Long Debate, But County Transit Moves Ahead

Washtenaw County board of commissioners meeting (July 11, 2012): Two agenda items dominated the discussion at the recent county board meeting: (1) an interim plan for the Washtenaw Head Start, reducing staff as the county prepares to hand over the program to a new entity, and (2) documents related to a proposed countywide transit authority.

After a 2.5-hour debate, county commissioners on a 7-4 vote gave initial approval to a four-party agreement and articles of incorporation that lay the foundation for a broader public transit authority in this area – tentatively called the Washtenaw Ride Transportation Authority. Voting against the agreement and articles of incorporation were Alicia Ping, Wes Prater, Dan Smith and Rob Turner. The board also set an Aug. 1 public hearing to gather feedback on the agreement. A final vote is expected to take place at that Aug. 1 meeting.

The other parties in the agreement include the cities of Ann Arbor and Ypsilanti, which both would contribute existing millages to the new authority. The fourth party to the agreement is the Ann Arbor Transportation Authority, which is spearheading this effort and would shift about $200 million in assets to the new entity. The governing bodies of those three parties have already approved the transit documents. [.pdf of four-party agreement and articles of incorporation]

The board debated several amendments put forward by Dan Smith, but none of the amendments secured enough votes to pass. One of the main arguments against making any changes came repeatedly from Leah Gunn, who noted that amendments made by the county board would require that the other three parties reconsider the documents. She called it a “foolish waste of time.”

Smith argued that this was the first time that formal, representative input has been heard from communities outside of Ann Arbor and Ypsilanti. The amendments were intended to make the new transit authority more attractive to smaller municipalities, who’ll have the option of opting out. Smith raised concerns that the current governance structure doesn’t provide the best possible representation for taxpayers.

Another issue drawing heated discussion related to Head Start, which provides pre-school services to 561 local children, ages 3-5, and their families. Last year, the board voted to relinquish its 46-year administration of the program on July 31, 2012. But the transition to a new administrator – a process overseen by the federal Head Start program – hasn’t moved as quickly as expected. So the county agreed to a one-year extension to continue administering the program, through July 31, 2013.

On July 11, the county board was asked to approve changes to the program from Aug. 1, 2012 through July 31, 2013 – as part of authorizing a federal grant application for the program. Ronnie Peterson cast the sole vote against the changes, and objected strenuously to any program cuts. He voiced his concerns at length, and asked – as he has in the past – that independent experts be brought in to discuss how the changes will impact the children. He also vowed to try to keep Head Start under the county’s administration, rather than relinquishing control. The issue will be addressed at an Aug. 2 working session, but it’s unlikely that the board will reverse its decision to cut ties with Head Start.

Other commissioners objected to Peterson’s contention that they didn’t care about poor children. Rob Turner urged board chair Conan Smith to form a coalition of local educators and government leaders to tackle the problem of educational disparities within the county.

Separately, the board passed a resolution supporting the selection of the Washtenaw Intermediate School District as the next local Head Start administrator. The selection will be made by federal Head Start officials.

In other action, commissioners heard public commentary and gave initial approval to exempt bed & breakfasts and cottages from Washtenaw County’s 5% accommodations tax. In a separate vote, the board set a public hearing for Aug. 1 to seek input on the proposed ordinance change. A final vote on the resolution is expected at the board’s Aug. 1 meeting.

That Aug. 1 meeting will also include a public hearing and vote on a brownfield financing plan for a residential development at 618 S. Main St. in Ann Arbor. The apartment complex is located at the site of the former Fox Tent and Awning, north of Mosley between Main and Ashley, and is being put forward by Dan Ketelaar’s Urban Group Development Co.

In another development-related matter, the board authorized a contract with Sylvan Township related to debt repayment on bonds issued 11 years ago for a water and wastewater treatment plant. It’s another attempt to establish an arrangement under which Sylvan Township will repay the county for covering bond payments – contingent on Sylvan Township voters approving a 20-year, 4.4 mill tax that’s on the Aug. 7 ballot.

Countywide Transit

The long, complex process to develop a countywide transportation system inched forward last week, with the county board’s initial consideration of a four-party agreement and articles of incorporation for a broader public transit authority based on Act 196 of 1986.

The effort has been led by the Ann Arbor Transportation Authority. Representatives from AATA – including CEO Michael Ford and board chair Jesse Bernstein – attended the county board’s July 11 meeting.

The county would not be contributing assets or a millage to a new authority. Nor would the county board be asked to put a countywide millage request on the ballot. Rather, the county’s role would be for the county clerk to file articles of incorporation with the state – an action to create a transit authority under Michigan Act 196. When formed, the Act 196 board would have authority to put a funding proposal on the ballot for voters to consider. A financial advisory group that’s been working on this effort has suggested that revenues equivalent to a 0.5 mill tax would be needed to cover the cost of expanded services for the first five years. [.pdf of financial advisory group report]

For recent general Chronicle coverage of this transit effort, see “Differences on Countywide Transit Debated,” ”County Board Updated on Public Transit Plans,” “Ann Arbor Council Re-OKs Transit Docs” and “AATA Board OKs Key Countywide Documents.”] Additional information is also available on the Moving You Forward website devoted to the expanded transit effort.

Countywide Transit: Public Commentary

Two people – both of them candidates for the Michigan House of Representatives in District 53 – spoke in support of expanded public transit.

Jeff Irwin, a former county commissioner from Ann Arbor who is running for re-election as state representative for District 53, told the board that it was nice to see so many friends. He urged them to deeply consider the countywide transit plan, as a way for communities to come together. If you look at the proposed service plan, he said, the services line up well with the amount of funding that various communities will be providing. It’s important that financial contributions are commensurate with services.

Irwin noted that there might be questions about legislation in Lansing that could affect aspects of the county plan, but he urged the board not to hold up the plan by waiting for action at the state or federal level. It’s time for the county to control its own destiny, he said. Irwin doesn’t believe there will be any changes in Lansing regarding revenue options from gas or sales taxes, although he said he’d continue to work to provide other options for public transit. He also didn’t believe legislation setting up a regional transit authority (RTA) would be passed this year. And even if it does pass, Irwin didn’t think it would include Washtenaw County. More likely it will address issues related to the tri-county area of Oakland, Macomb and Wayne counties. Including Washtenaw would add a layer of complication, he said.

Irwin concluded by saying he’d love for Lansing to get it right, but this is an important issue and the county should move forward on its own.

Thomas Partridge, a frequent speaker at various local government meetings, addressed the board during the evening’s two opportunities for public commentary. He described himself as a long-time advocate for affordable transportation, and he urged the county board and the AATA to bring a millage proposal to voters as soon as possible, to get tax revenue for public transit. He said he’s running for state representative because he’s dissatisfied with the current leadership in Lansing. It’s time for significant improvements in transportation of all kinds, he said.

Countywide Transit: Board Discussion

Before the discussion began in earnest, Conan Smith jokingly “called the question” on the resolution – a parliamentary move that essentially means “Let’s vote now.” It was a move that would be repeated seriously by other commissioners multiple times throughout the debate, in an effort to push forward the item.

The bulk of the 2.5-hour discussion focused on several amendments brought forward by Dan Smith. He had circulated the amendments before the meeting, and earlier versions had been discussed at the board’s June 14 working session. In very general terms, the amendments centered on the following topics: issues of local versus regional control; the process by which local communities could opt-out or opt-in to the new transit authority; parity between Ann Arbor and other municipalities; and how details of the service and funding plan would be communicated.

This report organizes the discussion thematically, summarizing the comments and concerns raised by commissioners.

Countywide Transit: Board Discussion – General Comments

Rolland Sizemore Jr. said he hoped the documents would be approved that evening. He noted that Pete Murdock, an Ypsilanti city councilmember, was attending the meeting, and that two Ann Arbor city councilmembers [Sabra Briere and Jane Lumm] had attended the June 14 working session. Other than that, no elected officials had come to the county board about this issue, he said, so he didn’t want to hear any whining from them after it passed.

