County Board Grapples with Court Budget

Unexpected proposal gives option to eliminate lump-sum approach to court system budget; commissioners also discuss potential bonding

Washtenaw County board of commissioners meeting (June 5, 2013): In a move that appeared to surprise many commissioners and staff, Washtenaw County commissioner Alicia Ping formally proposed giving notice to eliminate a lump-sum budgeting approach for the county’s court system.

Yousef Rabhi, Alicia Ping, Washtenaw County board of commissioners, The Ann Arbor Chronicle

Board chair Yousef Rabhi and vice chair Alicia Ping. (Photos by the writer.)

After a lengthy and often heated debate, the board voted 5-4 to give initial approval to the notice, but postponed final action until July 10. Voting in favor of initial approval were Ping, Conan Smith, Dan Smith, Andy LaBarre and Kent Martinez-Kratz. Voting against the proposal were Yousef Rabhi, Ronnie Peterson, Rolland Sizemore Jr. and Felicia Brabec.

Ping noted that her goal isn’t necessarily to cut funding for the courts, but rather to be more transparent about where the money goes. The board could ultimately decide to leave the lump-sum approach in place. Giving a notice to terminate the agreement simply gives the board the option to end it.

Conan Smith, who has wrangled with court officials in the past on this issue, argued that the legislative branch is responsible for budgeting, and the board has abrogated that responsibility by agreeing to lump-sum funding. The board gives up far too much authority over line-item expenditures in exchange for “peace in the valley,” he said. “I want to see something different.” With a line-item approach, the county board could indicate priorities for the courts by allocating more funds to specific areas. Dan Smith also argued in favor of the action, noting that the courts are funded with essentially no oversight.

No court officials attended the June 5 meeting. The proposal had not been on the published agenda.

Ronnie Peterson argued most strongly against Ping’s proposal, fearing it would damage the board’s relationship with the courts. Peterson also felt the board itself hadn’t been very accountable regarding a $345 million bond proposal it’s considering. “So as we blast others, let’s prepare to take a few pellets ourselves,” he said. Rolland Sizemore Jr. warned that the board might be starting a fire that they couldn’t put out. He noted that if court officials decide to sue, the county would be required to pay the attorney fees.

Commissioners initially were set to take a final vote at the board meeting that same night – held immediately after the ways & means committee meeting. However, after a break between the two meetings, corporation counsel Curtis Hedger reported that the memorandum of understanding with the courts actually requires a 12-month notice, not the six months that had been discussed. This turned the opinion of some commissioners, who wanted to take more time to study the issue. Andy LaBarre, who chairs the board’s working session, offered to schedule the topic for a working session as soon as possible.

The motion to postpone final action passed on a 6-3 vote, with dissent from Alicia Ping, Dan Smith and Kent Martinez-Kratz. So the proposal will appear on the board’s July 10 agenda.

That July 10 meeting will also include action related to the county’s major bonding initiative to cover unfunded pension and retiree healthcare obligations, including a public hearing. The first public hearing for the potential $345 million bond proposal was held on June 5. It drew four people who all expressed caution about the possible action, with some suggesting a millage or additional budget cuts to cover the retiree obligations instead of bonding.

On June 5, commissioners also set other public hearings for July 10: (1) for two brownfield redevelopment projects in Ann Arbor – at Packard Square (the former Georgetown Mall), and 544 Detroit St.; and (2) for the annexation of industrial property from Scio Township into the village of Dexter. And the July 10 meeting will include final consideration of a strategic space plan for Washtenaw County government facilities totaling about $5 million. The proposals, which got initial approval on June 5, include creating a plan to redevelop the Platt Road site where the old juvenile center was located. The redevelopment might entail a mix of uses, including affordable housing.

A range of other items addressed on June 5 included: (1) creating an historic district for the Jarvis Stone School in Salem Township; (2) an update on the county’s Head Start program, which will be falling under control of the Washtenaw Intermediate School District; and (3) resolutions of opposition – one against gun violence and one against the long-range transportation plan of the Southeast Michigan Council of Governments (SEMCOG). The SEMCOG plan calls for expansion of I-94 in Detroit and I-75 in Oakland County. Some commissioners think that funding should be used to repair existing roads and bridges instead.

Court Funding

For several weeks during budget deliberations, Alicia Ping (R-District 3) has expressed concerns over the county’s approach to funding the court system.

Alicia Ping, Dan Smith, Washtenaw County board of commissioners, The Ann Arbor Chronicle

County commissioners Alicia Ping of Saline (R-District 3) and Dan Smith of Whitmore Lake (R-District 2) at the board’s June 5 meeting.

Unlike other units of county government, which prepare line-item budgets authorized by the county board, the courts operate under a memorandum of understanding with the board of commissioners. The board unanimously approved that MOU on Jan. 19, 2011, replacing one that had been in place since 1990. [.pdf of memorandum of understanding] Ping had been absent at that Jan. 19 meeting.

The agreement states that the county will provide “lump sum” funding to the courts, allocated to: (1) the trial court – an entity that includes the 22nd Circuit Court, court clerk services, juvenile court, Friend of the Court, and probate court; (2) 14A District Court; and (3) a portion of the county’s child care fund. The county does not have line-item budgeting authority, but the courts agreed to submit a bi-annual line-item budget, and to provide quarterly financial projections.

The MOU also covered the community corrections division. However, subsequently oversight of that operation has shifted from the trial court to the sheriff’s office, and is not subject to the lump sum agreement.

The 2011 MOU was signed by Conan Smith, who chaired the board at that time; Donald Shelton, chief judge of the trial court; and Kirk Tabbey, the 14A District Court’s chief judge.

From the general fund, the lump-sum payment to the courts in 2013 totals $19,155,029 – with $13,353,110 for the trial court and $5,801,919 for district court. In addition, state funding for certain trial court operations – the Friend of the Court and child care fund – totals $4,977,047. [.pdf of 2013 budget pages with trial court-related amounts highlighted]

The June 5 proposal by Ping, the board’s vice chair, came in the context of the administration’s goal of identifying $6.99 million in structural reductions for the overall 2014 general fund budget. For several weeks, Ping has raised concerns that the courts are treated differently than other county units in the budgeting process. At the board’s May 15, 2013 meeting, for example, she asked to see the history of funding for the courts, saying she was curious about whether the courts had cut in the same way that other county units had cut. “I’d like to know that we’re all in the game together,” she said at the time. [.pdf of historical funding for public safety & justice operations]

No court officials attended the June 5 meeting. Ping’s proposal had not been on the published agenda.

The process for ending the lump-sum agreement is written into the MOU. The term “the Court” is used to refer to all courts covered in the MOU:

13. Modification and Duration – This Agreement may be modified by mutual consent of the parties. This Agreement shall continue indefinitely and may be terminated only upon one year’s written notification by a party to all other parties. The County agrees to include the Court in the modification process relative to any County policies covered by this Agreement.

However, during the board’s June 5 ways & means committee meeting – when Ping brought forward her proposal – the discussion was based on a faulty assumption that the MOU called for a six-month notification process. That assumption influenced the debate, with some commissioners arguing that it was urgent to end the agreement before voting on the next budget. The administration is preparing a new four-year budget from 2014-2017, which will require board approval before Dec. 31, 2013.

The board’s discussion also focused most frequently on the trial court – the county’s largest court – although the MOU covers the 14A District Court and other court-related operations as well.

Court Funding: Ways & Means Committee – Trial Court Software

A court-related item was first mentioned near the beginning of the June 5 ways & means committee meeting, which immediately precedes the board meeting. Board chair Yousef Rabhi reported on the trial court’s efforts to secure new software. Court officials had approached him with a proposed vendor, Rabhi reported, but he had insisted that the court follow the county’s standard procurement process, including issuing an RFP (request for proposals). “This project, in my mind, should not be above [the RFP process],” Rabhi said. “I got pushback from folks saying that we wouldn’t get any other bidders, and that we’d just make a fool of ourselves and that we shouldn’t do the RFP process. But we stuck with it.”

The result of the RFP, Rabhi said, is that the same proposed vendor and the same service came in at a savings of $500,000. [.pdf of bid responses, which are still under evaluation] “I think that it’s a testament to the procurement process that we have,” he said, and that a good process leads to good outcomes.

