County Wraps Up 2013 with PACE Initiative

Washtenaw County board of commissioners meeting (Dec. 4, 2013): At their final meeting of 2013, commissioners spent most of the time discussing a proposal to create a countywide Property Assessed Clean Energy (PACE) program.

They ultimately gave initial approval to a notice of intent to form a PACE program. If created, the program would allow commercial property owners in Washtenaw County to fund energy improvements by securing financing from lenders and repaying the loan through voluntary special assessments.

The county’s proposal entails joining the Lean & Green Michigan coalition and contracting with Levin Energy Partners to manage the PACE program. Andy Levin, who’s spearheading the PACE program statewide through Lean & Green, was on hand during the Dec. 4 meeting to field questions. Levin – son of U.S. Rep. Sandy Levin and nephew of U.S. Sen. Carl Levin – was head of the Michigan Dept. of Energy, Labor & Economic Growth (DELEG) during Gov. Jennifer Granholm’s administration, when the PACE legislation was enacted.

Also attending the Dec. 4 meeting was state Sen. Rebekah Warren (D-District 18), who spoke briefly during public commentary to support the county’s initiative. She was instrumental in passing the state enabling legislation to allow such programs in Michigan. Warren is married to county commissioner Conan Smith, a co-founder of the Southeast Michigan Regional Energy Office, which is a partner in Lean & Green Michigan.

A final vote on the notice of intent is now scheduled for the board’s first meeting next year – on Jan. 8, 2014. A public hearing on this issue has been set for the board’s Jan. 22 meeting. That’s because the board would need to take an additional vote to actually create the PACE district. No date for that vote to create the district has been set.

In other action, commissioners accepted a $150,000 state grant to establish the Washtenaw County Trial Court’s Peacemaking Court. Timothy Connors, a 22nd circuit court judge who’s leading this initiative, attended the Dec. 4 meeting and told the board that this project will explore and determine what, if any, tribal court philosophies or procedures might have applicability in Michigan’s courts. Participation in the peacemaking court will be voluntary.

The board also made a raft of appointments, including appointing the county’s water resources commissioner, Evan Pratt, as director of public works. That vote came over dissent from commissioner Rolland Sizemore Jr. The board of public works had raised a question about the appointment’s potential conflict-of-interest, given that Pratt holds an elected office as water resources commissioner. The county’s corporation counsel, Curtis Hedger, prepared a legal opinion on the issue, stating that the appointment would not be prohibited by the state’s Incompatible Public Offices Act.

No appointment was made to the southeast Michigan Regional Transit Authority (RTA). Richard Murphy – one of two RTA board members from Washtenaw County – is not seeking reappointment. During the Dec. 4 meeting, board chair Yousef Rabhi indicated that there’s some uncertainty about when Murphy’s one-year term actually ends, and he was sorting that out with state and RTA officials. Because RTA board members weren’t sworn in until April of 2013, some state and RTA officials believe the term extends until April – even though appointments for Washtenaw County’s two slots were made by the previous county board chair, Conan Smith, in late 2012.

The application process is still open for the RTA, with a new deadline of Jan. 12. That same deadline applies to openings on the county’s food policy council and parks & recreation commission. Applicants can submit material online, or get more information by contacting the county clerk’s office at 734-222-6655 or appointments@ewashtenaw.org.

Countywide PACE Program

On Dec. 4, commissioners were asked to take an initial step to create a countywide Property Assessed Clean Energy (PACE) program.

The goal of PACE is to help commercial property owners finance energy improvements by securing financing from lenders and repaying the loan through voluntary special assessments. In Michigan, the legislation that enables this approach (Public Act 210) was enacted in late 2010, at the end of Democratic Gov. Jennifer Granholm’s last term in office.

The proposal being considered by the county entails joining the Lean & Green Michigan coalition and contracting with Levin Energy Partners to manage the PACE program. Andy Levin, who’s spearheading the PACE program statewide through Lean & Green, was on hand during the Dec. 4 meeting to field questions. He described his role as “matchmaker,” helping the property owners find energy contractors and lenders.