Ronnie Peterson clarified that the agreement is costing the county “zero dollars.” He asked whether the documents have been available for any citizen or organization to review. Curtis Hedger, the county’s corporation counsel, replied that the documents have certainly been reviewed by the four parties involved in the four-party agreement, and have been available as part of public agendas.

Peterson also asked what the county’s obligations and responsibilities are, after the board approves the four-party agreement and articles of incorporation. The main obligation, Hedger said, is to file the articles of incorporation after hearing from AATA that all the conditions of the four-party agreement have been met. At that point, the Act 196 authority is a separate legal entity, and the county has little to do with it unless it is dissolved. The county would have no financial obligation, Hedger said. There could be a liaison from the county to the Act 196 board, but there would be no formal role in governance.

Noting that the county doesn’t have a dime committed to this venture, Peterson praised AATA staff and said they’ve done a marvelous job of putting this together. He’s been advocating for an expanded public transit system for 20 years, and it’s a great thing for the county.

Wes Prater commented on the transparency of the process so far. It’s true that the four parties have been involved, he said, but this meeting was the first time that the board had seen these documents. And of the 28 municipalities in the county, Prater believed only six had seen the documents.

Sarah Pressprich Gryniewicz, AATA’s community outreach coordinator, clarified that the information had been sent out to all communities in the county. When the staff began developing details of the four-party agreement and articles of incorporation, they worked with a committee with representatives of the four parties as well as the unincorporated U196 board.

Dan Smith noted that the board’s action in approving the documents “sucks in” the townships, because after the articles of incorporation are filed, it requires action by the local governing bodies to opt out of the transit authority. The township boards haven’t formally weighed in on the articles of incorporation, he said. This county board meeting is the first time that formal, representative input has been heard from communities outside of Ann Arbor and Ypsilanti, he said.

City councils for Ann Arbor and Ypsilanti both amended the documents, D. Smith observed. And since it appears that a millage vote won’t be on the ballot until 2013, there’s time for the county board to amend the documents as well. Municipalities will be making decisions about whether to opt out based on the articles of incorporation, he said. His amendments were intended to make it more attractive for municipalities outside of Ann Arbor and Ypsilanti to participate.

Felicia Brabec asked if AATA had followed up on some concerns she’s raised at the June 14 working session, about coordinating transit service plans with Pittsfield Township officials. Ford said they’re still working on it, and AATA staff is working closely with the Pittsfield Township supervisor [Mandy Grewal].

Wes Prater objected to seeing continued changes that have just “popped up” in the documents. He cited the question of whether portions of a municipality can opt out – at the precinct level, for example. Originally, commissioners had been told that only the entire jurisdiction could opt in or out. But AATA staff had recently given them a response to questions, he noted, which stated that individual precincts could opt in or out.

Jesse Bernstein, chair of the AATA board, responded to Prater. As soon as the staff realized that the Act 196 legislation allowed for individual precincts to opt in or out, the AATA provided that information. It gives individual units of government more flexibility.

Prater wondered why this had come to light only recently, even though AATA has been working on this effort for two years. He also noted that Washtenaw County is creating this new transit authority, so why doesn’t the county have the right to determine how the authority operates? And how does the county opt out?

Prater also objected to the fact that communities that have already decided to opt out of the initial planning phase will have to formally opt out again, after the articles of incorporation are filed.

Bernstein stated that the AATA has been in contact with communities throughout the county. ”We are not going to surprise anybody with this,” he said. The plan won’t move ahead until there’s consensus on services and on how to pay for expanded service. If there’s no agreement about how to fund the new authority, the AATA will continue to operate as it has, he said, and continue to expand services as it can.

Some commissioners, including Rob Turner, stated that they did not want to give the documents final approval that evening. [Resolutions are considered and voted on first at ways & means, a committee on which all commissioners serve and which meets immediately prior to the regular board meetings. Typically resolutions are considered for a final vote at the regular board meeting two weeks later. However, the board only meets once a month during the summer, so it's often the practice that resolutions will be given both initial and final votes on the same night. If an item isn't put on both the ways & means and the board agendas before the meeting, it takes eight votes for the board to push forward a resolution from ways & means to be considered for a final vote that same night at the board meeting.]

Turner said he wanted the time until the final Aug. 1 vote for municipalities in his district to review the documents.

Countywide Transit: Board Discussion – Amendments (Qualifications)

Dan Smith’s first amendment to the articles of incorporation would ensure that people appointed to the Act 196 board are residents of Washtenaw County. [Throughout this report, deletions are indicated with strike-through; additions are in bold italics.]

SECTION 4.07: BOARD QUALIFICATIONS

All Authority directors shall be residents of Washtenaw County and at least eighteen years old, shall be representative of public transportation interests as they exist in the County and other qualifications as detailed in the Bylaws of the Authority. Notwithstanding the above, any of these requirements may be waived by a governing body authorized to appoint directors under section 4.01 by resolution concurred in by not less than 2/3rds of that governing body’s directors. Directors may not hold office in violation of Michigan’s Incompatible Offices Act, MCLA 15.181-.185, or other similar law.

Wes Prater supported the amendment, saying it simplified the qualifications and made sure the appointees are residents of the county.

Felicia Brabec wondered why this amendment was needed. D. Smith replied that as they’d discussed at the June 14 working session, the Act 196 board will have taxing authority, so it’s important for the leadership requirements to be strong. He had originally advocated for even stricter requirements – that the directors should be residents of the districts that they were appointed to represent. But based on feedback from the working session, he had modified his original amendment. If experts are needed, then they can be brought in as consultants or a subcommittee, he said.

Leah Gunn had a question for Michael Ford – AATA’s CEO – about this and all possible amendments. Would any amendment by the county board require that all other three parties reconsider the articles of incorporation and four-party agreement? Yes, Ford replied. In that case, Gunn said she didn’t see any reason to change the language that had already been approved.

Barbara Bergman echoed Gunn’s comments. She asked when a millage might be put on the ballot for voter approval. AATA board chair Jesse Bernstein said there was no specific date targeted, although it appeared that they wouldn’t meet the timeline for a November 2012 ballot measure. [The deadline for certifying ballot language to the county clerk for a Nov. 6 ballot proposal is 70 days before the election – Aug. 28.] There are ongoing discussions with local districts, and he hoped the board would pass the agreement so that the project could move forward. The next step would be to nail down services and cost, so that when a millage is sought, people will know what they’re getting, he said.

Bergman noted that amending the documents would cause a delay in the process, and she didn’t support any of the amendments. She said she’d “work on squashing these amendments one by one.”

Yousef Rabhi asked Ford about the intent behind the phrase “shall be representative of public transportation interests as they exist in the County and other qualifications as detailed in the Bylaws of the Authority.” What do the bylaws say?

Ford replied that the bylaws haven’t been finalized. Sarah Pressprich Gryniewicz, AATA’s community outreach coordinator, noted that the intent in that phrase is to allow each appointing body to have the power to choose their representative, and not put constraints on those bodies. Rabhi said that was important, and he didn’t think the phrase should be deleted.

Conan Smith said he’d oppose the amendment, too. A two-thirds majority requirement is a pretty high bar for any local government unit, he said, but if that much support can be mustered to appoint someone younger or who lives outside Washtenaw County, then the appointing body should be able to do that. It’s their voice that should be represented, he said, not the county board’s.

Dan Smith agreed that the appointing body’s voice is important, but this is also an issue of overseeing taxpayer dollars, he said. The Act 196 authority board will have the ability to put a millage on the ballot. He told Rabhi that he hoped each appointing body would choose a representative with an interest in public transit, but that decision shouldn’t be a requirement. Smith also pointed out that they don’t yet know what the bylaws entail, nor do they know the process by which bylaws can be changed.

