County Board Agenda: Health, Finance Issues

Discussion at the Feb. 24 briefing for the Washtenaw County Board of Commissioners covered a broad range of topics, including health screenings for the 50-100 refugees who settle in the county each year, federal funding for low-income families, a drug discount card for local residents, and a bond refunding for financially-strapped Sylvan Township. Some commissioners had questions and concerns about all these topics.

The briefing, which previewed items on the March 3 board agenda, drew more than just commissioners and administrative staff. In addition to The Chronicle, two others attended Wednesday’s meeting: A candidate for the 11th District county board seat, currently held by Jeff Irwin; and the county treasurer, Catherine McClary.

McClary was there to answer questions related to two resolutions she had proposed – only one of them made it onto the March 3 agenda. In discussing the resolution that will be considered on Wednesday, McClary noted that delinquent taxes are on the rise, expected to reach around $40 million this year – more than double the amount just five years ago.

Refugee Health Program

Commissioners voiced several concerns over a new refugee health program, funded with $7,800 from the state Dept. of Community Health’s Office of Refugee Services. The program would pay for health screenings at the county health department’s clinic at 555 Towner St. in Ypsilanti.

In briefing the commissioners, Joanna Bidlack of the county administrator’s office reported that about 50-100 refugees settle in Washtenaw County each year, primarily in the Ypsilanti area. Currently they get health screenings from a clinic in Dearborn. The county was approached about this program by the state and the Jewish Family Services nonprofit, which serves as a refugee resettlement agency.

According to a cover memo on the resolution, the proposed medical screenings are designed to identify people with communicable diseases, or whose health conditions may impact resettlement – by affecting their ability to get a job or attend school, for example. The screenings would also identify conditions that might be grounds for exclusion (affecting their refugee status) or that would be significant enough to alert authorities at the relevant consulate.

The county health department currently provides some services to refugees – including tuberculosis screening and immunizations – without reimbursement.

In discussing the program, Wes Prater asked if these refugees are illegal immigrants. “I think we need to know if they’re illegals,” he said. Ken Schwartz said the status of “refugee” was a legal designation. His concern was whether they’d be bringing communicable diseases into the county.

Barbara Bergman raised another issue – if the screenings turned up a medical condition that needed treatment, then what? Who would pay for treatment?

Bidlack said she’d follow up, prior to their March 3 meeting, on the issues raised by commissioners.

Funding for Low-Income Families

A nearly $600,000 federal grant that requires $240,000 in county matching funds stirred discussion at Wednesday’s briefing. The board will be voting on a resolution to accept the funding at their March 3 meeting.

This community services block grant, administered by the county’s Employment Training & Community Services (ETCS) department, will help pay for a range of services for low-income families, including food assistance, job training and emergency emergency services.

The funds must be used for families at or below the 125% of the poverty level – for a family of four, they’d need to be making $27,000 or less to qualify, Joanna Bidlack told commissioners. Usually, eligibility is in the 200% or lower range.

“That’s an awfully mean grant,” Barbara Bergman said. Her objection was that the funding was too restrictive, and that perhaps the county’s share could be better used to serve a broader range of residents.

Wes Prater pointed out that the program is designed to help extremely low-income residents. “Other programs do exactly what you say, Barbara,” he added.

For Leah Gunn, the benefit was the matching funds. The county is leveraging its $240,000 into a total of $840,000, she said, and she’d hate to lose that additional funding.

Bergman conceded those points. “I’m really angry at miserly programs like this,” she said. “But half of something is better than all of nothing.”

Borrowing for Delinquent Taxes

Washtenaw County treasurer Catherine McClary attended Wednesday’s briefing – a resolution she’d proposed had been added to the board’s March 3 agenda. But commissioners decided not to add a second agenda item she had put forward.

The resolution that’s on the March 3 agenda permits the treasurer to borrow against the amount of delinquent property taxes in all 80 taxing jurisdictions throughout the county, including cities, townships, schools systems and libraries, among others. After March 1, these jurisdictions turn their delinquent taxes over to the county, and are reimbursed for that amount. The county treasurer then assumes responsibility for collecting these delinquent taxes.

