County Reviews Major 2010 Initiatives

Washtenaw County Board of Commissioners working session (Feb. 18, 2010): At Thursday’s meeting, commissioners reviewed 23 major initiatives underway in 2010, getting updates from the administration and giving feedback to help guide the work.

Discussion ranged from concerns over upcoming statewide changes at the MSU Extension program, which commissioner Leah Gunn described as a “decimation,” to staffing levels at the soon-to-be-completed jail expansion. The board also discussed adding other initiatives to the list, such as developing an integrated funding model for local human services nonprofits. That effort includes the county, the city of Ann Arbor, the Ann Arbor Area Community Foundation and the Washtenaw United Way.

For this report, we group the topics thematically into three broad categories: public safety, administrative, and finance.

Public Safety

Budget concerns were threaded throughout the public safety initiatives.

Police Services Cost Analysis

Goal: To identify the county’s fixed overhead and total cost for contract policing.

Contract policing refers to the service provided by the sheriff’s department, whereby townships and other municipalities contract with the county for sheriff deputy patrols dedicated to their community. County administrator Bob Guenzel said he thought sheriff Jerry Clayton had done a good job of outlining this cost analysis initiative at the board’s Feb. 17 meeting. [See Chronicle coverage: "County Board Gets Update from Sheriff"] There may be philosophical differences, Guenzel said, but at least the cost related to providing sheriff deputy patrols will be clarified. Current contracts run through 2011 and will need to be renegotiated.

Lump Sum Agreement

Goal: To negotiate new lump sum agreements with the Trial Court and 14A District Court.

Though the courts are a separate constitutional body, they are funded by the county. And that funding requires approval by the board of commissioners. For several years, the county and the courts have had an agreement that calls for a lump sum payment to be made by the county to the courts, which the administrators of the courts then use as their budget. The Trial Court is getting a $13.4 million lump sum payment in 2010 – a $1.2 million cut from 2009. The 14A District Court’s 2010 lump sum was $5.08 million, down from $5.28 million last year.

Terms of the agreement call for a one-year notification if either party wants to modify the arrangement, Bob Guenzel said. The county administration made that notification to the courts in December 2009, but Guenzel said no work had been done on this so far. He and Curtis Hedger, the county’s corporation counsel, will be working with judges Donald Shelton of the Trial Court and Kirk Tabbey of the 14A District Court to renegotiate the agreement.

Some commissioners questioned the lump sum approach. Conan Smith said the board needed line-item flexibility that the lump sum payment doesn’t provide. While preparing the 2010-2011 budget, the county had asked for information from the courts last year that wasn’t forthcoming, he said. The board’s legislative responsibility is to guide the budget process, he said, adding “It’s the sole check we have on the judiciary in county government.” Smith said he was not in favor of a lump sum payment.

Barbara Bergman said if they do the lump sum again, it should be limited. “I want much more control than we’ve had over that budget,” she said. Jeff Irwin noted that most courts in other counties aren’t funded by lump sum payments.

Guenzel described the lump sum approach as a model for the state, saying that it has served the county well in its budgeting process, and shows a willingness to partner with the courts.

Jail Expansion/14A-1 District Court Construction Project

Goal: To finish project on time and on budget.

Construction of the jail expansion and new 14A-1 District Court is on target, Bob Guenzel reported. He and sheriff Jerry Clayton hope to schedule tours of the facility with small groups of commissioners in early March. The project is set to be completed this spring or early summer. [Link to jail expansion reference materials on the county's website.]

The expansion will add 112 beds to the current 332 beds at the Hogback Road facility. Guenzel reminded commissioners that they’ll start refurbishing the older facility as soon as the new section opens, so they won’t have full use of the entire facility until that work is done. He also reported that there’s still a contingency fund available for the remainder of the project, but it’s small.

Barbara Bergman told Gene DeRossett – chief administrative officer for the 14-A District Court, who attended Thursday’s working session – that she hoped the large meeting room in the new court facility would be available for community meetings. There’s a shortage of space for large meetings, she said. Later in the meeting, during the time set aside for public commentary, DeRossett assured Bergman that he’d recently talked about it with chief judge Kirk Tabbey, and that the meeting space would be available for scheduling.