Alicia Ping supported the amendment, saying she represents nine communities that are not part of the four-party agreement. [Ping represents District 3, covering Saline and several townships in southwest Washtenaw.]

Bergman called the question, to end deliberations and force a vote. The vote on calling the question passed 10-1, with Wes Prater dissenting. A roll call vote was then taken on the amendment itself.

Outcome on amendment regarding board qualifications: It failed on a 5-6 vote, with support from Alicia Ping, Wes Prater, Rolland Sizemore Jr., Dan Smith, and Rob Turner.

Countywide Transit: Board Discussion – Amendments (Removal of Director)

The second amendment proposed by Dan Smith would eliminate the ability of the Act. 196 authority board to remove one of its directors. The intent of the amendment is to keep the power to remove directors in the hands of the local appointing entities.

SECTION 4.04: RESIGNATIONS, VACANCIES, AND REMOVALS
A director may resign at any time and such resignation shall become effective upon the Authority’s receipt of a written resignation notice, unless the notice specifies a later date. The Authority Board may, upon a 2/3rds vote of its other directors, remove a director prior to the expiration of that director’s term of office for persistent failure to perform the duties of that director’s office, gross misconduct in office, other reasons as specified in the bylaws, conviction of a felony involving extortion, or financial misconduct. A director may be removed from office with or without cause at any time by the same local body or process that appointed the director.

Wes Prater described it as a common-sense amendment. It makes sense that the Act 196 board shouldn’t be allowed to remove one of its own members.

Conan Smith observed that virtually every public body has an impeachment process – the county board of commissioners could remove any of its members, for example. When Dan Smith had originally proposed this amendment at the working session, it has received some support among other commissioners, so Conan Smith said he raised the issue with the committee that has helped develop these Act 196 documents. [Members of the committee are: Sabra Briere and Christopher Taylor (Ann Arbor city council); Paul Schreiber and Pete Murdock (Ypsilanti mayor/city council); Conan Smith and Alicia Ping (Washtenaw County board); Jesse Bernstein and Charles Griffith (AATA board); David Read and David Phillips (U196 board).]

The feeling was that the bar was sufficiently high in the current unamended item – with a two-thirds majority required to remove a director. One safeguard is that if the Act 196 board removes a director, the appointing entity can simply reappoint that person again, Conan Smith said. They can get into a pissing match, he said, and at some point the Act 196 board will see it’s in their best interest to simply keep the person on the board. But the common sense approach is to never vote to remove a director – that’s not how people usually do things, he said. People try to work things out without taking that step. The practical reality is it will never be a power that’s used, he concluded.

Barbara Bergman called the question. The vote on calling the question passed 10-1, with Dan Smith dissenting. A roll call vote was then taken on the amendment itself.

Outcome on amendment regarding director removal: It failed on a 3-8 vote, with support from Alicia Ping, Wes Prater and Dan Smith.

Countywide Transit: Board Discussion – Amendments (Termination of Agreement)

Dan Smith said this amendment is to ensure that all political entities are treated in the same way as Ann Arbor.

12. Termination of Agreement.
…
b. Discretionary Dissolution or Withdrawal Conditions. The Washtenaw County Board will also be allowed to dissolve the New TA if there is no Authority-wide voter approved funding passed before December 31, 2014, or voter approval passes Authority-wide but the same is defeated in the City of Ann Arbor any member political subdivision. The City of Ann Arbor may also withdraw from the new TA Agreement using any of the methods authorized by MCL 124.458. In the event the City of Ann Arbor exercises any of the foregoing rights, the City of Ann Arbor may immediately terminate this agreement upon written notice to the other parties.

Barbara Bergman characterized it as a “killer” amendment, which would paralyze the process. She was emphatically against it.

Ronnie Peterson said you either want to be married or you don’t. He didn’t understand why the county board needed to be involved – he trusted the leadership of other communities. Other than from some county commissioners, he hadn’t heard objections to the proposed documents from any other elected official. If the county had received correspondence objecting to the plan, he hadn’t seen it. He didn’t understand why they were spending so much time talking about it, and said they shouldn’t be micromanaging the AATA. If the board decides to amend these documents, it should be because of advocacy from the local communities, and he hadn’t seen that. Peterson said he was troubled by the attack on the AATA.

Wes Prater wondered why Ann Arbor is given a right that other political entities don’t have. It’s not treating everyone equally, he said, and in general the agreement is slanted toward Ann Arbor and Ypsilanti.

Conan Smith asked whether the four-party agreement or articles of incorporation restricted the county board from taking any actions it is in general empowered to take. Curtis Hedger, the county’s corporation counsel, said that generally, there were no such restrictions.

In that case, this amendment is moot, Smith said – the county board can dissolve the transit authority at any time. Hedger clarified that the articles of incorporation lay out how the transit authority can be dissolved, so action by the county board would be problematic, he said. “Problematic, but not illegal,” Smith replied.

Barbara Bergman called the question. The vote on calling the question passed 8-2, with dissent from Wes Prater and Dan Smith. Ronnie Peterson was out of the room.

Outcome on amendment regarding terminating the transit authority: It failed on a 4-7 vote, with support from Alicia Ping, Wes Prater, Rolland Sizemore Jr. and Dan Smith. 

Countywide Transit: Board Discussion – Amendments (Timeline, Papers of Record)

Dan Smith said the problem with this whole process is that local taxpayers aren’t being allowed to decide whether to participate. It’s the elected officials who are making decisions. The state’s Headlee Amendment was intended to put decisions about tax increases directly into the hands of voters, he said. If this countywide transit process allowed voters to weigh in on whether to join the authority, that would be fine. But it’s the governing bodies who make that decision. If the Northfield Township board doesn’t opt out, for example, and the overall millage passes, the township’s property owners would have to pay the tax – even if every single Northfield Township voter voted against the millage.

Smith noted that the reason many municipalities don’t show up to these county board meetings is because they’ve already opted out. Sarah Pressprich Gryniewicz, AATA’s community outreach coordinator, replied that AATA would honor those opt-out decisions [after the new authority is formed]. Smith said he wasn’t sure that would be legally sufficient, without further action by the governing bodies. But he added that his biggest problem is that voters can’t vote directly on whether to participate.

With that, he offered up an amendment to the county board’s resolution regarding the four-party agreement and articles of incorporation. [Because it was part of a county board resolution, not the documents themselves, the amendment would not need approval from the other three parties.]

BE IT FURTHER RESOLVED that the Board of Commissioners hereby adopts and authorizes the County Administrator to file the Articles of Incorporation within sixty (60) days creating a new transportation authority for Washtenaw County upon notification from AATA that the contingencies in the 4-party Public Transportation Agreement have been met.
…
1. AATA will publish details of the service and funding plan in newspaper(s) of general circulation in the Washtenaw County, including but not limited to AnnArbor.com, the Ann Arbor Chronicle, the Washtenaw Legal News, and the Heritage Newspapers serving portions of Washtenaw County, and the paper of record, if any, for each jurisdiction;
2. Letters of notice will be sent to each city, village and township elected official in the county at their address of record alerting them to the County’s intention to file the Articles of Incorporation on a date certain. Those letters shall indicate
a. Whether or not the jurisdiction represented by that official is included in the boundary of the New TA;
b. The process by which that jurisdiction may either withdraw from or join the New TA; and
c. The date on which the Articles of Incorporation will be filed and, if relevant, the date by which the New TA must receive official notice from the jurisdiction if that jurisdiction votes to opt-out of the New TA.

Gryniewicz said AATA would be happy to put notices in any publication. She said the amendment was otherwise also compatible with Act 196 legislation.

Conan Smith indicated that he fully supported this amendment. Leah Gunn said the main problem is that any amendment made by the county board will require action by the other three parties – Ann Arbor, Ypsilanti and AATA. It’s a foolish waste of time, she said, and she urged Dan Smith to withdraw the amendment.

Yousef Rabhi asked why the 60-day filing deadline was added. Dan Smith replied that the reason commissioners were voting down his amendments is because they wanted the process to move forward quickly. This will ensure that it does.