In a cover memo to the board, McClary wrote that delinquent taxes have been increasing. Five years ago, the delinquent amount was $20 million – last year, that grew to $36 million. McClary expects it could reach as high as $40 million this year, and plans to borrow $50 million to hedge her bets. From the memo:

This bond issue is needed more urgently this year than in the past 13 years that I have served as County Treasurer. For the first time last year, we were not able to self fund our delinquent taxes. This year the County is facing cash flow issues more acute than in the past. The County ended 2009 with approximately $29 million dollars in cash in the General Fund of which $24 million represented a transfer in from the Revenue Sharing Reserve Fund. We will need the borrowed funds to operate the first half of this fiscal year.

This is a standard process, and commissioners treated it as such.

But they were not enthusiastic about a second resolution that McClary had put forward – one that corporation counsel Curtis Hedger did not add to the draft agenda for the March 3 meeting. Hedger told commissioners that McClary was requesting that the board appoint the treasurer as a special agent, which would give her certain powers. One of the powers it would give the treasurer is the ability to supplement her salary by up to 20%.

McClary objected to Hedger’s description, saying that the salary supplement isn’t in the resolution she proposed and that she’s made it clear in writing that she wouldn’t be increasing her salary. Hedger noted that the authority rests with the state statute that outlines the authorities of a special agent, not with the resolution granting her that status.

Hedger said the agency resolution is a regular request and that in the 16 years he’s been on the job, the board has never put it on the agenda. Commissioner Leah Gunn said that when it was discussed at a previous briefing, there’d been unanimous consent not to consider it.

Commissioner Jeff Irwin asked McClary what the advantage would be to passing the resolution. It would give the county’s budget office more flexibility, McClary said, to fund the treasurer’s office from the county’s general fund or from the delinquent tax fund.

Commissioners agreed not to put the special agent resolution on the agenda.

Bond Refunding in Sylvan Township

The board is being asked to approve a bond refunding for Sylvan Township, which would restructure the debt, lower the township’s bond payments and save an estimated $485,000 over the life of the bonds.

In 2001, the county issued $12.5 million in bonds for Sylvan Township, which has a contractual agreement with the county to make the bond payments. The township, located west of Chelsea, used the funds to build a water and wastewater treatment plant, intending to serve future development. The plan was to use revenue related to that development – from connection fees to the system – to cover the bond payments. Since then, however, the economy has soured and development hasn’t materialized.

The township hopes to take advantage of interest rates that are lower than they were at the time the bond was issued. In outlining the resolution, Joanna Bidlack of the county administrator’s office noted that timing is important, because a bond payment is coming due soon.

Some commissioners were concerned about whether the county would “get stuck with the bill.” Curtis Hedger, the county’s corporation counsel, said the county was the guarantor and would be required to pay, but they had several options. One of those would include going to court and getting a judgment levy – allowing the county to levy a court-ordered tax on residents to cover the bond payments. Such a tax would be exempt from Headlee rollbacks, he added.

Commissioner Wes Prater noted that this wasn’t the first time they’ve had an issue with Sylvan Township. Ken Schwartz recalled that a developer failed to pay a special assessment a few years ago, which caused problems for the township.

If the board does nothing, Hedger said, the situation will become much more difficult. Another factor: The township is hoping to sell the water and wastewater system, he said. Later, it was clarified that neighboring Chelsea might be the buyer.

Hedger also clarified that the current bond ended in 2023. In the refunding, the county would be putting out a new 20-year bond issuance of $10.4 million, starting this year.

Schwartz reported that the county’s board of public works, on which he serves, had held a special meeting on Monday – this kind of financing is “just one of the things the county does,” he said. Hopefully in four or five years, he added, the situation will right itself.

Internal Financial Controls

A resolution by Wes Prater to form a committee that would review the county’s internal financial controls was on the March 3 draft agenda. Prater had initially brought up the topic at the board’s Feb. 17, 2010 meeting, but it was tabled by commissioners.

At Wednesday’s briefing, Prater said he wanted to remove the resolution from the March 3 agenda and push it back until the county’s auditors had a chance to make a presentation to the board. County administrator Bob Guenzel had previously suggested scheduling a working session to bring in Mark Kettner of Rehmann Robson and county accounting manager Peter Collinson, to review with commissioners the existing internal controls.