Jail Staffing Levels

Goal: To develop recommendations for jail staffing levels and budget amounts, which will require board approval.

Bob Guenzel said they’ve made tremendous progress in working out how much additional staff will be required when the jail expansion is complete. Taking the lead on this has been Rick Kaleda, commander of jail operations, and Jennifer Watson, the county’s budget manager. Guenzel said sheriff Jerry Clayton hopes to bring staffing and funding recommendations to the board at their March 18 working session.

Juvenile Court Division Move to Ann Arbor Courthouse

Goal: To finish the project on time and on budget.

The county’s juvenile court is currently located at 2260 Platt Road. Verna McDaniel said the county expects to see $300,000 in structural savings from relocating it to the downtown Ann Arbor county courthouse, at the corner of Main and Huron.

Commissioner Ken Schwartz has been asked to serve on a committee overseeing this transition. McDaniel noted that the board has the final decision about making the move, and that there are two major issues: 1) protecting juveniles from adult offenders who’ll be in the downtown courthouse, and 2) parking.

Commissioner Barbara Bergman said she didn’t care about the $300,000 in savings. It was wrong to bring juveniles into such close contact with adult offenders, she said, adding that she’d “move heaven and earth” to make sure they were protected – even as she acknowledged that the kids “weren’t all ballet dancers.” She said that Ronnie Peterson, who did not attend Thursday’s meeting, agreed with her, but that she assumed she’d lose this fight.

Both Conan Smith and Wes Prater said they agreed with Bergman. Smith said that if the county’s orientation is beyond the bottom line and more about providing humane treatment to families, then this project needs work. He suggested exploring resources at the University of Michigan to help, such as those at the School of Social Work.

Prater thinks the downtown courthouse is already too crowded, and that it’s a mistake to bring in the juvenile court division on top of that. The building on Platt Road is sound, he contended, though it needs some work. Rolland Sizemore Jr. asked what it would cost to renovate the building, versus tearing it down. He also was concerned that there aren’t enough appropriate places to eat in Ann Arbor, for families who’d have to come to the downtown courthouse.

Schwartz said the committee, which includes about two dozen members, is sensitive to the issues being raised. He also noted that adults and juveniles are already both using the downtown courthouse, since juveniles charged with felonies are brought there.

Administrative Initiatives

Transitions as senior leaders retire, and opportunities to reorganize as a result, are among the administrative initiatives on the table in 2010.

Administrator Transition

Goal: To hire the next county administrator and develop a smooth transition plan, including the hiring of a deputy administrator.

This item is well underway, as deputy administrator Verna McDaniel prepares to take over for retiring county administrator Bob Guenzel. Her contract for the position is being negotiated and is expected to come before the board for a vote on March 17. At Thursday’s meeting, the transition was reflected in the number of items on which McDaniel took the lead in reporting to the board.

She’ll also be hiring a new deputy administrator, as well as a new finance director to replace Peter Ballios, who retired at the end of 2009. The finance director posting doesn’t close until Feb. 24, and they’ve already received over 50 applications, McDaniel said. The deputy administrator’s job was posted on Feb. 15, and nine people had applied as of Thursday. The filing deadline for that job is March 9.

Planning Initiative

Goal: To focus on the long-term role of county government, priorities and organizational structure.

This item wasn’t discussed at Thursday’s meeting – when Wes Prater asked why they’d skipped it, Bob Guenzel noted that they’d talked about it at length the previous night, at their regular board meeting. Prater said it was the most important one, and that he didn’t want it to drop off their radar.

Ann Arbor City/County Collaboration

Goal: To establish a master plan for collaboration, building upon work done with IT department and the sheriff.

Verna McDaniel noted that the partnering of the city and county information technology departments, as well as the co-location of the city and county dispatch operations, were two examples of successful collaboration. The administration would be bringing more ideas to the board in the future.

Kristin Judge said she’d like to see the county collaboration extend beyond Ann Arbor. “I really feel we could be doing more in this area,” she said.