Michael Ford, CEO of the AATA, told the board that after the four-party agreement and articles of incorporation are approved, AATA will need to finalize its service plan and financial plan before the articles can be filed. He didn’t want to put a timeline on that process.

Rabhi offered an amendment to D. Smith’s amendment, striking the mention of a 60-day timeline. He also thanked Smith for his work in bringing these amendments forward, saying that Smith is a very thoughtful person and the discussion wasn’t personal.

Outcome on Rabhi’s amendment: It received no second, and died for lack of support.

In response to a question from Ronnie Peterson, Ford again stated that he preferred not to have the 60-day limit. Peterson said there should be flexibility, and that a 60-day deadline was a hassle. Peterson then asked about the other changes being proposed. Ford expressed some frustration, saying that after the June 14 working session he had followed up by meeting with representatives from the other three parties, and there had been no support for any of these proposed amendments. ”We went through this exercise,” Ford said.

Alicia Ping noted that she had made a big deal during the working session about the ability for communities to opt in at a later date. Gryniewicz said that information could be included in the letter of explanation about the process, which will be sent to municipalities.

Ping said she was sure the board would pass the agreement and articles of incorporation, but it was important to voice these concerns.

Rabhi questioned why the amendment removed the word “join.” That’s because when the articles of incorporation are filed, all municipalities will be part of it, D. Smith said – there’s no action required to “join.” The action that’s required relates to opting out.

Barbara Bergman called the question. The vote on calling the question passed 10-1, with dissent from Wes Prater.

Outcome on amendment to the board resolution: It failed on a 4-7 vote, with support from Wes Prater, Conan Smith, Dan Smith, and Rob Turner.

Countywide Transit: Board Discussion – Amendments (Amending Articles of Incorporation)

Dan Smith noted that this was another amendment that had been discussed at the June 14 working session. It limits the Act 196 board’s ability to amend its articles of incorporation.

Unless otherwise specifically allowed by law, these Articles of Incorporation may be amended only upon a two-thirds (2/3) vote of the directors appointed and serving on the Authority. All amendments must comply with applicable state and federal laws. All amendments to the Articles of Incorporation become effective only after they are executed jointly by the Chairperson and by the Secretary of the Board of the Authority, ratified by each member political subdivision and the Washtenaw County Board of Commissioners, filed with the recording officer of the Washtenaw County Clerk, and filed and published in the same manner as the original Articles of Incorporation.

Rob Turner supported this change. He was concerned that a coalition of just three districts – Ann Arbor, Ypsilanti and Ypsilanti Township – would have sufficient votes (10 out of 15) to make changes. Other municipalities would be joining the authority based on the articles of incorporation, but then those articles could be changed almost immediately by just a small subset of the communities involved.

Leah Gunn and Barbara Bergman both objected to the amendment, with Gunn again pointing out that any amendment would require approval from the other three parties in the four-party agreement.

Felicia Brabec wondered why the amendment required both the political subdivision and the county board to ratify changes. Dan Smith said he was trying to accommodate feedback he’d heard at the June 14 working session. He didn’t care which entities had to ratify it – he just didn’t want the Act 196 board itself to have that sole power.

Sarah Pressprich Gryniewicz said this was one of the amendments that had been discussed with the committee that has helped develop these Act 196 documents. The group felt strongly that the representatives appointed to the Act 196 board should be the ones who have the authority to change the articles of incorporation.

Conan Smith added that the committee had struggled with this issue. It doesn’t make sense for the county board to be the amending body for the articles of incorporation – there might be commissioners who represent districts in which no municipality is participating in the transit authority. It’s also burdensome if amendments to the articles of incorporation need to be ratified by each political subdivision, because unanimous approval would be difficult. This might be one of those things to take on faith, he said. There’s no incentive to make changes to the articles of incorporation that would deter entities from participating.

After some additional discussion, Brabec proposed an amendment to Dan Smith’s amendment [Brabec's addition in bold caps, deletion in strike-through]:

Unless otherwise specifically allowed by law, these Articles of Incorporation may be amended only upon a two-thirds (2/3) vote of the directors appointed and serving on the Authority. All amendments must comply with applicable state and federal laws. All amendments to the Articles of Incorporation become effective only after they are executed jointly by the Chairperson and by the Secretary of the Board of the Authority, ratified by each APPOINTING ENTITY  member political subdivision and the Washtenaw County Board of Commissioners, filed with the recording officer of the Washtenaw County Clerk, and filed and published in the same manner as the original Articles of Incorporation.

Gunn again raised concerns that any amendments would require reconsideration by the other three parties in the four-party agreement. Dan Smith pointed out that the AATA could have expanded service on its own, but because AATA wanted to be countywide, they needed to create this new authority. That’s what the county board now needs to sort through, to ensure that the organization that’s set up will function long after the commissioners around the table have moved on, he said. It’s cumbersome, he acknowledged, but they need to make sure it’s fair for all of the municipalities in the county.

Ronnie Peterson argued that other municipalities have been asking AATA for a seat at the governance table for a long time. Ann Arbor is willing to change how AATA operates to allow that to happen, he said.

There was then some discussion about the meaning of “appointing entity” – whether it meant each transit authority district, or each governing entity within those districts. It was never fully clarified.

Yousef Rabhi called the question on Brabec’s amendment. The vote on calling the question passed 10-1, with dissent from Wes Prater.

Outcome on Felicia Brabec’s amendment: It failed on a 5-6 vote, with support from Brabec, Wes Prater, Rolland Sizemore Jr.,  Dan Smith and Rob Turner.

There was no additional discussion on Dan Smith’s original amendment.

Outcome on amendment regarding how to amend the articles of incorporation: It failed on a 3-8 vote, with support from Alicia Ping, Wes Prater and Dan Smith.

Countywide Transit: Board Discussion – Final Comments

Rolland Sizemore Jr. told Michael Ford of the AATA that he didn’t like how the AATA had handled this entire process. There should have been more input from the board of commissioners all along, he said.

Barbara Bergman countered that she wanted to praise Ford for how he’s handled the process.

Dan Smith observed that even though a two-thirds vote has been considered a high bar for actions taken by the Act 196 authority board, in reality a two-thirds majority of seats is held by a potential coalition of just three communities – Ann Arbor, Ypsilanti and Ypsilanti Township, with a total of 10 votes on the 15-member board. [Ann Arbor will have 7 seats, Ypsilanti will have one, and the Southeast District (Ypsilanti and Augusta townships) will have two.] It’s understandable that weight is given to Ann Arbor because of the assets that Ann Arbor is contributing, he said. But the structure also diminishes the voices of other communities. The governance of the Act 196 authority is still a problem for him.

Yousef Rabhi said that as an advocate for Ann Arbor, he supports having Ann Arbor represented at the table in a way that’s commensurate with its assets and population. [Rabhi is one of four commissioners whose districts cover portions of Ann Arbor.] He thinks the Act 196 board composition is well-weighted.

Ann Arbor has been paying 2 mills since the mid-1970s, Leah Gunn said, and is going to transfer $200 million worth of assets to the new authority. She said she’d think other communities would be saying “Thank you, Ann Arbor.”

Wes Prater noted that those assets have been used primarily to provide service in Ann Arbor. The city’s residents, not the out-county residents, have enjoyed the fruits of AATA, he said. Even the expanded service will focus primarily on urban areas, he said. Prater predicted that 12-14 communities will opt out of the transit authority, as they learn more about the services and costs. And some communities who stay in will end up with less service than they expected, he said, and they’ll be unhappy.

Sizemore reiterated his comment that he didn’t want to hear local elected officials whine. “Well, they will,” Prater replied. “I know they will,” Sizemore said.

Alicia Ping said she planned to vote against the agreement because none of the amendments were adopted, and she was representing the nine municipalities in her district who were unlikely to participate initially. However, she said she thought it would be good to have a broader transit authority in place so that communities could join later, if they wanted.