Rabhi said he wasn’t arguing that the county should go ahead and approve the funding for the trial court’s new system – as that’s a topic that deserves more discussion. The item would be brought to the board at its August meeting, he said.

Court Funding: Ways & Means Committee – Ping’s Proposal

After other items at the ways & means meeting had been dispatched, Alicia Ping announced her intent to make a motion to give notice to the courts to terminate the lump-sum agreement with the county. No other elected official’s office is given a lump sum for its budget, and Ping felt it’s only proper that the board is able to look at everything as a whole – “and not just have a lump of money go to the court and not have any idea where it goes.” It’s especially important, she noted, as the county grapples to cut nearly $7 million from the 2014 budget.

The purpose isn’t necessarily to reduce the courts’ budget, she said. Rather, the board should know where the money is going, since commissioners are ultimately responsible for the entire county budget – including court operations.

Ronnie Peterson wondered if the relationship with the courts has deteriorated to the point that the board or administration isn’t communicating about what’s expected from the courts. Has any attempt been made to enhance that relationship, especially regarding the budget? He was very interested in engaging the chief judge [of the trial court, Donald Shelton], other judges and court administrators on this issue. Peterson said he respected Ping, but he hadn’t been privileged to know that this resolution would be made that night, or why it was being made.

Ping replied that she wasn’t aware of any deterioration in the relationship between the courts and the board. She said she was only proposing the notice of intent to terminate the agreement, saying that the agreement required a six-month notice before it could be ended. [This later proved to be faulty information; the agreement requires a 12-month notification.]

Lloyd Powell, Washtenaw County public defender, Washtenaw County board of commissioners, The Ann Arbor Chronicle

Lloyd Powell, Washtenaw County public defender.

Ping clarified that she didn’t intend to cut $7 million from the court budget. That $7 million figure is the amount of cuts that the county needs to make in its entire general fund budget. The notice, according to the county’s contract with the courts, lets court officials know that the county would like a line-item budget instead of a lump-sum approach. It’s not necessarily to cut the courts’ budget, she reiterated, but only to see where the money is going. “As a body, we are responsible for that money,” she said. Ping noted that the county’s public defender, Lloyd Powell, has reported that his office is doing triple the work now compared to previous years, with a lower budget.

If the board passes this resolution, Peterson replied, “there will be a big question in the minds of those seated in the House of Justice over what happened to their relationship with the board of commissioners.” If the board has an issue with the lump-sum approach, has anyone approached the courts to talk about it? he wondered.

County administrator Verna McDaniel reported that the administration has met with court officials about the upcoming budget, as part of the existing budget development process. Everything is on course based on the lump-sum approach, she said.

In that case, Peterson said, it seemed like this resolution was just to send a message to the courts about the board’s interest in discussing this issue – and that the court officials shouldn’t take offense.

Rolland Sizemore Jr. observed that regardless of the vote’s outcome, “tomorrow morning everybody in town will know about it.” His concern is that there hasn’t been discussion about this, and he wanted to schedule a working session on it. His understanding is that the courts are on budget. The board might be starting a fire that they couldn’t put out, he warned, and if the courts aren’t happy, they can hire an attorney that the county will have to pay for. He didn’t necessarily disagree with Ping, but he wouldn’t support her motion until the board has discussed the issue in more detail.

Conan Smith called Ping’s proposal “good government,” and he supported it. There are three branches of government, he noted. At the county level, the board of commissioners is the legislative branch. The board’s only check on those other branches of government – the judiciary, and the administrative branch of elected officials, like the water resources commissioner and sheriff – is “the power of the purse,” he said, and the ability to establish a budget. “When we approve a lump-sum budget, we abrogate that responsibility and we surrender that duty to other people. I don’t think that comports with our process of checks and balances.”

C. Smith pointed out that he had proposed pulling out of the lump-sum agreement in the past, when he was chair of the ways & means committee and again when he served as board chair. [Details of that history are included in The Chronicle's Jan. 19, 2011 meeting report.] He said he had struggled with the courts over it, in terms of getting them to understand how their budget impacts the systemic operations of the entire county. It’s appropriate for the board to have line-item authority over all of the county’s units, including the judiciary, he said.

In addition, it’s not a practice that’s out of line with the custom throughout the court system, C. Smith noted. The Michigan legislature approves line-item budgets for the state courts, and appropriates funding for specific programs, like the drug court. The legislature sets its priorities, via those budgets, he said, “and it’s the same thing for us.” If county commissioners believe that a drug court should be a priority, then they should articulate that in the courts’ budget and have the confidence that taxpayer dollars are being spent on that. “For me, it is a good governance question more than anything else.”

Dan Smith responded to the issue of timing, stating that the current agreement requires a six-month notice of intent to terminate. Just because commissioners give notice doesn’t mean they will end up terminating the lump-sum approach, he said. But if they don’t give notice, they have no options. By acting on it that night, they’ll keep their options open.

D. Smith also noted that this funding system has been put in place by the state legislature. The county board is responsible to allocate funding for county services, including the courts. He agreed with C. Smith that a lump-sum agreement abrogates that responsibility. He wasn’t saying that this was the best system. He thought the courts and many boards of commissioners across Michigan would like to handle it differently. A lot of people would be happy if the state legislature would take over funding of the courts, “and this body would not be in the middle of running the courts,” he said. However, “that is not where things are today.”

D. Smith reported that House Bill 4704 of 2013 had recently passed the state House of Representatives. It changes some of the county budget procedures, he noted. He read aloud a relevant portion of the bill, which states that the county budget “is presumed to fund those activities of a county mandated by law at a serviceable level.” The bill addresses ways to appeal those funding decisions, including mediation, and calls for any formal appeal to be handled by the state court of appeals, not the county circuit court. It appears to shift the balance, he said, adding that he isn’t intending to fire a shot across the bow of the courts and judges. But the board needs to keep its options open as they’re looking at a $7 million shortfall, he added, and there’s a huge pot of money that’s given to the courts “with essentially no oversight.”

Verna McDaniel, Yousef Rabhi, Washtenaw County board of commissioners, The Ann Arbor Chronicle

County board chair Yousef Rabhi of Ann Arbor (D-District 8). In the background is county administrator Verna McDaniel.

Yousef Rabhi spoke next, saying he wasn’t expecting this proposal to come forward that night. It had been discussed in the past, he noted, and he agreed that oversight was important. The lump-sum agreement might not be the best way to accomplish that. But he also believes in process, Rabhi said, and as board chair he felt his duty is to lead the county as a whole. “This action could have significant ramifications on our relationship with the courts, so I want to make sure that we’re understanding the full context of the action that we’re taking today.”

He asked McDaniel to talk about the history of the county’s relationship with the courts, particularly in terms of oversight and consistency. How are the courts treated, compared to other county units? What oversight does the board have?

When McDaniel indicated some uncertainty in responding, Rabhi said that in the absence of that information, he felt the board shouldn’t act on the proposal. He agreed in concept that the board needs more oversight of the courts, but commissioners need more information. They need a process in order to vet the idea and properly discuss it with court officials. The board needs to lead the county in a way that doesn’t alienate its partners, he said. Rabhi hoped commissioners would vote to postpone it so that they could discuss it at a working session. He said he was open to changing his mind, but that was his initial response.

Felicia Brabec noted that the board does have a process for addressing issues like this, and it begins at a working session. Resolutions are then brought forward for an initial vote at a ways & means committee meeting, she said, and then for a final vote at the regular board meeting. That process seems solid to her. She felt like she was being asked to make a decision without that process, having heard about it just that evening.

Pointing out that Rabhi had indicated he might change his mind, Conan Smith raised the issue of a four-year budget, which the board has authorized the administration to develop. Doing a lump sum for four years “makes me highly uncomfortable,” C. Smith said. He’s supportive of the four-year budget process because the board has strong control over the budget’s line items. But that’s not the case with the courts.

C. Smith also reiterated the point that the board wouldn’t be making a decision about the lump-sum budget itself. Commissioners are just making sure they have that option later in the year. This is simply starting the process. “If we don’t do it, then we’re hamstrung.”

Peterson moved to postpone initial action on the item until the board’s July 10 ways & means committee meeting.

Outcome on motion to postpone initial action: The motion failed on a 4-5 vote, with support only from Ronnie Peterson, Yousef Rabhi, Rolland Sizemore Jr. and Felicia Brabec.