Leah Gunn said she knew the county was already collaborating with other entities beyond Ann Arbor, including IT partnerships with the city of Ypsilanti and Pittsfield Township. The county is also handling human resources for the Washtenaw County Road Commission, she noted. Gunn asked for the administration to provide a list of all such partnerships, as well as those that are in the works.

Ken Schwartz said that even though he doesn’t represent the city of Ann Arbor, he doesn’t mind the county having a strong partnership with the city. Ann Arbor is the economic locus for this community, and everybody benefits from it. That said, he didn’t want to forget the other communities, and said that dispatch operations in particular hold promise. The county could take on dispatch for all the municipalities – it’s something worth exploring, Schwartz said.

Jessica Ping, noting that she represented nine municipalities, said that some of them wouldn’t want to partner. Even so, it’s important to reach out to them, she said.

Gunn, who chairs the Urban County partnership, said she’d recently sent out letters to the leaders of municipalities that weren’t part of the group, asking them to join. The Urban County is a partnership that pools funding from the federal Community Development Block Grant program. At this point, 11 municipalities in the county are part of that group.

Facilities Master Plan

Goal: To update the county space plan in light of current vacancies and long-term desired organizational structure.

Verna McDaniel said they weren’t taking action at this point, but that she’d asked Dave Shirley, the county’s facilities manager, to give periodic reports to the board on vacancy rates and other issues related to the county-owned buildings and other properties. The last time the board had discussed the issue, she noted that they’d made clear the market needs to be right before they’d consider selling any of their facilities. Meanwhile, Shirley is working on a plan for how to generate revenue from a county-owned building on Zeeb Road that has “ample space,” McDaniel said. The board would be getting a report on that in the future.

ETCS Reorganization

Goal: To determine a plan for the organizational structure of ETCS, given the retirement of director Trenda Rusher.

Verna McDaniel reported that Trenda Rusher – the long-time director of the Employment Training and Community Services department, who retired at the end of 2009 – is staying on to help with the administrative transition, through March 31. McDaniel is planning to work with the two groups that provide oversight to ETCS – the workforce development board and the community action board – to get input about possible reorganization. She said she’ll also be talking with other stakeholders in the community.

Kristin Judge described ETCS as a well-oiled machine, and cautioned that whatever changes take place shouldn’t hurt what’s already working well.

Conan Smith asked if McDaniel had considered moving the weatherization program over to the newly created department of energy and economic development. The program is now operated by ETCS and received more than $4 million in federal stimulus funding last year. McDaniel said that both Tony VanDerworp, director of the new energy and economic development department, as well as Mary Jo Callan, director of the office of community development, would be asked for input. The goal is to look at all the programs and align those with similarities, McDaniel said.

MSU Extension Reorganization

Goal: To determine the organizational structure for the MSU Extension program, given statewide modifications.

The Michigan State University Extension program received attention last year during the county’s budget process, as funding cuts were considered for a range of programs that the county has traditionally supported. Though the county is only one of several sources of financial support, without county funding it was unclear whether the local extension could remain open. Dozens of residents attended county board meetings during the summer to show their support for the extension. Commissioners ended up passing a special millage that in part is earmarked to fund extension services.

Last fall, the extension program faced another threat, as it seemed likely that state funding would be pulled – until Gov. Granholm decided not to veto that funding. [See Chronicle coverage: "Local MSU Extension Saved from Closing"]

Now, a statewide reorganization of the program will have an impact on the county’s extension program, but it’s still unclear how it will be affected, McDaniel said. Nancy Thelen, extension director for Washtenaw County, will be coming to a future working session to explain the changes. Rather than having a director for the county, McDaniel said, the extension will be organized throughout the state into six-county clusters. The director positions are being eliminated, she said, with the jobs being changed to “educators.”

Leah Gunn said it sounded like a decimation of the program, and she was very upset about the changes. Several other commissioners agreed.

WCHO/CSTS Integration

Goal: To further integrate the administration functions between these two organizations.

The Washtenaw County Health Organization, a partnership with the University of Michigan and the county, is led by executive director Patrick Barrie. Verna McDaniel said that Barrie and other administrators are working to identify duplication of services with the county’s Community Support & Treatment Services (CSTS) department. CSTS director Donna Sabourin reports to both McDaniel and Barrie.