Outcome: On a 7-4 vote, the board gave initial approval to a four-party agreement and articles of incorporation, without amendments. Dissenting were the board’s three Republican commissioners – Alicia Ping, Dan Smith and Rob Turner – as well as Democrat Wes Prater. The board also set an Aug. 1 public hearing to gather feedback on the agreement. A final vote is expected to take place at that Aug. 1 meeting.

Head Start Extension

Following up on previous discussions about the future of Washtenaw Head Start, the county board was asked to approve changes to the program from Aug. 1, 2012 through July 31, 2013 – an interim period during which the county will continue to manage Head Start before handing it over to another administrative entity. The action was part of authorizing a federal grant application for the program.

Separately, the board was asked to pass a resolution supporting the selection of the Washtenaw Intermediate School District as the next local Head Start administrator. The selection will be made by federal Head Start officials.

The local Head Start program provides pre-school services to 561 children, ages 3-5, and their families – both directly, and through delegating to other providers, including local school systems. The majority of the program would be funded with a $4.028 million federal grant in the coming year, out of a total budget of $4.55 million. The interim plan calls for eliminating 7.8 full-time jobs, and leaving another three jobs vacant. Because of vacancies and retirements, only three employees will be affected, according to a staff memo. The changes will result in one teacher and one teaching assistant per room – previously, there were two teaching assistants and one teacher per room.

These changes had been forecast at the board’s May 2, 2012 meeting. County administrator Verna McDaniel had told commissioners that the county had agreed to a one-year extension to continue administering the program, through July 31, 2013. As part of the budget process last year, the county board had voted to relinquish its 46-year administration of the program on July 31, 2012. But the process to find another entity to administer Head Start has taken longer than expected, so the county reached an agreement with federal officials to operate the program another year.

In May, McDaniel reported that the agreement waives a 20% local match of about $750,000 that the county had previously been required to provide. She had noted that there would be staff changes proposed as a result of the new interim agreement. At the time, several commissioners praised the decision for easing the eventual transition to a new Head Start administrator, but Ronnie Peterson had expressed concern that the program’s high standards would be compromised.

Head Start Extension: Board Discussion

Ronnie Peterson noted that he had previously asked for outside consultants to come in and evaluate the Head Start program, in light of changes that are being proposed. He had hoped that those assessments would be done, but it appeared that they hadn’t. It would have helped the board make decisions based on the welfare of children, not just on cost, he said. Peterson added he was sure that experts from Eastern Michigan University, the University of Michigan or other institutions could be found to offer their services without charge.

Peterson spoke at length about the importance of the Head Start program, and of keeping the high standards that the county had previously met. He opposed reductions of teaching staff, and said he’d vote against them. The county has a healthy cash flow, he said. They are able to find money for other programs, so they should be able to find money for Head Start.

Board chair Conan Smith responded to Peterson, saying that although he wasn’t an expert on early childhood education, he could address the budgetary questions. Smith said the expectation is that the county won’t be able to deliver the same level of service in the coming year – there’s no question about that. As the board went through the budget process last year, for financial reasons they decided to move out of the business of early childhood education, he said. But they also made the decision because they recognized that the county isn’t an expert in that area – there are others in the public and private sector who can do a better job.

Smith noted that the current situation came up because there were some stumbling blocks that arose during the transition to another administrator. He appreciated that the county could continue to guide the program for another year – if not, it would have been administered by a third party on an interim basis. As a community member who cares about the population served by Head Start, Smith said he’s grateful that the county can provide resources for another year. It’s not the same program – it was a financial decision, not a programmatic one – but it ensures that local influence is maintained as a stop-gap measure. So the local Head Start team was asked to identify changes that would have a minimal negative impact on children during this period, Smith said.

Peterson replied that Smith’s answer was a good one for the media, but it was the board of commissioners that had decided to let go of Head Start in the first place. There had been no discussion with the Head Start policy council, or parents, or the staff, he said. Peterson didn’t buy the idea that the county was “rescuing” Head Start for this interim year, given that the county had created the situation. He said it was a disgrace for him to be on the board, and he would fight to bring back Head Start. He certainly wouldn’t vote in favor of the proposed cuts.

Felicia Brabec wanted to know who was involved in making the decisions about which jobs to eliminate. County administrator Verna McDaniel said her staff as well as human resources staff had worked with the program’s interim director, Cassandra Sheriff. McDaniel pointed out that federal requirements call for only one teacher per classroom. The county’s previous practice of having one teacher and two teaching assistants had been above those standards. The bulk of positions being eliminated are teacher aides.

Sheriff came to the podium and Brabec asked how she felt about the changes. Peterson objected, saying that Sheriff was being put in the middle of this debate. Sheriff replied that there had been many discussions with parents, the Head Start policy council and staff about these transitions. It’s always better to have more teachers, she said, but these changes seemed inevitable, given the situation. “Floating” teaching positions have been created to help in the classrooms – that hadn’t been necessary when there were three people per class, she said. With retirements and vacancies, most of the staff had been moved to other jobs within Head Start, she noted, and they were unable to find a position only for one part-time janitor.

Sheriff also said that services hadn’t been compromised, and the organization was still thriving.

Leah Gunn pointed out that Sheriff was, in fact, an expert in early childhood education. She thanked Sheriff for what has been a tough year, and said that Sheriff had done an extraordinary job.

At this point, Peterson indicated that he had been willing to end the debate, but that other commissioners had opened the door for further discussion. He asked Sheriff at what point had teaching staff been reduced. There was a back-and-forth exchange and some confusion – Sheriff seemed to initially think Peterson was asking when the decision to reduce staff had been made, and that happened in April or May, she said. Peterson interpreted that to mean that staff reductions had actually occurred in May, and he wondered why the board hadn’t been informed. Sheriff and McDaniel both clarified that the changes wouldn’t be made until the 2012-2013 school year, which begins in the fall.

In that case, Peterson said, Sheriff didn’t yet know what the impact would be on the children. Wes Prater objected, saying that Peterson was badgering Sheriff. Peterson replied that other commissioners had brought her to the podium and opened up the topic. She was an interim administrator and had only held that job for a few months, he noted. She was not a professional evaluator, he said, and he had asked earlier this year that a professional evaluation be conducted of potential changes to the Head Start program.

Prater asked whether the full board had approved Peterson’s request for an independent evaluation of Head Start. Peterson noted that no one had objected when he asked for it – he accused Prater of being rude, and asked him to be respectful. Peterson said the person who designed the staff reductions shouldn’t be the one to assess and evaluate it.

Rolland Sizemore Jr., who was chairing the meeting, told commissioners that they needed to pass this resolution in order to apply for the federal grant money to run the program in the coming year. But he said the administration would respond to Peterson. ”I assure you we’ll get answers for you very soon,” Sizemore said. Yousef Rabhi, who chairs the board’s working session, agreed to put the topic on the agenda for the Aug. 2 working session.

Barbara Bergman noted that the program will continue to meet federal standards, and that it was a positive thing to be turning over the Head Start program to educators. Sheriff is doing a terrific job, Bergman said. She took umbrage at being accused of not caring about the children.

Prater observed that every decision about Head Start has been approved by the board. It’s the board that makes these decisions, not one or two commissioners, he said. That’s the way things work.

Leah Gunn wondered whether an assessment was necessary at this point. The changes won’t take effect until the fall, so what’s the point in evaluating it now? Wait until it’s underway, she advised. Gunn also pointed out that Head Start programs are evaluated by federal officials all the time.

Conan Smith offered Peterson a compromise, suggested that Peterson vote in favor of the program’s federal grant application but against the staff reductions. He said it’s important to have Peterson’s voice in support of the federal funding. He noted that the reduction equates to about 1% of the Head Start budget, and he didn’t think the impact would be great enough to warrant an evaluation.