Discussion continued.

Dan Smith argued that if commissioners wait until July to notify the courts, they’ll miss their window on this option and won’t have the option to eliminate the lump sum by the end of the year, when the budget must be adopted.

Ping compared her proposal to the board’s proposal to issue a notice of intent to bond. That notice of intent doesn’t mean the board will decide to issue bonds – it just provides that option, she said. The same is true with her proposal to notify the courts. Ping pointed out that she asked for a 10-year funding history of the courts about six weeks ago, and she raised the issue again at the board’s budget retreat in May. “Maybe nobody took it seriously up until I made this resolution,” she said, “but I have been talking about this for six weeks.”

She also was uncomfortable with a four-year lump-sum budget for the courts, given that there’s uncertainty about whether some of the courts will remain open, she noted. “If that budget’s in place, the money goes – whether they need it or not,” she said.

Sizemore noted that several commissioners had referred to a four-year budget, as though the board has decided to adopt a four-year budget. Perhaps they should revert to a two-year budget cycle, he said, which could give the board more control. [At its May 1, 2013 meeting, the board authorized McDaniel to develop a four-year budget process. However, the board is only required by state law to adopt the budget one year at a time. For several years, the county has worked on a two-year budget planning cycle.]

Ronnie Peterson, Washtenaw County board of commissioners, The Ann Arbor Chronicle

Washtenaw County commissioner Ronnie Peterson of Ypsilanti (D-District 6).

Peterson said he fully understood Ping’s intent. But for him, it’s a matter of respect for the courts. If at any time commissioners felt that they needed to discuss the lump-sum budget with the chief judge and court administrator, “we should have done that.” As he has in the past, Peterson expressed concerns about adopting a four-year budget. He felt that the courts were very accountable and responsive. The board can ask the courts for a line-item report of its expenditures, he noted – so there are already checks and balances in place.

The courts had wanted flexibility in spending their budget, and that request had been mediated years ago, resulting in a lump-sum agreement, Peterson said. And if commissioners had wanted to send a notice to the courts to terminate that agreement, they should have acted in January, he argued. Peterson felt the board itself hadn’t been very accountable regarding the $345 million bond proposal. “So as we blast others, let’s prepare to take a few pellets ourselves.”

Conan Smith agreed that the board has the right to ask the courts for detailed budget information. But in his experience, when he was chair of the ways & means committee and was dealing with a proposed $30 million deficit a few years ago, he said, the courts weren’t very forthcoming with information, including detailed projections. “It was extraordinarily frustrating,” he said.

Also, C. Smith added, “it shouldn’t be about asking – it should be about telling.” It’s the duty of the legislative body to determine how the county’s budget is allocated. He felt the board has an obligation to set the line items, telling the courts – by way of funding – what the board’s priorities are. That’s different from asking the court to inform the board about how a lump-sum budget is being spent, he noted.

Rabhi asked McDaniel to explain the purpose of a lump-sum agreement. She talked generally about the elements in the agreement, not the motivation behind it. She described it as “not a very detailed document” that spells out the powers of the county and the courts. Rabhi asked what actions the courts had taken to demand this kind of agreement. McDaniel said she didn’t think the courts demanded it, but that both the county administration and the court officials felt it was a good document to have a clearer understanding about the role of each entity. [In general, members of the judiciary view their operation as a separate unit of government, and believe that their independence should be reflected in the budget process. This is a tension that's not unique to Washtenaw County.]

Rabhi noted that the courts feel very strongly about the lump-sum agreement, so he was trying to understand their perspective. In addition to the oversight issue, he said, as board chair he has an interest in having “a peaceful, well-functioning organization – so I don’t want to make anybody angry in this process.” He acknowledged that people will likely be mad now that the discussion is already taking place.

He observed that Ping and other supporters of her proposal view it as the start of a process. If it passed, he hoped that commissioners would engage the board in that process and not go into it with the preconceived notion that the lump-sum agreement will be eliminated.

Andy LaBarre called the question, a procedural move meant to force a vote.

Outcome on calling the question: On a voice vote, the board unanimously agreed to call the question.

Outcome on initial vote to send a notice of termination: The item passed on a 5-4 vote, with support from Andy LaBarre, Kent Martinez-Kratz, Alicia Ping, Conan Smith and Dan Smith. Voting in dissent were Felicia Brabec, Ronnie Peterson, Yousef Rabhi and Rolland Sizemore Jr.

Dan Smith then moved to forward the item to the board’s regular meeting that same night.

Curtis Hedger, the county’s corporation counsel, explained that in a procedural motion like this, only five votes are needed to move the item to the board meeting. However, the vote at the board meeting would then need six votes in order to pass – a two-thirds majority.

Responding to a query from Rabhi, Hedger said if the board doesn’t take a final vote that night, the item would be moved to the board’s July 10 agenda. A six-month notice approved on July 10 would push the earliest termination date into January 2014. Hedger noted that the board can act at any time, saying a decision doesn’t need to be tied to the budget process. However, it would mean that negotiations with the courts would begin almost immediately after their 2014 budget had been approved.

In that case, Rabhi said, he’d support moving it to the board meeting that night for a final vote.

Curtis Hedger, Rolland Sizemore Jr., Washtenaw County board of commissioners, The Ann Arbor Chronicle

From left: Corporation counsel Curtis Hedger and commissioner Rolland Sizemore Jr. of Ypsilanti Township (D-District 5).

Peterson wanted to assure commissioners that the courts wouldn’t “roll over” on this issue. He felt the courts would ask for mediation. “This board may speak,” he said, “but you will not have the last word.”

Peterson argued that because the county pays all the bills, anyone can find out how the courts spend their lump-sum budget. Even with a line-item budget, he said, the only way to know if the courts – or any department – spent the money in the way it was allocated is to contact the finance department. The main issue is whether the budget for the courts is an appropriate amount – whether it’s given as a lump sum, or as a line-item budget. But if commissioners think they’ll be able to “rope in” the courts with a line-item budget, “you’re dreaming,” Peterson said. He couldn’t believe they’d wasted so much time discussing it, when they should have simply dispatched the county administrator to talk with court officials. “It’s not your job to be watchdogs of the court system …” he said.

Kent Martinez-Kratz noted that his constituents are asking about the $345 million bond proposal, and residents want every rock turned over regarding the budget. It might be grandiose to think that the county board can influence the court system, he said. But he didn’t think that creating an open and transparent budget for the courts is asking too much. As he asks his constituents to consider this bond proposal, he’s also asking the courts to produce a transparent budget. He thought his constituents would support that, too.

Brabec said she was struggling, because the board doesn’t know what the implications are. She agreed with the points on oversight and transparency. But they don’t know what unintended consequences this action might cause, because it’s so rushed.

Rabhi called the question.

Outcome on calling the question: It was approved on a unanimous voice vote.

Outcome on vote to move the item forward to the board meeting that same evening: The motion was approved on a 6-3 vote, over dissent from Felicia Brabec, Ronnie Peterson and Rolland Sizemore Jr.

Court Funding: Regular Board Meeting

During the board meeting that immediately followed the ways & means committee meeting, Rolland Sizemore Jr. asked about the notification timeline. Curtis Hedger reported that during a break between the two meetings, he’d looked at the memorandum of understanding. It actually states that a 12-month period of notification is required, not six months. So if the board approves giving notice that night, the agreement couldn’t be terminated until June of 2014. “So it is a bit of a difference than what we discussed at ways & means,” Hedger said.

Sizemore observed that the board spent an hour discussing something that doesn’t matter now, in terms of the budgeting process. “I’m not going to comment on that,” Hedger replied.

Ronnie Peterson asked that the lump-sum item be separated out from the other agenda votes, so that the board could discuss it further. He criticized the fact that the board acted on a resolution when they didn’t know all the facts. He wanted to make sure people knew he hadn’t been part of that, saying he had a different style of communication. He hoped to reach out to court officials in a different way, and to make sure they knew that the $7 million in cuts to the county budget “does not rest with the court.”

Conan Smith, Washtenaw County board of commissioners, The Ann Arbor Chronicle

Washtenaw County commissioner Conan Smith of Ann Arbor (D-District 9).