Barbara Bergman, who serves on the WCHO board, said the two groups had drifted apart over the years, and that bringing them together would make the delivery of services not only more efficient, but also improve quality.

Transparency of Government Initiative

Goal: To establish an online site that holds key data about county operations.

Verna McDaniel said they’re working to pull information together to post in one place, possibly to be called Transparency Washtenaw. Leah Gunn noted that the city of Ann Arbor is already posting much of its raw data online, down to its check register.

Barbara Bergman said that while it was important to be transparent, it was also important to be selective. Some information shouldn’t be easily available, she argued. It should be hidden deeply enough so that people who can’t balance their checkbook won’t get confused.

Kristin Judge said she felt this should be a board initiative, not an administrative initiative. She reminded commissioners that transparency was a federal directive from the president – people want to see their government’s checkbooks. “And they should,” Bergman responded – but it shouldn’t be the first button they press.

Conan Smith suggested prioritizing data by looking at what information people were already pulling from the county’s website. He said he was excited about the possibility of third-party apps – software applications developed by people outside of county government, but using county data.

FTE by Department

Goal: Quarterly reporting to the board about the number of full-time equivalent jobs, including an explanation of changes.

Verna McDaniel said that commissioners should let her know if there’s any other information they need, in addition to the regular reports on FTEs.

Wes Prater pointed out that they hadn’t really reduced the county’s headcount at all, and that given the budget situation, he expected they’d have to go through job reductions in the next year or so. “It’s not gonna be pretty at all,” he said. Property values will continue to fall, affecting tax revenues, he said. The board needs a plan of action to deal with these issues.

Ken Schwartz said the discussion about priorities that they’d started at their Feb. 17 board meeting would be helpful in developing a plan of action.

Finance

A range of budget and finance issues were covered, including a coda to the discussion on internal financial controls that commissioners started at their March 17 meeting.

Finance & Budget Reorganization

Goal: To determine an organizational structure for finance and budget, given the retirement of the finance director.

Verna McDaniel stated her intent, as incoming county administrator, to merge the finance and budget departments. Currently, budget manager Jennifer Watson is part of the administrator’s office. McDaniel said she wanted the finance director, when hired, to have input into the reorganization.

Kristin Judge said the board was in favor of decreasing the number of departments, and this was a good move in that direction.

Responding to a question by Conan Smith, McDaniel said that budget and finance were two distinct disciplines, but that the functions wouldn’t be diminished by operating in the same department. Wes Prater agreed, saying there needed to be a seamless operation between the two, and that it made sense to merge.

2010 & 2011 Budget Monitoring

Goal: To provide monthly budget projections with quarterly updates to the board on the status of 2010, including key indicators and impact on 2011.

Everyone’s eye will be on the April equalization report, Verna McDaniel said, which will give the county a much clearer idea of the amount of tax revenue that will be collected for the year. [For an explanation of the process, and a presentation of last year's report, see Chronicle coverage: "Washtenaw County: Equalize This"]

Revenue Trending Models

Goal: To enhance existing revenue-trending models.

The past will not be an indicator of future, Verna McDaniel said, so they’ll need to keep abreast of trends, and respond accordingly.

Leah Gunn reiterated her concern over state revenues, and suggested asking Kirk Profit to give the board an update on the situation in Lansing. Profit runs Governmental Consultant Services, Inc., a firm that does lobbying for the county and several other local municipalities, including Ann Arbor.

Revenue & Grants Pursuit

Goal: To establish a strategic plan for increasing and diversifying county revenue sources.

Verna McDaniel put it simply: “Let’s do it!” Federal grants were a key element of this, she said. Budget manager Jennifer Watson will be taking the lead on this initiative.

Kristin Judge asked whether the county needed to hire someone to handle this task. McDaniel said that within each department, staff is handling the search for grants and other revenue sources that could help fund county programs.

Wes Prater said they needed to put pressure on their lobbyist, Kirk Profit. He should be providing information about where there might be funding available, Prater said. McDaniel said she talks with Profit every week, as well as with Andy LaBarre, the district administrator for U.S. Rep. John Dingell.

Judge said that as members of the Michigan Association of Counties (MAC), the county is entitled to resources from that group, and should use them.