Peterson replied that he wouldn’t support a reduction in staffing. He noted that commissioners have spent months discussing how to handle animal control services, and no one has complained. [For recent coverage on that topic, see "Work Continues on Animal Control Policy."] Yet when he wants to talk about children in poverty, “I get nothing but pushback,” Peterson said, adding that he felt sickened to see that attitude among his “progressive friends” on the board.

Gunn said she took it very personally that Peterson assumed other commissioners didn’t care about or advocate for children. She noted that the board had created a children’s well-being fund before Peterson was elected. She pointed out that she had served as the board’s representative on the Head Start policy council when Peterson was an alternative on the council, and he had attended only one meeting. His accusations are “very personal and very insulting,” she said.

Peterson replied that rather than go to meetings, he goes to the Head Start classrooms. He noted that something the board did in 1998 – when the children’s well-being fund was created – didn’t reflect the situation in 2012. A commissioner’s vote now indicated how they felt about children in poverty, he said.

Rob Turner, a former Chelsea school board member, said he’d been impressed when Conan Smith had asked him for guidance on ways that the county can address disparities in graduation rates. [That suggestion occurred during final budget deliberations at the board's Dec. 7, 2011 meeting.] Turner then read excerpts from a recent report in the Chelsea Standard, which provided data on local school performance on the Michigan Merit Exam and ACT (American College Testing) – two measures of “college readiness.” Among the data he cited, the percentage of students deemed “college ready” ranged from 47.3% in Saline and 43.2% in Ann Arbor to a low of zero percent in the Willow Run school system.

Turner noted that his niece teaches in the Willow Run system, and has to teach basic things like how to be polite. The home situations are different in different parts of the county, he said, and these issues need to be addressed. He called on Smith to form a commission with educators and others from across the county, to tackle these educational challenges, especially in the county’s most impoverished communities.

Outcome: Commissioners voted to approve the application for federal Head Start funding. Ronnie Peterson voted against the reduction in staff that was part of the program’s annual plan.

Head Start: Support for WISD

A separate resolution on the agenda supported the selection of the Washtenaw Intermediate School District (WISD) as the next local Head Start administrator, beginning in the 2013-2014 academic year. The selection will be made by federal Head Start officials.

Dan Smith said he thought the resolution was appropriate, given that the county had administered the program for 47 years.

Outcome: The resolution of support for WISD passed unanimously.

Change to Accommodations Ordinance

The county collects a 5% excise tax from hotels, motels, bed & breakfasts and other small accommodations businesses, which is then distributed to the Ann Arbor and Ypsilanti convention & visitors bureaus and used to promote tourism and convention business. Collection and enforcement is handled by the county treasurer’s office, and has been stepped up over the past two years. A move to exempt bed & breakfasts and cottages from the tax was on the board’s July 11 agenda for initial approval.

In addition to exempting cottages and bed & breakfasts with less than 14 rooms, the change would also exempt individuals who occasionally lease out rooms. These types of establishments account for less than 1% of the total tax collected in Washtenaw County, according to a staff memo accompanying the resolution.

According to the county treasurer’s report to the Washtenaw County accommodation ordinance commission, in 2011 the county collected $3.99 million in accommodation taxes. The money is primarily distributed to the county’s two convention & visitors bureaus (CVBs) based on a 75/25 percentage split – in Ann Arbor ($2.69 million in 2011) and Ypsilanti ($898,563). The county treasurer retains 10% of the tax to cover collection and enforcement expenses.

The accommodation ordinance commission (AOC) recommended approval of the ordinance change at its June 5 meeting. A staff memo states that the AOC had recently reviewed enforcement and administrative costs, and did not believe it was cost effective to enforce the ordinance with these smaller establishments. The staff memo also states that the local CVBs support this change, in part because the CVBs do not actively market these establishments.

The leaders of both local CVBs – Mary Kerr of Ann Arbor and Debbie Debbie Locke-Daniel of Ypsilanti – attended the July 11 meeting but did not formally address the board. The county treasurer, Catherine McClary, did not attend the meeting.

By way of background, the county board has made periodic changes related to the accommodations tax over the past several years. In December 2008, the board voted to increase the accommodations tax that it collects from 2% to 5%, a change that took effect in March of 2009.

The county keeps a portion of those tax revenues to pay for the cost of collection and enforcement. Until November 2009,  the county kept 5% of accommodations tax revenues for that purpose. But in November 2009, the board approved a five-year agreement with the CVBs, from 2010 through 2014, that increased the county’s share of the accommodation tax revenues from 5% to 10%.

At the board’s Sept. 21, 2011 meeting, commissioners amended the county’s contract with the CVBs to address the process for distributing excess funds that might accumulate from the county’s 10%, if that amount exceeds the expenses required to administer and enforce compliance with the tax. Beginning in May 2013, the county will continue to retain 10% of the tax proceeds, plus 10% of any remaining fund balance. If additional funds accumulate in the fund balance, they are to be returned proportionally to the two convention & visitors bureaus – 75% to Ann Arbor, and 25% to Ypsilanti.

In February 2012, the county drew on those excess administrative funds, voting to allocate $200,000 to help fund a Pure Michigan campaign focused on the Ann Arbor area. At the time, more than $350,000 had accumulated in the administrative fund from the county’s share of the accommodation tax revenues.

Accommodations Ordinance: Public Commentary

Bill Nickels, chair of the Washtenaw County accommodation ordinance commission, told the board that the AOC voted to support the proposed exemption. Of the $17 million collected over the past four years, he noted, only about $126,000 came from bed & breakfasts. He indicated that it’s not an amount that’s worth spending the county staff time and expense to collect. Nickels also reported that recently, the county treasurer – Catherine McClary – decided to expand the definition of accommodations to include private homes that lease out rooms on special occasions. That would affect about 40 homes, he said, and would increase the expense of audits and enforcement. All of this led to the AOC’s conclusion that including these types of small establishments in the accommodations ordinance is not cost effective, Nickels said.

Joan Knoertzer, proprietor of the Library Bed & Breakfast in Ann Arbor, told commissioners that she spoke for herself and many other owners of bed & breakfasts. She’s been in business 12 years, and the last time the county board was voting on a change to the accommodations ordinance, she had found out about it about a half hour before the meeting by reading it in the newspaper. This time, she’d been notified directly – she thanked the county for that. Owners are very happy about the proposed exemption, she said. The audits by the county treasurer’s staff went from being done quarterly to monthly, and are very intrusive and time-consuming. She said the owners hadn’t realized that the previous ordinance change would result in more audits like this. These small business owners support Ann Arbor from the bottom of their hearts, she said, and serve as ambassadors and concierges for the city. She strongly urged that the board approve this exemption.

Pat Materka of the Ann Arbor Bed & Breakfast said she wanted to reinforce what Knoertzer had reported. Revenues from the accommodations tax has been great for promoting larger hotels, she said, but the impact on smaller businesses has been negligible. The collaborative, positive relationship that they have with the Ann Arbor convention & visitors bureau has been interfered with by the county treasurer’s policy of auditing – it’s been intrusive, abusive and unnecessarily contentious, she said. It would complicate things even more to start harassing private homeowners who rent out rooms – it doesn’t make sense, Materka said. All bed & breakfast owners gratefully support the ordinance change, she added. She hoped the county board would let owners do what they love – offer hospitality.

Accommodations Ordinance: Board Discussion

There was no discussion among commissioners on this resolution.

Outcome: Commissioners unanimously gave initial approval to the proposed ordinance change. In a separate vote, they set a public hearing for Aug. 1 to seek input on the revision. A final vote is expected at the board’s Aug. 1 meeting.

Contract with Sylvan Township

Commissioners were asked to authorize a contract with Sylvan Township related to debt repayment on water and sewer bonds. It’s another attempt to establish an arrangement under which Sylvan Township will repay the county for covering bond payments – contingent on Sylvan Township voters approving a millage.