Conan Smith noted that the six month difference is significant in terms of timing, but it’s not significant in terms of the philosophical underpinning of whether to have a lump-sum agreement. Technically, the board could adopt a lump-sum budget for the first six months of 2014, then move into a line-item approach for the second six months. “It’s completely doable,” he said. The board gives up far too much authority over line-item expenditures in exchange for “peace in the valley,” he said. “I want to see something different.”

Alicia Ping said she thought of it as being six months early for the 2015 budget, rather than six months late for 2014. She supported C. Smith’s idea of doing a lump sum for the first six months of 2014, followed by a line-item budget.

Ping also pointed out that she in no way insinuated that she wanted to balance the county’s budget cuts on the back of the courts. “I never said that,” she noted, adding that in fact she had suggested the courts’ budget might not change at all, in terms of the amount. The request for a line-item approach isn’t out of line at all, she said. “I answer to the people in my district, the taxpayers. I don’t answer to the courts.”

Peterson noted that nothing mandates the courts to negotiate with the county, as long as there’s a signed agreement [the memorandum of understanding]. The only reason he could imagine that this was being brought up now is to save face, given that the 2014 budget “is $7 million out of whack.” The only thing that the county can do at this point is to ask the courts to cooperate and help address the deficit, he said.

But if the intent is for the board to manage the courts’ budget, that’s a very different discussion, Peterson said. “Those are two separate issues.” When the board can’t even narrow down its budget, he didn’t know how commissioners could presume to control the court system’s budget. The board hasn’t balanced its budget in a long time without using reserves or employee furlough days and other concessions, he said. What’s more, they’re now in a position to need to borrow $345 million to cover their retiree obligations, he noted. Peterson wasn’t interested in managing the judicial system’s budget. “We have our hands full.”

As chair of the board’s working session, Andy LaBarre said he hoped to diffuse some of the tension by rearranging the working session schedule to bump up this topic. Regarding the charge that the board had wasted an hour on this discussion, he quipped, “folks would say that’s not the first time, and sadly they would not be wrong.”

LaBarre observed that everyone is trying to address how to do things differently, given that they face an entirely new set of challenges. They need to understand where every dollar is going so that when they pass the budget, they can make the case to citizens that they’ve had a full discussion and it’s been well considered.

LaBarre also noted that the working session topics have been good, but attendance at those sessions “is not always as good as the volume of ideas that are brought forward for them.” He’s happy to move the topic up in the queue of working session schedules. “All I’d ask is that we come and have a full discussion with a full caucus.”

Yousef Rabhi described himself as conflicted on this issue. Accountability and transparency are very important, so he appreciated that Ping introduced this topic. But from a process and courtesy standpoint, the board is a partner with the court system, he said. The courts have helped balance the county’s budget, and the board needs to be respectful of that. He didn’t want to create a confrontational atmosphere, adding “I know some of that has already been done.”

Andy LaBarre, Washtenaw County board of commissioners, The Ann Arbor Chronicle

County commissioner Andy LaBarre of Ann Arbor (D-District 7).

In light of the longer one-year notice requirement, Rabhi said he’d like to postpone the item until the board’s July 10 meeting. Commissioners need to engage in a dialogue with court officials, he said. “Otherwise, it could lead down a very ugly path and one that I don’t want to go down. It’s going to be an interesting summer, one way or another.”

With that, Rabhi moved to postpone the item until July 10.

Dan Smith opposed postponement. He posited that this is exactly how the process is supposed to work. The board is a public body, he noted, and a motion was brought forward at a public meeting for a vote. This is the beginning of a 12- or 13-month conversation. At the end, the board might decide to continue with a lump-sum approach. But they can’t have that discussion unless they give notice to the courts. “I see no value in waiting another month to have a 13-month discussion versus a 12-month discussion,” he said.

Rabhi stressed that he appreciated that Ping had started the discussion. He noted that the board rules call for introducing an item at the ways & means meeting, then waiting until the board meeting two weeks later for a final vote. The board rules allow for a process to handle it in one night, but it’s more common to do it on different nights. That’s why he’s comfortable postponing the item until July, Rabhi said.

D. Smith noted that during the summer months, the board meets only once a month. It’s typical during the summer for the board to handle all agenda items by taking both an initial and final vote on the same evening.

Outcome on postponing until July 10: The board voted 6-3 to postpone, with dissent from Alicia Ping, Kent Martinez-Kratz and Dan Smith.

Bond Proposal

Aside from the unanticipated court budget discussion, the major item on the June 5 agenda concerned the proposed bond issue to cover the county’s retiree obligations. The meeting included the first of two public hearings on the potential $345 million bond proposal. A second hearing is scheduled for July 10, when the board will likely take action on the proposal.

The proposed bond issue of up to $345 million, the largest in the county’s history, is intended to cover unfunded pension and retiree healthcare obligations from the Washtenaw County Employees’ Retirement System (WCERS) and Voluntary Employees Beneficiary Association (VEBA) – the defined benefit pension and retiree healthcare plans. Those plans will be closed to employees hired after Jan. 1, 2014.

The proposal had first been mentioned publicly in mid-April, though the administration has been working on it since November of 2012, and commissioners had discussed it in closed session earlier this year as part of the county’s negotiations for new labor contracts. For background, see Chronicle coverage: “County Board Debates $345M Bond Proposal” and “County Budget, Bonding Decisions Loom.”

The original plan called for taking an initial vote on May 15 authorizing the publication of a “notice of intent” for the bond issue, with final approval on June 5. Responding to concerns about the speed at which the process was moving – without the opportunity for sufficient public input – board chair Yousef Rabhi pushed back the timetable. Now, it’s expected that a resolution to issue the notice of intent will come before the board on July 10 for initial – and possibly final – approval. This is a standard step in the bonding process, letting residents know that they have 45 days during which they can circulate petitions to require a vote of the people before any bonds are issued.

The board scheduled a working session on June 6 focused on the bond proposal. Participating in the session were: Jens Stephan, accounting professor at Eastern Michigan University; John Axe, the county’s bond counsel; and Larry Langer of Buck Consultants LLC.

In addition, other forums for public input are scheduled:

  • Saturday, June 15: 4-6 p.m. “Bonding over Coffee” with Yousef Rabhi at Espresso Royale, 214 S. Main St., Ann Arbor.
  • Wednesday, June 26: 4-6 p.m. “Bonding over Coffee” with Yousef Rabhi at Caribou Coffee, 1423 E. Stadium Blvd. (corner of Packard and Stadium).
  • Thursday, June 27: 4:30 p.m., public forum with county administrator Verna McDaniel at the Learning Resource Center, Room A, 4135 Washtenaw Ave., Ann Arbor.

Bond Proposal: Public Hearing & Public Commentary

Four people spoke at the June 5 public hearing.

Doug Smith spoke in strong opposition to the bonding proposal – both during the public hearing, and during the general public commentary. In addition to paying $239 million in interest, the move would downgrade the county’s bond rating, he argued, which means that every dollar that’s borrowed in the next 25 years will cost more in interest. It’s a very expensive way to kick the can down the road. He noted that the alternative put forward is to cut jobs. He suggested that cutting the overtime of the sheriff’s secretary would equate to more than a full-time employee. The county should find cuts in its budget long before it borrows money, Smith said.

Wes Prater, Kent Martinez-Kratz, Washtenaw County board of commissioners, The Ann Arbor Chronicle

From left: Former county commissioner Wes Prater and current commissioner Kent Martinez-Kratz of Chelsea (D-District 1).

Smith wondered how borrowing money, which the county would have to pay interest on, is somehow going to solve the county’s problems. He said he didn’t quite understand what the county was doing. There’s no revenue associated with the bonding, he noted – it’s not like building something that will generate money to help pay off the bond. At minimum, he suggested, the county should take a variety of approaches, including budget cuts and tax increase. There needs to be a combination to avoid putting the county $600 million worth in debt, he concluded.

Thomas Partridge said it was unjust, unfair and anti-democratic that the county had presented only one plan. He pointed out that the county has additional time to look at this issue, and that there are other options – including the option of putting a millage on the ballot to pay for these retiree obligations. Partridge called that a good alternative. Another option is to tighten the county’s budget even further, and downsize the county services, but that’s too much in line with Mitt Romney, he said.

Kathy Fojtik Stroud recommended that the board investigate the possibility of a new millage. She said the gossip in her neighborhood was that the board would put a millage proposal on the ballot to pay for these retiree obligations. It would give the citizens an opportunity to vote on it.