Request for Proposals, Drug Discount Plan

Commissioner Jessica Ping brought up two items for consideration that weren’t on the March 3 agenda.

RFP on Spending Patterns

First, she suggested that the county issue a request for proposals (RFP), soliciting bids from vendors who analyze spending patterns and identify ways for the county to cut purchasing costs. At the board’s Nov. 19, 2009 working session, which Ping chairs, commissioners had heard a presentation about this kind of service from Fred Manuel of Alliance Cost Containment.

Barbara Bergman said she didn’t think the board had decided whether they needed this service. Ping said it was just an RFP, not a decision to proceed. Ping also noted the way the business model works doesn’t have a downside for the county. Alliance Cost Containment, for example, takes a percentage of whatever savings it identifies and implements. “It doesn’t cost us anything,” Ping said. “Why wouldn’t we do that?”

Wes Prater supported the RFP, saying that with this economy, they need to be looking at ways of doing business less expensively, “and this is one of them.”

The consensus was to direct staff to develop an RFP. Issuing an RFP does not require board approval.

CVS/Caremark Drug Discount Program

Ping also wanted to move forward on considering a drug discount program offered by CVS/Caremark. Commissioners discussed the program at their Sept. 2, 2009 board meeting. From Chronicle coverage:

Steve Rohm from CVS/Caremark told commissioners that 1,250 counties nationwide participate in the drug discount program. If Washtenaw County participates, cards would be offered to any resident not covered by insurance – there’s no enrollment, fee or registration required, no age limitations or limits on usage. Residents would take the card to participating pharmacies to get some type of discount on their prescription drugs. The discounts would be set by each pharmacy – Rohm said that consumers typically get around a 22% savings. Pet prescriptions are also covered, he said.

At Wednesday’s briefing, Ping said she knows several people who are out of work, who could use the help but who wouldn’t sign up for a county program because of pride. The CVS/Caremark plan is structured in a way that would be more likely for them to participate, she said.

Ping also noted that because the plan is offered to members of the National Association of Counties – Washtenaw County is a member – “we’re already paying for this.”

Kristin Judge, who was taking part in the briefing by phone, said the savings for county residents would be considerable. “I think it would be wrong of us not to do this,” she said. Ping added that the city of Saline is already participating in the program, and that residents have saved over $50,000 in the last six months.

Leah Gunn asked if it would be limited to CVS, or whether participants could use the plan to get discounts at other pharmacies. Ping clarified that many pharmacies offer discounts through the plan, including independents like Wenk’s.

Barbara Bergman objected to the program. She said it gave an unfair advantage to CVS, since that pharmacy’s name would be displayed on the cards given to participants. Ping said that it wouldn’t be prominent on the cards.

Bergman said it made more sense if pharmacies would just lower their prices in the first place. Ping pointed out that this was a larger issue over which the board had no control.

Curtis Hedger, attorney for the county, reported that CVS/Caremark agreed to grandfather in existing drug discount plans like the one offered by the Washtenaw Health Plan. [The WHP, designed for low-income residents, has reached capacity and is not accepting new participants.]

Other than that, the contract with CVS/Caremark stipulates that the county can’t use competing plans – that was a concern to some commissioners. Jeff Irwin suggested eliminating that item in the contract. He recalled that at the CVS/Caremark presentation in September, Rohm had indicated they wouldn’t enforce that part of the contract. Gunn noted that as long as it was written into the contract, CVS/Caremark could enforce it, if they wanted to.

Hedger wasn’t sure CVS/Caremark would agree to that change. He said he hadn’t reviewed the contract or talked to their representative since October, and that he needed to review it again. Commissioners agreed to put the item on the March 17 meeting agenda for further consideration.

Public Commentary

The bi-weekly briefings of the county board of commissioners, though informal, must conform to the requirements of Open Meetings Act. That means that a representative from the county clerk’s office – deputy clerk Jason Brooks – attends and takes minutes. There’s also opportunity for public commentary, though typically no one from the public attends.

On Wednesday, however, when Joanna Bidlack asked if anyone wanted to speak during public commentary, all eyes turned to Alice Ralph. Ralph noted the attention, but demurred – she said she’s running for the board’s 11th District seat, and was just there to observe. The 11th District is currently represented by Jeff Irwin, who is running for state representative this year.