Fund Balance Management

Goal: To provide annual reporting to the board about fund balances, levels of restriction, status reports on policy and best practices about the level of the county’s fund balance.

Keeping the board fully informed was important, Verna McDaniel said. To do that, the administration needs to provide clarity in its reporting.

Cash Management Policy Development

Goal: To develop a policy on county cash management and report on its status; to keep long-term cash flow projections in alignment with projected budget modifications.

Verna McDaniel said that budget manager Jennifer Watson and Pete Collinson, the county’s accounting manager, would take the lead on this, making sure the county maintained a positive cash balance. The target date for developing a plan is March 31.

Review Approach for Indirect Costs (CAP)

Goal: To determine if the county should continue with its current CAP methodology or alter it, to have a clearer understanding and potentially increase revenue.

There was no discussion of this item. The cost allocation plan (CAP) sets a charge that’s levied on each county unit and designed to cover general costs like administration, technology, building use, and insurance, among other things. It’s intended to reflect the county’s true cost of doing business, but is sometimes criticized as being set too high.

Review Internal Controls

Goal: To establish a policy on internal quality control checks within support services as well as direct service departments.

Bob Guenzel joked that Verna McDaniel had assigned him this item to discuss – at the board’s Wednesday meeting, there had been an animated discussion about the topic, following Wes Prater’s proposal to form a committee to review the county’s internal financial controls. Prater was concerned about the recent arrest of a county employee who is accused of embezzling more than $100,000 over a 16-year period.

Guenzel told commissioners that he had asked Diane Heidt, the county’s human resources and labor relations director, and risk management coordinator Judy Kramer to make a written report about the incident, describing how the county is responding. He also suggested that Mark Kettner of the accounting firm Rehmann Robson, which handles the county audits, and county accounting manager Peter Collinson come in for a working session with commissioners. They can go over the current internal controls, and answer any questions, Guenzel said.

Leah Gunn said she liked that approach, because the public could then be informed as well. [Working sessions and regular board meetings are broadcast on Community Television Network (CTN). Video of the meetings is also posted on the county's website.]

Kristin Judge reminded commissioners that when Kettner gave a presentation of the audit last year, he told them it was their responsibility to understand the county’s internal financial controls. “It’s our job,” she said.

Noting that he had full confidence in the county’s finance and budget staff, Prater said he wasn’t on a witch hunt. He simply wanted to review the policies and procedures, to make sure nothing was overlooked.

Presentation of Audit

Goal: To establish a more comprehensive annual report presentation that aligns year-end status with key indicators.

Bob Guenzel reminded commissioners that years ago, the county’s audit typically wasn’t completed until September. It was former deputy administrator Frank Cambria and finance director Peter Ballios who pushed to have the audit completed much earlier, he said, and now it’s done by April 1. Though they have an outside firm that reviews the work, he said, most of the audit is completed by county staff.

What’s Not on the List?

When the review of initiatives wrapped up, Jeff Irwin noted that while the list focused on internal work, it was missing the element of external leadership. He recalled how Brian Nord, an advocate for the homeless, had attended a previous board meeting and had spoken about the county’s role in ending homelessness. Irwin cited the Blueprint to End Illiteracy as another example. These were among the most important things the county did, and needed to be included among the major initiatives, he said.

Ken Schwartz said that the discussion about internal measures had been a good one, and that they wouldn’t be successful with their external work until they got these items in order.

Kristin Judge asked that the county’s role in funding human services be added to the list. Verna McDaniel said she was at fault for the fact that it wasn’t included – there were discussions underway about that topic with the Ann Arbor Area Community Foundation and the Washtenaw United Way, she said. Before bringing it to the board, McDaniel wanted to make sure those conversations had traction.

Taking part in this effort to coordinate funding are: Mary Jo Callan, director of the joint county/city of Ann Arbor office of community development, which is responsible for making recommendations about county and city funding for human services nonprofits; Phil D’Anieri, program director for the community foundation; and Deb Jackson, Washtenaw United Way director of community investment. They’ll be coming back with recommendations sometime in May, McDaniel said.

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

Absent: Mark Ouimet, Ronnie Peterson