Wes Prater started by thanking the board and staff for slowing down the process, and for bringing in experts to discuss the issue. It was a wise thing to do, he said. He asked about the timing of the new actuarial reports – when would those be completed? If they don’t have those reports, how can they make an informed decision? He argued that the legislation that enabled this type of bond sale hadn’t been created with sufficient research. Other than this particular exception to bond for retiree obligations, Michigan’s municipal finance act only allows for bonding to fund capital improvements without a vote of the people, he said. More research is needed, he concluded.

Bond Proposal: Communications & Discussion

During the county administrator’s report, Verna McDaniel said she’d been communicating about the bond proposal with township officials, county employees and the public.

Felicia Brabec, chair of the board’s ways & means committee, reviewed activity related to developing a four-year budget for the county, from 2014-2017, including outreach efforts for the bond proposal. She laid out the timeline for items coming before the board that relate to the bond proposal. Action on July 10 will include:

  • Vote on a “notice of intent” to issue the bonds. This is a standard initial step in the bonding process, letting residents know that they have 45 days during which they can circulate petitions to require a vote of the people before any bonds are issued.
  • Vote the bond resolution and “continuing disclosure” resolution. The board will be asked to set a maximum amount for the bond. The continuing disclosure resolution is standard for all bond issues over $1 million, and indicates that the county will provide updated financial information annually during the term of the bond.
  • Vote to create an intermediate trust. The trust will receive the bond proceeds, and trustees will be appointed to oversee the money managers that will be hired to handle the investments.

Brabec said that if these items receive initial approval on July 10, they’ll be forwarded for a final vote at a special board meeting set for July 24. [It's also possible for the board to decide to take a final vote on the items that same night.]

Felicia Brabec, Washtenaw County board of commissioners, Pittsfield Township, The Ann Arbor Chronicle

Felicia Brabec of Pittsfield Township (D-District 4) is chair of the county board’s ways & means committee.

Board chair Yousef Rabhi highlighted his “Bonding over Coffee” meetings in Ann Arbor. Rolland Sizemore Jr. wanted someone to hold a similar session on the east side of the county. Rabhi noted that he had scheduled his coffee hours to make it convenient for constituents in his Ann Arbor district – and that’s why the sessions were located in Ann Arbor, not elsewhere in the county. Rabhi wondered if McDaniel’s June 27 public meeting at the Learning Resource Center, just east of Carpenter Road, was far enough east to serve resident on that side of the county. Sizemore indicated that the LRC meeting would suffice.

Alicia Ping also put in a request to hold a public forum on the county’s west side, saying that she and Kent Martinez-Kratz – who represent districts in southwest and west Washtenaw, respectively – would appreciate it. McDaniel agreed to set something up.

Later in the meeting, Sizemore complained that he has asked the administration for alternatives to the $345 million bond proposal, but none have been presented. He suggested that there are other budget items that could be cut, such as overtime or providing less expensive cars to employees.

Sizemore also wanted the administration to provide a summary that would “dummy down” the proposal to make it easier for commissioners and the public to understand.

Ronnie Peterson wondered if the county would be borrowing more than the amount of its pension and retiree health care obligations. Curtis Hedger, the county’s corporation counsel, replied that it isn’t legally possible to bond for more than the amount of those obligations. However, the amount won’t be known until the actuarial reports are completed in late June. Hedger noted that the bond counsel and financial consultant had been very conservative when they estimated that the county would need up to $345 million. The administration is hoping that the actual amount will be lower than that.

Peterson also asked where the money would come from to make the bond payments. County administrator Verna McDaniel answered in a general way, saying the funds would come from monies that the county already collects, as well as from the bond proceeds. Each department will make a contribution to those obligations, she said. Those amounts will be reflected in the budget, starting in 2014. Peterson said he wanted to make sure the county would be able to meet its obligations, without any massive reduction in services or layoffs. He wanted everyone to understand clearly where those bond payments are coming from.

Conan Smith asked for the amount of the county’s current bond payment for those retiree obligations. McDaniel clarified that the county doesn’t currently have a bond for that, but it does make annual contributions to cover those obligations. The most recent payment was $20 million, she said. Without the bonding, the 2014 payment will be higher, she noted.

C. Smith pointed out that the bond is structured so that annual payments over the 25 years will range from between $12 million and $26 million. But the county’s actuarial contributions might be as high as $30 million a year during that time, he said – that’s what the actuarial study will project. If the county bonds, its payment will show up on the books as a line item for bond payments. If the county doesn’t bond, it will show up as an unfunded liability, he said.

Peterson noted that some of the current payments for retiree obligations are made from federal and state grants that support certain county programs. But over the course of the 25-year bond, there will be possibly 5 or 6 new U.S. presidents, he said, and 4 or 5 new governors. These changing administrations could have an effect, because the county relies so much on federal and state dollars, Peterson said. Only about half of the county’s entire budget is tied to the general fund, he noted. The rest is from federal and state funding, and in that regard the county is at the mercy of other governments. Whenever that funding is reduced, it impacts the county’s ability to make retiree contributions.

Peterson said he was concerned about the county’s ability in the future to make bond payments out of the general fund, if federal and state funding is cut. That could result in massive layoffs, he noted, because the county will be obligated to pay the bond. “This bond will supersede anything else we do,” he said. Referring to the county’s possible shift to a four-year budget cycle, Peterson said he didn’t know how that could work, given the uncertainty of federal and state funding. He said he’s not “throwing bricks” at the administrator – it’s the board’s responsibility.

Dan Smith, Andy LaBarre, Washtenaw County board of commissioners, The Ann Arbor Chronicle

Commissioners Dan Smith of Whitmore Lake (R-District 2) and Andy LaBarre of Ann Arbor (D-District 7).

Conan Smith thanked Peterson for bringing up this point. He noted that part of the revenue stream for paying off the bond would come from current employees who are in the defined benefit plan, and who are contributing to that plan. So the portion of those employees who are in non-general fund programs – supported by state and federal funding – are less under the county’s control. If that funding is cut, the county would likely need to eliminate those jobs, he said, which in turn will eliminate the contributions that those employees make toward retirement obligations. It’s an element of risk that’s outside the county’s “zone of control,” he said. But that risk declines over time, and is predictable, he added. The county knows the number of employees who are in the plan, and how much they contribute.

C. Smith asked McDaniel if she could provide information about the scope of the risk that Peterson had identified, in case the board decides to develop a contingency plan for the loss of state and federal funding. It’s not an actuarial question, he noted. It’s a matter of identifying the number of employees in non-general fund programs, and how much they would contribute to the bond payment strategy. If all of those employees were to disappear, what would that do to the revenue stream for repaying the bond? he asked.

McDaniel replied that if those jobs are eliminated, some of the retiree obligations will be eliminated too – because not all employees would be vested. C. Smith still wanted to get a sense of what the range of risk might be.

Dan Smith noted that if the county issues bonds and jobs are subsequently eliminated because of a cut in federal or state funding, the obligations for those employees don’t go away – because the county would be repaying the bonds, not the retiree obligations. The only opportunity to discharge that obligation is when the bonds are called. “The fact that we have issued bonds makes all these liabilities – these soft liabilities – it turns them into a real hard honest-to-goodness liabilities that we must pay.” Those bond payments must be made on schedule, he said, no matter what.

Outcome: This was not a voting item. The board is expected to take action on the bond proposal – and to hold another public hearing – at its July 10 meeting.

Facilities Plan

A strategic space plan was on the June 5 agenda for initial approval, laying out a range of infrastructure projects for Washtenaw County government facilities totaling about $5 million. The proposals include redeveloping the Platt Road site where the old juvenile center was located.