In May of 2012, the county had picked up a $175,000 interest payment that the township couldn’t afford to make, related to $12.5 million in bonds that were issued 11 years ago – and backed by the county’s full faith and credit – to build a water and wastewater treatment plant in the township. The treatment plant in Sylvan Township was intended for future development. Under a previous contract with the county, the township was obligated to make the bond payments. [.pdf of June 20, 2001 county board resolution authorizing the bonds]

The project has a long and contentious history, including litigation and changes in ownership. In very broad strokes, the development that was expected to support the bond payments never materialized and the township has been struggling to make payments.

A staff memo accompanying the July 11 resolution describes some of the background leading up to the current situation:

The two companies who were to build the new housing to be served by the projects were Magellan and Hamill. In June, 2003, the County discovered that the developers failed to pay the first installment on the special assessment for the projects and that the Township had entered into development agreements with the developers which credited future connection fees to the developers rather than to the bond debt service. Magellan ultimately agreed to an amended development agreement removing the credit of future connection fees and reducing the assessment on Magellan property from $4.6 million to $3.2 million dollars. Hamill refused to execute a similar amended agreement and eventually sold its interest in the development property to Norfolk Development Corporation (which also purchased part, but not all of the development properties from Magellan).

In 2007 and 2008, the special assessments on the development properties went delinquent. The County Treasurer advanced funds to the Township to cover this delinquency. Currently, the Township owes the County Treasurer $1,169,616.62 which includes interest for these unpaid advanced special assessments.

In August, 2007, Magellan and Norfolk sued the Township in Washtenaw County Circuit Court claiming that the special assessments for the project were illegal under a number of theories. The suit was heard by the Circuit Court, Court of Appeals and ultimately remanded back to the Circuit Court. As a result of the litigation, the sewer special assessment was nullified, and certain past water special assessments were nullified with future water payments being upheld.

Township officials put a millage proposal on the November 2011 ballot to levy a 4.75 mill, 20-year tax that would fund the bond payments. But Sylvan Township residents rejected the millage by a vote of 475 to 328. As soon as the millage failed, it became clear that Sylvan Township – located west of Ann Arbor, near Chelsea – would not be able to make its payment in May of 2012. Because the county had backed the bonds with its full faith and credit, it is ultimately responsible for making the payments, even if it isn’t reimbursed for those payments by the township.  The county has an interest in making the bond payments to avoid having its AA+ bond rating negatively affected.

Even if the November 2011 millage had passed, proceeds alone would not have been sufficient to cover the entire cost of the bond payments, however – forcing the county to tap its capital reserves as well. The millage proceeds were also intended to repay the county to cover any amount used from the county’s capital reserves, as well as interest. The proceeds would also have been used to repay the county treasurer’s office, which advanced about $1.2 million to the township in 2007 and 2008 related to this project.

At their Oct. 19, 2011 meeting, county commissioners gave final approval to a contract with Sylvan Township related to the township’s bond repayment schedule. However, the contract was contingent on voters passing the 4.75 mill tax, so the contract was nullified in the wake of the November 2011 vote. A staff memo accompanying the October 2011 contract resolution indicated that if the millage failed, the county could file suit against the township for breach of contract in failing to meet its debt repayment obligation. Such legal action could result in a court-ordered assessment on township residents. According to a staff memo for the July 11 resolution, the county is still pursuing “legal remedies” to the situation, but hopes to find other ways to resolve the issue.

Currently $9.7 million in principal is owed, plus interest – another $175,000 interest payment in November and two interest payments totaling $350,000 in 2013.  Factoring in the $1.2 million that was advanced by the county treasurer to the township in 2007 and 2008, a total of $11.425 million is owed to the county.

The contract brought to the board on July 11 is nearly identical to the one it approved in October of 2011. It’s contingent on township voters approving a 4.4 mill tax for 20 years that will be on the Aug. 7 ballot. The county will use its capital reserves to make the bond debt payments, and the township will repay the county with proceeds from the millage. The township’s repayments will continue for seven years past the debt repayment schedule, to cover interest as well as the repayment of $1.2 million advanced by the county treasurer.

Sylvan Township Contract: Public Commentary

Kurt Koseck told commissioners that he’d spoken to them previously [at the board's Nov. 16, 2011 meeting]. He had watched their May 2, 2012 meeting and been impressed with the communications there. Up until this point, a lack of accountability on this issue had motivated him to become involved, to run for office and to attend these board meetings. [Koseck, a Republican, is among the four candidates running for two spots on the Sylvan Township board of trustees in the Aug. 7 election.]

Koseck said he’s been amazed by the lack of communication between the Sylvan Township board and the county board. He noted that at the county board’s May 2 meeting, board chair Conan Smith had said that the county is a partner with Sylvan Township. Koseck thanked Smith for acknowledging that the county had some culpability in this situation.

The county hasn’t been accountable, he said, but it clearly had been involved in the project. Koseck noted that consultants for the project were hired by the county but paid for by the township. It had been a $12.5 million project – and prior to that, the largest project that the township had undertaken was to build the township hall, for about $700,000. So the county was clearly the superior partner in this arrangement, he said.

Koseck also asked whether the county followed its full faith and credit policy in 2001, when it backed the Sylvan Township bonds. He wondered whether the policy had been re-examined since then, to make sure the situation can’t happen again.

Another Sylvan Township resident, Tim Kelley, told commissioners that he has reviewed a lot of the history related to this situation. The voters were never asked to approve this project, yet it was financed and built, he said. Now, property owners are being asked to pay for it. The resolution and contract being considered now by the county board doesn’t include property owners, he noted. The only way that the voters have a voice is in the millage vote. If the millage is approved, Kelley asked the board to keep an open mind about broadening the tax base for this debt service to the fullest extent possible. Until 2004, there were additional property owners in Sylvan Township – but now those properties have been annexed into the city of Chelsea. He said those property owners should also pay, and “enjoy the fruits of this fiasco.”

Sylvan Township Contract: Board Discussion

Yousef Rabhi noted that the county has already spent a lot of money on this project, and he wanted assurance that this contract would secure funds for all the money the county was owed now and into the future. Absolutely, replied county administrator Verna McDaniel. Over the 20-year period, all of the bond payments and interest will be covered.

Rob Turner added that the county will also be repaid for the taxes that are owed, plus interest on that amount.

Rabhi thanked Turner for his time and energy in resolving this situation, and said he hoped that the millage would be passed. It would be a better alternative than ”the other mess we could get into,” he said – an allusion to legal action against the township.

Turner said there are people in the township who would disagree with Rabhi, and who think that Turner is the enemy because he wasn’t a stronger advocate in saying that the county is culpable and should pay. He said he’s had people tell him that the county should help out Sylvan Township in this situation just like the county helped the Dexter area after the tornado touchdown in March. Assuming the millage is approved, Turner said this contract will smooth out the repayment and make things less painful for taxpayers. If property values go up, or if future development occurs in the township, the millage revenues will repay the county even faster.

There are only about 100 hookups to the water and wastewater treatment plant, but the rest of the township’s property owners will be paying for it – even though they don’t benefit from it, Turner said. It’s a hurtful situation for people, and a bitter pill to swallow. It will be a difficult millage vote, but Turner has heard people say they’ll support the millage because it’s better than the alternative. If a court ends up assessing property owners, it could be a lot higher than a 4.4 mill tax, he noted.

Felicia Brabec said she had been interested in Turner’s view of the likelihood that the millage would pass, and he’d provided some insight. Maybe the tide is turning, she said. Brabec also wondered what the impact will be on the county’s capital reserves. Are there projects that can’t be funded, because money is being used for the Sylvan Township bond payments?

McDaniel replied that the county has the capacity to make the Sylvan Township bond payments, and to cover its other bond obligations as well. [She did not provide details about the balance at the July 11 meeting, but had previously told The Chronicle in May 2012 that the capital reserve fund's available balance stood at about $4.7 million.]

Outcome: Commissioners voted to authorize the contract with Sylvan Township.

