on Wheels: Executive director Ann Harris said for many of the people they served, Meals on Wheels is the only nutrition they get on a daily basis. Many live alone. But the nonprofit has had to cap its services, she said, and now has a waiting list of 63 people. Board president Morell Boone said the program serves 215 meals a day, six days a week. But like other nonprofits, their situation is dire. The program is $30,000 in debt, he said, and they won’t be able to operate next year unless they restructure. They were there to plead for funding from the county, Boone said. [Ypsilanti Meals on Wheels received $15,000 from the county in 2009.]

People also spoke on behalf of the Ann Arbor YMCA, Planned Parenthood, and several other groups. The final speaker was Letitia Byrd, a retired teacher and long-time community activist who serves on the boards of several local nonprofits. She said she was there to put the question mark, exclamation point and period on what had been said by other speakers. It’s vital to maintain the status of these groups, she said – Washtenaw County is a great place to live and raise a family, and it can only remain that way by supporting these local nonprofits. “I hope that you’re able to find a way to help these organizations continue to survive,” she said.

Commissioner Response to Public Commentary

Leah Gunn began by thanking everyone who came, saying “I’m as supportive of you as I can be.” Yet the county’s general fund depends on property taxes, she added, and property taxes are down. “State government is in meltdown – we’re not going to get any help from them,” Gunn said. “We have to help ourselves.” She urged residents to support a human services millage, noting that voters have approved millages for parks and land preservation. “My feeling is if we can preserve land, we ought to be able to preserve people.”

Jeff Irwin said the outpouring of passionate support shows why these nonprofit agencies are so successful. He acknowledged the importance of a human services millage, but noted that it wouldn’t help the situation in 2010. [Read previous Chronicle coverage of the proposed millage, which has been floated as a possibility on the November 2010 ballot.] He also praised one of the speakers who had pointed out another benefit that local nonprofits provide – it makes people better citizens as they volunteer and help others, and learn more about the community and the needs of those less fortunate.

Kristin Judge said she would do everything she could to keep human services funding at its current level. She urged residents to contact their state legislators – state revenue-sharing funds were at risk, she said. The county could be losing another $1 million if the legislature moves ahead with those cuts in order to address its own $2.7 billion deficit.

Judge said she thinks that county residents would pass a human services millage, but before the board asks voters to do that, they need to make sure they’re responsible with the revenues they currently receive. County funding for human services accounts for 2.8% of the general fund budget, Judge said, adding that she believes they can cut expenses by that amount by eliminating perks.

As an example, the county spends $350,000 annually on cell phones for its staff, she said, compared to the $35,000 it provides to Food Gatherers. She pulled out her own county-provided cell phone, and said that she was turning it in that night. “I know it’s dramatic but I wanted to make a point,” she said. The county should give cell phones only to employees who have dangerous jobs or who are away from their desks 70% of the time, she said.

Conan Smith also thanked the crowd for raising their concerns to commissioners. Referring to the economy and the budget challenges it presents, he said “it’s probably the toughest time we’ll see in generations.” While it sounds extraordinarily simple to cut expenses like cell phones, he said the consequences could be significant. Smith said he wasn’t saying what’s right or wrong – only that it was more complicated than it might seem.

Mark Ouimet said that as challenging as this budget process will be for staff, the board and the community, it’s also an opportunity to have a community debate about what needs we have, how to address those needs and how to better work with nonprofits.

2010, 2011 Budget Presentation

Though the administration and board have been discussing the 2010 and 2011 budget for nearly a year, Wednesday was the first time that county administrator Bob Guenzel formally presented his budget recommendations to the board. The Chronicle previously reported on details of the recommendations, which were posted on the county’s website late last week.

The budget was developed based on priorities that included preserving services and jobs, and an attempt at equity in the process, but not across-the-board cuts.

Guenzel told the board that Wednesday night marked a significant milestone in the budget process. And though there’s been some fatigue because of the amount of work that’s gone in to preparing the document during a particularly difficult economy, they now need to be re-energized, he said. “This is the milestone where the organization turns the budget over to you. It’s really your budget,” Guenzel said. The board plans to hold a special public hearing on the budget on Oct. 22, to solicit input from residents. They are expected to vote on the final version at their Nov. 18 meeting.

He also acknowledged that there were still several unknowns. The most significant of those is the outcome of labor negotiations. More than 80% of the county’s 1,350 employees are represented by 17 bargaining units, and their current contracts run through at least the end of 2010, in some cases longer. The administration has been talking with union leaders over the past several months, hoping to gain as much as $14 million in concessions – though the unions are under no obligation to even participate in the talks.

The largest of those units is AFSCME Local 2733, which represents about 700 employees. Earlier in the meeting during the public comment session, Angela Tabor, an AFSCME representative, chided county administration for creating “mass hysteria” among employees, by talking about the possibility of major job cuts. She cited the specific example of the Community Support and Treatment Services department, which presented its budget at the board’s Sept. 2 meeting. Because of funding uncertainties at the county and state levels, CSTS faces the possible loss of up to 73 jobs, or as few as six. Tabor said that most AFSCME members live paycheck to paycheck, and they know what’s happening in the economy. But she doesn’t feel the county is doing enough to cut expenses, and instead is taking a knee-jerk approach by cutting jobs. She said the union was willing to work with the county, but that the administration must be held accountable.