Projects include:

  • Demolish the former juvenile center and explore redeveloping the site at 2260 and 2270 Platt Road in Ann Arbor for affordable housing, alternative energy solutions, and county offices.
  • At 200 N. Main in Ann Arbor, consolidate the land records from the building’s lower level to the 1st floor, and remodel the lower level to accommodate administrative offices.
  • At 220 N. Main in Ann Arbor, repurpose space in the garden level, including redesigning conference room space.
  • At 110 N. Fourth in Ann Arbor (known as the Annex), relocate the Office of Community and Economic Development, Office of Infrastructure Management, and the Public Defender’s office to other leased and county-owned space. For example, the Public Defender’s office will be relocated to the City Center building at the southwest corner of Fifth & Huron.
  • At the county’s service center near Washtenaw and Hogback, redesign the Learning Resource Center (LRC) as a full conference center, providing county-owned space for large and small meetings. Also, make parking improvements, including adding 110 new spaces, rebuilding the lot between the LRC and the courthouse, and resurfacing the entry drive off of Hogback.
  • At a location to be determined, develop a specialty vehicle storage facility for the sheriff’s office and other departments.

According to Greg Dill, the county’s infrastructure management director, no general fund dollars will be used for the projects, which are estimated to cost about $5 million.

Greg Dill, Washtenaw County board of commissioners, The Ann Arbor Chronicle

Greg Dill, Washtenaw County’s infrastructure management director.

Funding will come from several sources: (1) $1 million from the 1/8th mill fund balance; (2) $650,000 from the facilities operations & maintenance fund balance; (3) $650,000 from the Office of Community & Economic Development reserves; (4) $500,000 from the tech plan fund balance; and (5) $2.2 million from the county’s capital reserves. Dill had briefed commissioners on the plan at a March 20, 2013 working session.

In addition to the projects listed above, other changes will be made to accommodate the county’s Community Support and Treatment Services (CSTS) unit, which provides contract services to the Washtenaw Community Health Organization (WCHO). The WCHO will pay for that facilities work, including moving the entire Adult MI program staff to the Annex at 110 N. Fourth; repurposing vacated space at 2140 Ellsworth for Youth and Family Services; and relocating all “service delivery” units to the 1st floor of the Towner II building at 555 Towner Street in Ypsilanti.

Facilities Plan: Board Discussion

Felicia Brabec asked about the amount of funding provided by OCED, and confirmed with Greg Dill that it was an estimate for moving costs. If the move doesn’t cost that much, she asked, what happens with the extra funds?

Dill replied that the entire plan is based on initial estimates. The staff will make adjustments as the projects move forward, and if the cost for OCED is less than estimated, the money will return to the OCED reserves.

Most of the remaining board discussion focused on the Platt Road property. Conan Smith asked Dill to talk about the process of developing a plan for that site.

The first phase is to demolish the buildings on the property, Dill explained. The county had issued an RFP (request for proposals) and is now in the process of selecting a firm for that work. The second phase would be developing a plan for the site. Dill said he’s had several conversations with board chair Yousef Rabhi about that, including the likelihood of a steering committee to guide the process. Dill expected that he’d return to the board later this year with an updated proposal for that site.

In response to a query from Ronnie Peterson, Dill described the plan for Platt Road as still very early in the process. The staff first wanted to get the space plan approved and the funding settled, he said. Then there would be discussion about who should serve on the Platt Road steering committee and what their charge should be. Dill planned to work with Rabhi on that, but it would be brought back to the board for action.

Rabhi added that Andy LaBarre would be involved as well, since the site is in District 7, which is represented by LaBarre. Rabhi noted that LaBarre is interested in engaging neighbors and others in that area about the site’s future.

Peterson thanked Rabhi for the information, adding that “I wish I was invited to more things that happen in my district.” A lot of county activity happens in his district and in Rolland Sizemore Jr.’s district, Peterson said, “and I sometimes read it in the newspaper.” [Sizemore and Peterson represent districts 5 and 6, respectively, primarily covering Ypsilanti and Ypsilanti Township.]

Peterson said it seemed the Platt Road property might be put up for sale, because the space plan indicated affordable housing on the site. But “we’re not in the housing business,” he said. Peterson felt that the resolution before the board that night was indicating an intent to sell. Dill replied that a decision to sell hasn’t been determined. The only action that the board would be taking that night was to demolish the two structures on the site.

Before the July 10 final vote, Peterson wanted to know exactly where the funding for the overall plan would be coming from, and how much would remain in the fund balances and reserves.

Sizemore wanted more detail about the specific projects, like how much the demolition of the Platt Road buildings would cost. Dill offered to prepare a supplemental document with that information. Sizemore complimented Dill and his staff for their work on the Platt Road property, saying that he enjoyed seeing community gardens there.

In general, Sizemore expressed his view that the county doesn’t need new buildings, so he wouldn’t support any plan that included building new offices. He noted that there are vacant school buildings that might be available for use in certain parts of the county.

Sizemore also urged Dill to find opportunities to involve youth. Dill replied that his staff looks for opportunities for job shadowing and other youth involvement in every aspect of the county’s operation, not just this space plan. Sizemore acknowledged that Dill has been helpful in that regard. He also noted that the Washtenaw International High School is looking for summer internship opportunities.

Conan Smith recalled the lengthy discussion on the overall space plan that was held at the board’s March 20, 2013 working session, saying that he had the materials from that session. He wondered if there was another document that articulates the strategic infrastructure plan. Dill indicated that the same materials from the working session were the basis for the current plan.

Smith then noted that in the conversations he’s had with Dill, they hadn’t talked about divesting the Platt Road property. “We have not talked about that,” Dill confirmed. “Of course that is a decision that this body will undertake. We made no plans for the disposal of that property, except to get a formal appraisal of the site.”

Smith also confirmed with Dill that the vote being taken that night was to approve a planning process for the site, as well as demolition of the buildings.

Outcome: The board unanimously gave initial approval to the facilities space plan, with a final vote expected on July 10.

Millage Rates

The board had given initial approval on May 15, 2013 to set Washtenaw County’s 2013 general operating millage rate at 4.5493 mills – unchanged from the current rate. The item was on the June 5 agenda for a final vote.

Several other county millages were part of the same resolution and are levied separately: emergency communications (0.2000 mills), the Huron Clinton Metroparks Authority (0.2146 mills), two for county parks and recreation (0.2353 mills and 0.2367 mills) and for the natural areas preservation program (0.2409 mills). That brings the total county millage rate to 5.6768 mills, a rate that’s also unchanged from 2012.

This is an annual procedural action, not a vote to levy new taxes. With a few minor exceptions, the county board does not have authority to levy taxes independently. Millage increases, new millages or an action to reset a millage at its original rate (known as a Headlee override) would require voter approval.

The rates will be included on the July tax bills for property owners in Washtenaw County.

Millage Rates: Public Hearing

The only speaker at a public hearing on the millage rates was Thomas Partridge. He said the millage revenues were insufficient to provide for the needs of county residents. The board has been bereft of ideas to support affordable housing, public transportation, health care and other needs, he said. He suggested proposing a Headlee override.

Outcome: Without discussion, the board gave final approval to set the county’s millage rates.

Gun Violence Awareness

Commissioners were asked to pass a resolution declaring June 2013 as Gun and Societal Violence Awareness Month.

The resolution stated that the board “supports President Barack Obama’s continued efforts to reduce gun violence through enhanced background checks, restricted sales of some types of ammunition and high capacity magazines; and … further supports the reduction of societal violence through the development of proactive programs that will educate citizens on non-violent conflict resolution and allow physicians to prevent firearm and other violence related injuries through health screening, patient counseling, and referral to mental health services for those with behavioral or emotional medical conditions.”

According to county records, applications for concealed pistol licenses in Washtenaw County have increased dramatically so far this year. There were 1,510 applications for the first four months of 2013, compared to 717 applications during the same period in 2012. For the full 12-month period in 2012, the county received 2,153 applications – compared to 546 in 2007. [.pdf of application data from 2004-2013] [.pdf of approved licenses from 2008-2013]

The June 5 resolution was brought forward by board chair Yousef Rabhi and commissioner Conan Smith – both Democrats representing districts in Ann Arbor.

Gun Violence Awareness: Public Commentary

Kathy Fojtik Stroud of Ann Arbor spoke at the beginning of the June 5 meeting, and started by telling commissioners that she had figured out why the boardroom felt smaller – there were only nine commissioners now, compared to previous years when there had been more commissioners. [Redistricting took effect with the 2012 election, reducing the number of Washtenaw County districts from 11 to 9.]

Stroud was speaking on behalf of the Washtenaw County health code appeals board, an appointed body on which she serves. That board had passed a resolution urging county commissioners to pass the resolution in support of reducing gun violence and societal violence. Other groups – including the Interfaith Council on Peace & Justice, a lot of churches and other organizations – are supportive of this action, she said.