Workforce Development Funding

On the July 11 agenda were several items related to funding for workforce development programs, administered by the county’s office of community and economic development.

The board was asked to approve an annual employment services plan for programs provided at the Michigan Works! Career Transition Center in Ypsilanti. [.pdf of employment services plan] The plan is required in order to receive federal funding, allocated by the state’s Workforce Development Agency. This year, the county will receive $470,755 for the period from July 1, 2012 through June 30, 2013.

Also on the agenda was the county’s application for $2,548,864 in funding for federal Workforce Investment Act (WIA) programs for adults, dislocated workers, and youth from July 1, 2012 through June 30, 2013. That’s a decrease from $2,995,151 awarded in the previous fiscal year.

The county board also was asked to authorize the receipt of an additional $350,000 from the federal Workforce Investment Act (WIA) Dislocated Worker program – funds that were unspent by other entities from a fiscal 2010 federal program, and that are being reallocated. For a similar reason, additional federal funding was also available from the American Recovery and Reinvestment Act Regional Economic Impact Workforce Investment Act National Emergency Grant. The county will receive $258,919 more than originally budgeted to provide employment services for displaced workers.

Outcome: Without discussion, commissioners unanimously approved all workforce development agenda items.

Community Corrections

The annual plan and application for funding of Washtenaw County’s community corrections program was on the agenda for approval at the July 11 meeting. The plan covers the period from Oct. 1, 2012 through Sept. 30, 2013 with a $1,037,788 budget.

Community corrections is operated by the sheriff’s office and includes a variety of programs. Goals include: (1) reducing prison sentences for eligible offenders; (2) reducing jail crowding so that priority for jail beds will be reserved for dangerous offenders; and (3) reducing recidivism by providing credible alternatives to incarceration. Services range from pre-trial intervention to jail-based programs and treatment initiatives for probationers and parolees.

Of the $1.037 million budget, $430,719 is expected to be funded by the Michigan Dept. of Corrections, with an additional $260,890 estimated to come from fee revenue, $240,983 from the county general fund, and $105,196 from the community corrections fund balance. Because people who participate in these programs would otherwise likely be in the county jail, the sheriff’s office estimates that community corrections saved the county $4.756 million in 2011 by eliminating the need for 55,953 jail bed days at $85 per day.

Community Corrections: Board Discussion

Yousef Rabhi asked whether the funding in the plan had already been factored into the current budget. County administrator Verna McDaniel indicted that it had been.

Barbara Bergman, who has served on the community corrections advisory board, thanked the program’s director, Renee Wilson, for her work. Wilson has been running the program with diminishing resources from the state, she said, but Bergman didn’t know how much longer that could be done. Keeping people out of jail is a tremendous service, Bergman said, and it’s unfair for the state to keep asking the county to do more while not providing adequate resources.

Outcome: Commissioners approved the annual plan and application for funding for the community corrections program.

Water Resources Projects

The board was asked to approve backing the bonds for four projects proposed by the county’s office of the water resources commissioner, including three in Ann Arbor.

The three Ann Arbor projects are: (1) stabilizing Traver Creek as it runs through the Leslie Park Golf Course, costing up to $1.805 million; (2) providing stormwater retention and infiltration from the road surface using porous asphalt on Willard Street, in the Allen Creek drain district and costing up to $345,000; and (3) providing bio-retention and stormwater capture via reforestation as part of a Huron River “green infrastructure” project, costing up to $345,000.

The Ann Arbor projects require the county to give its full faith and credit, although the payment of bonds will be funded through special assessments in districts tied to each project. The most high-profile of these project will involve work at the Leslie Park Golf Course. Most recently, the city’s park advisory commission was briefed on this project at its June 19, 2012 meeting.

The fourth project backed by the county is for a five-year North Lake improvement project in Dexter and Lyndon townships. Costing up to $305,000, it would include controlling invasive and nuisance species, such as the Eurasian water milfoil, and maintaining a lake level control structure. The bond payments would be made with revenues from a special assessment of the district benefiting from the lake improvements.

Water Resources Projects: Board Discussion

Rolland Sizemore Jr. teased Janis Bobrin, the water resources commissioner, asking her if she was just trying to get a lot done before she left office. [Bobrin, a Democrat who has served in that elected position for more than 20 years, is not seeking re-election this year. Two Democrats – Harry Bentz and Evan Pratt – are competing for the position in the Aug. 7 Democratic primary, with the winner facing Republican Eric Scheie in November.]

Yousef Rabhi asked what kind of restoration was being planned with the Huron River green infrastructure project. Bobrin replied that the city of Ann Arbor will be implementing the project, planting trees in the right-of-ways and other city-owned areas.

Outcome: Commissioners unanimously authorized bonding for all four water resources projects.

618 S. Main Brownfield Plan

The board was asked to set a hearing for Aug. 1, 2012 to get public input on a brownfield financing plan for a residential development at 618 S. Main St. in Ann Arbor.

The apartment complex – located at the site of the former Fox Tent and Awning, north of Mosley between Main and Ashley – is being put forward by Dan Ketelaar’s Urban Group Development Co., and will be marketed to young professionals. The 7-story building would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles.

Previously approved by the Ann Arbor city council on June 18, the project’s brownfield tax increment finance (TIF) plan works in conjunction with a $650,000 TIF grant (paid over a period of four years) awarded by the Ann Arbor Downtown Development Authority board at its June 6, 2012. Both the brownfield TIF and the DDA TIF work in a similar way. The developer must build the project and pay the new taxes on the project, then receive reimbursement for eligible expenses. The brownfield plan includes developer reimbursements of $3.7 million over 21 years.

Work covered by the brownfield plan includes: site investigations for characterization of soils and dewatering if water is encountered during excavation; disposal of soils; demolition of buildings and removal of existing site improvements; lead and asbestos abatement; infrastructure improvements like water, storm sewer and sanitary sewer upgrades, street repair and improvements to streets; and site preparation like staking, geotechnical engineering, clearing and grubbing.

For additional background on the project, see Chronicle coverage: “618 S. Main Project Gets Planning Support” and “Ann Arbor City Council OKs 618 S. Main.”

618 S. Main Brownfield Plan: Public Commentary

Jim Mogensen told commissioners that this is the time of year when public bodies sometimes put through controversial items that have been put aside, but that reemerge in the summer like cicadas – when many people are out of town. He said he was happy to see that’s not the case for the county board.

He wanted to talk about brownfields, and noted that there was a lot of activity in Ann Arbor. There’s a danger of mission creep, Mogensen said. The brownfield designation started out as a way to deal with contaminated sites, but now includes other categories as well. It’s important to ask what the public benefit is from making a brownfield designation. By the time the county holds a public hearing, the likelihood of a brownfield plan being turned down is unlikely, he said. Mogensen said he wasn’t asking that the board turn down this particular proposal, but he did ask that they act as an oversight body, and not overlook their responsibility. It’s important not to expend public money to finance projects if the projects could not otherwise get financing, he said.

Outcome: Without discussion, commissioners voted to set a public hearing for the 618 S. Main project at their Aug. 1, 2012 meeting.

Appointments

The board was asked to make two appointments to the county’s local emergency planning committee: Stephen D. Field and Martin Donaldson, for terms ending Dec. 31, 2014.

Board chair Conan Smith noted that it’s difficult to recruit people to this committee, and he was grateful that they found two people who would serve.

Outcome: Commissioners unanimously approved appointments to the  local emergency planning committee.

Present: Barbara Bergman, Felicia Brabec, Leah Gunn, Alicia Ping, Ronnie Peterson, Wes Prater, Yousef Rabhi, Rolland Sizemore Jr., Conan Smith, Dan Smith, Rob Turner.

Next regular board meeting: Wednesday, Aug. 1, 2012 at 6:30 p.m. at the county administration building, 220 N. Main St. in Ann Arbor. 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 commentary is held at the beginning of each meeting, and no advance sign-up is required.

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