In his presentation to the board, Guenzel said that they’ve built into the budget an assumption of $3.5 million in labor savings in 2010, and another $5 million in 2011. “I’m optimistic that maybe by the end of this month or the first week in October, we’ll be able to publicly report that we’ve had some success,” he said. However, if an agreement can’t be reached by Oct. 16, Guenzel said he’ll have a contingency plan ready, identifying other areas to cut.

Another uncertainty is the budget for the sheriff’s department. Guenzel said he and sheriff Jerry Clayton – who attended Wednesday’s meeting but did not make a presentation to the board – are continuing to talk about employment levels and budget modifications in the department, which accounts for about 35% of the overall general fund budget. Clayton already identified $1.5 million in reductions to his department during the first phase of budget cuts earlier this year. Guenzel said the jail expansion will likely require additional staffing, however, and that at this point the budget assumes they’ll need a $1.2 million increase.

Looking ahead, Guenzel said the outlook for 2012 and 2013 showed additional deficits, of $11.5 million and $16 million, respectively. Those calculations assume increases in wages and benefits, he said. Revenues are projected to continue to drop, due primarily to decreases in property values, which result in lower property tax revenues.

Finalizing the 2010 and 2011 budget will give the county some breathing room, Guenzel said, but 2010 needs to be a planning year, both for the county government and the community.

Commissioner response to Budget Presentation

Several commissioners thanked Guenzel and his staff for their work over the past few months in putting together the budget. Some said they would save their questions and comments for a later date, but a few commissioners asked for points of clarification.

Kristin Judge asked several questions, including whether the administration could report on their progress in reducing the management-to-staff ratios. Some commissioners have previously expressed concern that layoffs hit rank-and-file workers to a greater degree than supervisors. Guenzel said they’d report back with those numbers. She also requested more detail on efforts to curb infrastructure costs, like cell phone usage.

Judge also had a question regarding the restructuring of the strategic planning department, which Guenzel has proposed dissolving in order to form a new department of economic development & energy – resulting in a net job loss of three out of seven positions. Judge asked what revenue would support that department.  Guenzel explained that the salary for the director of the new department – Tony VanDerworp, the county’s current director of strategic planning – would be funded through the Act 88 millage (see below). Commissioner Conan Smith reported that the county had just received a $700,000 energy grant, which would also be used for that department. And Guenzel said that there may be funds from $1.5 million that’s been set aside in the budget for jail overcrowding. With the jail expansion coming on line, at least some of those funds would likely be available, he said.

Mark Ouimet said he wanted the administration to examine the methodology they used in making revenue and expense projections. Earlier this year, when the administration had projected a lower deficit, Ouimet said he voiced the opinion that the deficit would be closer to $30 million – that’s now the case. “I wish I had been wrong,” he said, adding that they need to be as accurate as possible in making these forecasts. He also wanted to ensure that the cuts they were making wouldn’t affect their ability to issue bonds in the future. Finally, Ouimet urged Guenzel to accept sheriff Jerry Clayton’s projections regarding staffing levels and budget needs. For budgeting purposes, Ouimet said, it’s important to rely on the sheriff’s expertise.

Jessica Ping seconded that sentiment regarding the sheriff, saying they need to trust that Clayton knows what his department requires. She also expressed concern over the economic development millage that’s part of the proposed budget. Guenzel had originally proposed levying 0.017 mills under legislation known as Act 88, to be used for economic development purposes. The county can do this without voter approval because the legislation predates the Headlee Amendment, which put limits on a local government’s ability to raise taxes. The original proposal would have raised $256,000 to be allocated to Ann Arbor SPARK and its Ypsilanti business incubator, SPARK East.

In the current budget recommendation, the proposed millage has been increased to 0.04 mills, which would raise $603,000. (The millage would levy $4 for every $100,000 of a property’s taxable value.) In addition to Ann Arbor SPARK and SPARK East, the funds would be allocated to several other groups: Eastern Leaders Group ($100,000); 4H activities ($60,000); horticulture ($27,000); agricultural innovation ($15,000); Food System Economic Partnership ($15,000); Heritage Tourism ($50,000); and to pay for a director of economic development and energy ($87,000).

Ping said that she and some other commissioners would have a hard time supporting this millage, given how many other items have been loaded into it beyond the original two.

Finally, Ping asked whether other entities were contributing to support local nonprofits, as the county does. Was the county putting in more money than any other government? Mary Jo Callan, head of the joint county-city of Ann Arbor Office of Community Development, which oversees distribution of funds to nonprofits, said the city contributed a comparable amount.

Conan Smith thanked the staff for their work and their efforts to engage the community in this process. Speaking to Guenzel, Smith said, “I’ve seen the weight on you over the past eight months or so, and your leadership has been extraordinary.” He said it was difficult to look at the loss of jobs, but that it was “simply incredible” to have dealt with a $30 million deficit with relatively minor job cuts. Smith also praised commissioner Ken Schwartz for finding revenue sources that they hadn’t been aware of – specifically, the Act 88 millage and a similar millage for indigent veterans relief, which is expected to raise $393,616.

Present: Barbara Levin Bergman, Leah Gunn, Jeff Irwin, Kristin Judge, Mark Ouimet, Ronnie Peterson (present during Ways & Means, absent during the board meeting), Jessica Ping, Wes Prater, Ken Schwartz, Rolland Sizemore Jr., Conan Smith

Next board meeting: Wednesday, Oct. 7 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.