Andy LaBarre (D-District 7) noted that Stroud had served on the county board of commissioners in the 1970s, and he appreciated her service.

Gun Violence Awareness: Board Discussion

Yousef Rabhi highlighted the resolution, noting that there have been some very tragic gun-related deaths in the past few months. He thought that Washtenaw County should take a step in recognizing these acts as horrific, and in recognizing the need for the country to move forward with some sort of reform that can bring an end to this type of violence. He hoped commissioners would support it. There was no further comment from commissioners.

Outcome: The board unanimously passed the gun violence resolution.

SEMCOG Long-Range Plan

Yousef Rabhi also brought forward a resolution opposing the 2040 long-range regional transportation plan developed by the Southeast Michigan Council of Governments (SEMCOG). Specifically, he opposes the recommendation to expand I-94 in Detroit and I-75 in Oakland County.

The resolved clauses stated:

NOW THEREFORE BE IT RESOLVED that the Washtenaw County Board of Commissioners opposes the inclusion of these highway capacity expansion projects in the 2040 Long-Range Plan.

BE IT FURTHER RESOLVED that the Washtenaw County Board of Commissioners requests that funding currently programmed for these capacity projects be redirected to preventive maintenance and rehabilitation of existing roads and bridges, addressing critical safety needs, and enhancing quality of life.

BE IT FURTHER RESOLVED that this resolution be transmitted to SEMCOG, the Michigan Department of Transportation, and State Senators Randy Richardville and Rebekah Warren, and State Representatives Gretchen Driskell, Jeff Irwin, David Rutledge, and Adam Zemke in advance of SEMCOG’s June 20, 2013, General Assembly meeting.

Rabhi noted that he had raised this issue at the board’s May 15, 2013 meeting. His concerns are social and environmental. The region shouldn’t be building more roads for cars. Instead more alternative forms of transportation should be built. The highway system has already destroyed neighborhoods and impeded economic development in certain areas, and this expansion would only continue that.

A more conservative mindset, Rabhi said, would argue against investing in new infrastructure at a time when governments can’t maintain the existing infrastructure – including a crumbling bridge and road system. At SEMCOG’s executive committee meeting in May, Rabhi said he voted against the long-range plan, and he intends to vote against it at the entity’s general assembly later in June. He believes that both progressive and conservative minds can find reasons to oppose this plan.

Rolland Sizemore Jr. wondered how this plan related to the southeast Michigan regional transit authority (RTA), of which Washtenaw County is a part. He hoped the board would hold a working session on the RTA soon.

Rabhi explained that since SEMCOG’s funding can’t be used for transit, it doesn’t affect the RTA. It must be used on roads, but it could be used for repair rather than new construction, he said.

Conan Smith said he shared Rabhi’s concerns. The Washtenaw County road commission has a list of unfunded needs totaling $82 million. He criticized the idea that some of those dollars would be used to build new infrastructure at a time when the demand isn’t there, even based on SEMCOG’s own population projections.

Outcome: Commissioners unanimously approved the resolution opposing SEMCOG’s long-range regional transportation plan.

Dexter Annexation

Commissioners were asked to set a public hearing for July 10, 2013 regarding the annexation of land from Scio Township into the village of Dexter. Commissioners are expected to vote on the annexation that same night.

According to the county’s corporation counsel, Curtis Hedger, the annexation of township property into a village is one of the few instances that requires county board approval. Generally, annexation is handled by the individual municipalities where the annexation occurs.

A letter to the county from Dexter village manager Donna Dettling states that the annexation request – for a 16.66-acre property – was made by the property owner, Dexter Fastener Technologies, known as Dextech. The land is adjacent to the Dexter Business & Research Park, where Dextech hopes to expand. The company is one of Dexter’s largest employers.

On May 13, 2013, the Dexter village council unanimously passed a resolution in support of the annexation. The resolution indicates that although the Scio Township board did not take formal action about the request, there was generally support for the action. [.pdf of communications from Dexter regarding the annexation]

Outcome: Without discussion, commissioners set the annexation hearing for July 10.

Jarvis Stone School

The county board was asked to designate Jarvis Stone School in Salem Township as an historic district. The building is a former one-room schoolhouse built in 1857 and located at 7991 North Territorial Road.

Specifically, the board was asked to approve an ordinance that designates the 1.42-acre property as an historic district under the jurisdiction of the Washtenaw County Historic District Commission. [.pdf of proposed ordinance] The property is owned by the Salem Area Historical Society, which uses the school as its headquarters. It would be the second historic district in Salem Township. The first one is Conant Farm on Napier Road.

The Salem Township board had granted a request to consider the property as an historic district in 2011. And at its Oct. 19, 2011 meeting, the county board voted to establish a study committee regarding the request. That report was completed this year. [.pdf of study committee report]

Jarvis Stone School: Public Commentary

Terry Cwik, president of the Salem Area Historical Society, described the process that had been undertaken, calling it a team effort of a volunteer group. Cwik praised two county staff members – Cynthia Christensen and Melissa Milton-Pung – who had provided guidance on developing the final report. About 25-30 people had attended a public meeting in January about this project, giving only positive feedback and input, he said. And the Salem Township board has voted unanimously in support of the ordinance to create the historic district. Cwik hoped that commissioners would make Jarvis Stone School the county’s 13th historic district, and that the county would continue to preserve its past into the future.

Marcia Van Fossen, vice president of the Salem Area Historical Society, also spoke in support of the new district. She noted that a previous member of the county board lives in Salem Township, and she hoped that it would influence the board’s decision to approve the new district. [Van Fossen was alluding to Alma Wheeler Smith, who is also the mother of current county commissioner Conan Smith.]

In responding to Van Fossen’s remarks, Conan Smith quipped: “My mom told me to vote yes.”

Alicia Ping thanked Cwik and Van Fossen for their work, noting that she had served on the Saline Historical District Commission for 11 years. It takes a lot of work to make something like this happen, she said.

Jarvis Stone School: Board Discussion

Conan Smith questioned why this proposal wasn’t first brought forward for initial approval at the board’s ways & means committee meeting, rather than just receiving one final vote at the board meeting that night. Curtis Hedger, the county’s corporation counsel, explained that because the county doesn’t have original jurisdiction over historic districts, this type of resolution has always gone directly to the board meeting. He explained how the process works. First, a local government where the proposed historic district would be located contacts the county, starting the process in motion. The county’s historic district commission studies the proposal, then makes a recommendation to the county board.

Hedger said he’s reviewed all the previous historic districts that the county has created, including Gordon Hall in the Dexter area. The county is simply doing what it’s contractually obligated to do, he said. Although the county is creating a new ordinance, it’s a very specific type of ordinance, outlined in the state enabling legislation for county historical district commissions.

Smith said he was fully supportive of creating the district for Jarvis Stone School, but he was concerned that there hadn’t been sufficient public notice about it. He asked for the opinion of Dan Smith, who represents District 2, where the historic school is located.

Dan Smith replied that he had received emails from Terry Cwik of the Salem Area Historical Society, notifying him that this process was moving forward. D. Smith indicated that others in the community had been contacted as well about the process.

Outcome: The board unanimously approved creating the Jarvis Stone School historic district.

Community Corrections Plan

At their June 5 meeting, commissioners were asked to approve an annual community corrections plan with a $1,042,468 budget for FY 2013-14 – from Oct. 1, 2013 through Sept. 30, 2014. [.pdf of community corrections plan]

The community corrections division is a unit of the Washtenaw County sheriff’s office, with an emphasis on programs and services aimed at keeping people out of jail by providing sentencing options for the Washtenaw County trial court – including pre-trial services, drug testing, electronic monitoring, and social education. The funding comes from several sources: (1) $421,900 in state revenue; (2) $260,890 in program-generated fees; (3) $240,983 in appropriations from the county’s general fund; and (4) $118,703 from fund balance.

According to a staff memo, an estimated 99,365 jail bed days were saved in 2012, for an estimated savings of $8.446 million – based on an estimate of $85 per day for incarceration. [.pdf of staff memo]

Outcome: Without discussion, commissioners gave both initial and final approval to the community correction plan.

Brownfield Public Hearings

On the agenda were resolutions to set public hearings for July 10 regarding two brownfield redevelopment projects in Ann Arbor – at Packard Square (the former Georgetown Mall), and 544 Detroit St.

Since the city of Ann Arbor joined the Washtenaw County Brownfield Redevelopment Authority (WCBRA) in 2002, brownfield projects located in the city must receive approval by the county board. The state’s brownfield program offers incentives for redevelopment of property that’s contaminated, blighted or “functionally obsolete.”

The 544 Detroit St. project is seeking brownfield status so that it will be eligible for brownfield tax increment financing. The site plan calls for a three-story “flatiron-style” building, located at the triangle tip of Detroit and North Division, just southwest of the Broadway bridge – the site of a long-abandoned gas station in the Old Fourth ward Historic District. The new building would include offices on the first floor and residences on the upper two floors. The project’s site plan received a recommendation for approval by the Ann Arbor planning commission on Dec. 18, 2012. Both the site plan and brownfield plan are expected to be on the council’s June 17 agenda, according to city planning manager Wendy Rampson.

For Packard Square, the July 10 hearing relates to a proposed amendment to the project’s original brownfield redevelopment plan, which the county board approved after much debate on May 18, 2011. At that same meeting, the board approved a $1 million grant application to the state Dept. of Environmental Quality for brownfield cleanup at the proposed $50 million development – that grant was later awarded to the project. Demolition is underway, with plans to build more than 200 apartments and 20,000 square feet of commercial space at 2502-2568 Packard Street.

The amendment to Packard Square’s brownfield plan would add eligible activities that qualify for brownfield tax increment financing, including underground parking and urban stormwater management infrastructure. Those activities are now eligible for TIF, following changes by the state legislature to the Brownfield Redevelopment Act 381 in December 2012.

Outcome: The public hearings for both projects were set for July 10, when the county board will likely take action on both brownfield items. The vote on the Packard Square hearing was unanimous. For the 544 Detroit St. hearing, the board’s two Republican commissioners – Alicia Ping and Dan Smith – cast the only votes of dissent. They did not publicly state their reasons for voting against the hearing on that project. In the past, they and other commissioners have expressed concern about the diversion of property tax revenues through TIF districts. While the Packard Square TIF already exists, the TIF for 544 Detroit would be new.

Communications & Commentary

During the evening there were multiple opportunities for communications from the administration and commissioners, as well as public commentary. In addition to issues reported earlier in this article, here are some other highlights.

Communications & Commentary: Head Start

Dan Smith highlighted an item in the claims report related to Head Start. He asked for a brief update on the situation with Head Start. [For the period April 27 through May 17, 2013, a total of $13,014 had been paid in claims related to the Head Start program.]

County administrator Verna McDaniel reported that federal officials have begun negotiating with the Washtenaw Intermediate School District (WISD) about taking over the local Head Start operation. A notice has been issued to grant WISD the funding to support Head Start, she said. The county has been instructed to negotiate a transfer of assets.

In response to a query from Ronnie Peterson, McDaniel said that leasing the county’s Head Start facility to WISD is probably the best option at this point. Peterson said he was concerned about the location of the Head Start program, and wanted to make sure it stayed close to those who need it most.

By way of background, in 2011 the board voted to relinquish the county’s 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.

The county-owned Head Start building at 1661 Leforge in Ypsilanti was built in 2003. The 17,500-square-foot building on 10 acres of land is tied to the early childhood program. The county still owes about $2.6 million on the bond for the building, and makes $167,000 in bond payments annually. The bond payment schedule runs through 2022.

Communications & Commentary: County Budget

Felicia Brabec, chair of the board’s ways & means committee, reviewed activity related to developing a four-year budget for the county, from 2014-2017. Most of the update related to the bond proposal, which is reported earlier in this article.

Rolland Sizemore Jr. noted that Dick Fleece, the city’s public health director, plans to retire at the end of 2013. Sizemore felt it might be a good opportunity to review the entire public health department, before filling that position. He suggested scheduling a working session on that topic.

Communications & Commentary: Road Commission

As liaison to the county road commission, Rolland Sizemore Jr. reported that the commission is forming a committee to look at the condition of roads throughout the county. He’ll be serving on that.

Somewhat related, Sizemore – who also serves on the board of the Ypsilanti Area Convention & Visitors Bureau – had copies of a guide that was put out of routes in Washtenaw County for motorcyclists.

Communications & Commentary: Public Commentary

Thomas Partridge spoke at the evening’s two opportunities for public commentary, in addition to the public hearings reported above. He generally criticized the board for not attending to important issues like affordable housing, public transportation, health care and taking care of the needs of the most vulnerable.

Present: Felicia Brabec, Andy LaBarre, Kent Martinez-Kratz, Ronnie Peterson, Alicia Ping, Yousef Rabhi, Rolland Sizemore Jr., Conan Smith, Dan Smith.

Next regular board meeting: Wednesday, July 10, 2013 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. [Check Chronicle event listings to 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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  1. By Kerry D.
    June 15, 2013 at 7:57 pm | permalink

    The circuit court needs greater scrutiny – it is not run ideally.

    Remember the deputy administrator a few years ago charged with embezzling from the juror fee fund?

    Jeff Irwin and Chief Judge Archie Brown had a battle years ago over funding for security – which Irwin won.

    I applaud Conan Smith for his efforts in ridding lump-sum budgeting in this instance.

  2. June 16, 2013 at 9:44 am | permalink

    The conflict between the BOC/Administrator and the courts (which, we note, does not include the 15th District Court, funded by the City of Ann Arbor) goes back a long, long way. (And Cmr. Peterson is a veteran of earlier discussions.) Basically, the judges and administrators of the court system do not want the commissioners to micromanage – or manage at any level – the courts operation. They have some substantive documentation to show that Michigan considers the court system to be independent.

    But since budgets are a policy instrument – this means that simply by line-item decisions, the BOC could make policy. Therein lies the problem. Yet, in this current difficult economic climate, writing a “blank check” to the courts is objectionable, when all other functions are being cut.

    I’m wishing the BOC the very best in cutting this Gordian knot.

  3. By Kristin Judge
    June 16, 2013 at 9:23 pm | permalink

    If a software purchase needs an RFP, doesn’t a bond deal? I don’t remember the details, but I remember as I first was elected how thankful we all were that we did not listen the first time Mr. Lax suggested this idea in 2008. It may be good now, but if Commisioner Prater has concerns, they should be heard and fully addressed. He researched this issue for years!

  4. By Leah Gunn
    June 17, 2013 at 8:42 am | permalink

    Kristen, it is John Axe, not Jerry Lax. Mr. Axe is the county’s bond counsel. Jerry Lax has no connection with the county.

  5. June 17, 2013 at 10:29 am | permalink

    Please clarify: John Axe does not actually hold a county position, that is, is not a county employee or official. He runs a private firm (Municipal Financial Consultants Incorporated) which does most of the bond business with the county.

    I recall that when I was on the Board of Public Works, at least one other bond counsel firm was employed. It is apparently a competitive business.

  6. By Mary Morgan
    June 17, 2013 at 10:57 am | permalink

    John Axe is not an employee of Washtenaw County. His firm is Axe & Ecklund, based in Grosse Pointe Farms. Axe is an attorney who has been hired on a contract basis as the county’s primary bond counsel for decades, and who helped craft the state legislation that permits the type of bonding for retiree obligations that the county is now considering. Municipal Financial Consultants Incorporated is a separate company that also is frequently hired by the county as a financial consultant for bonding-related work. Axe & Ecklund provides a 15% discount on its fees if the county hires MFCI as the financial consultant. MFCI president Meredith Shanle is Axe’s daughter – although until recently, most commissioners hadn’t been aware of that relationship.

  7. By Kristin Judge
    June 17, 2013 at 12:04 pm | permalink

    Thanks for catching my error on my Axe’s name. Typing on a phone! Kristin

  8. June 17, 2013 at 12:10 pm | permalink

    Re MFCI, I found some documents on the county website from prior years which Axe wrote, identifying himself as the chairman of MFCI. Perhaps there was a reorganization after that (the one I happened on was 2008).

  9. By Susan Beecher
    June 17, 2013 at 9:49 pm | permalink

    I am not sure why the commissioners are saying they don’t need any more office space when they are planning to move some departments, e.g. the Information Technology part of Infrastructure Management Department and the Public Defender’s Office to leased space.