The law firm of Miller, Canfield, Paddock & Stone is a partner in Lean & Green, and would act as legal counsel for any deal done through the county’s PACE program. Several other counties are part of Lean & Green, according to the group’s website. Other partners listed on the site include the Southeast Michigan Regional Energy Office, which was co-founded by county commissioner Conan Smith. Smith is married to State Sen. Rebekah Warren, who also spoke briefly during public commentary on Dec. 4 to support the initiative. She was instrumental in passing the state enabling legislation to allow such programs in Michigan.

The city of Ann Arbor was one of the first Michigan communities to establish a PACE program, which it did in 2011. The city used a federal grant that paid for the nonprofit Clean Energy Coalition to develop the city’s program. Its first projects moved forward earlier this year, when the city sold over $500,000 in PACE bonds through Ann Arbor State Bank, making it the first city in Michigan to complete a PACE bond sale. The financing funded projects at four locations: Arrowwood Hills Cooperative Housing, Big Boy Restaurant, the Goodyear Building, and Kerrytown Market & Shops.

The county’s PACE program would differ from the one set up by the city of Ann Arbor – which created a loan loss pool to reduce interest rates for participating property owners by covering a portion of delinquent or defaulted payments. Washtenaw County does not plan to set up its own loan loss reserve, and no county funds would be used for the program, according to Levin.

However, a reserve fund is mentioned in documentation that describes the program:

8. Reserve Fund

In the event Washtenaw County decides to issue bonds to provide financing for a PACE Program, Washtenaw County can determine at that time to fund a bond reserve account from any legally available funds, including funds from the proceeds of bonds.

By participating in LAGM [Lean & Green Michigan], Washtenaw County assists its constituent property owners in taking advantage of any and all appropriate loan loss reserve and gap financing programs of the Michigan Economic Development Corporation (“MEDC”). Such financing mechanism can similarly be used to finance a reserve fund.

[.pdf of PACE program documentation] [.pdf of PACE cover memo] [.pdf PACE resolution]

Commissioners discussed the topic for about an hour, with most of that time centered on questions they asked of Levin.

The state statute requires a three-step process to create a PACE program. On Dec. 4, the board was being asked to take the first step – approving a resolution of intent to notify the public that the board intends to move forward with creating a PACE district. The statute lays out the information that the county must include in notifying the public – including different types of financing options.

The next step would be to hold a public hearing. The final step would be a resolution that actually creates the countywide PACE district. That last step would likely come before the board in late January or early February.

Countywide PACE Program: Public Commentary

Rebekah Warren, an Ann Arbor resident and state senator (D-District 18), spoke during public commentary. She said she was there to lend support to the resolution regarding PACE. She noted that she had introduced the bill when she served in the state House of Representatives, and helped shepherd it through in a bipartisan package of bills that passed the Democratic-controlled House and Republican-controlled Senate at the time. Jeff Irwin, who served on the Washtenaw County board of commissioners then, also helped advocate for the legislation, she said. [Irwin, also an Ann Arbor Democrat, was subsequently elected to the state House of Representatives, representing District 53.]

Warren described energy efficiency as a “little forgotten piece of our energy work.” It’s “not quite as sexy as some other things we do,” she said, “but the cheapest energy form out there is energy never used.” So why don’t more people invest in energy-efficiency improvements? It’s expensive on the front end, Warren noted, and sometimes the paybacks are long, so people need help with the financing.

Such improvements are great for the environment, Warren said. The more that people can rely on renewable energy sources, the better it is for the planet. It’s also great for property values, she argued – energy-efficiency upgrades to commercial or residential properties makes them more attractive for resale. It also helps the financial bottom line for homeowners and businesses. It’s a win-win for the community, for citizens, and for the planet, she said.

The PACE program in Michigan was born in Washtenaw County, Warren noted, and it would be fantastic to see the county board move forward on this policy to do the kind of work that needs to be done here. She said she’d be happy to make herself available as a resource, and to support the program as it moves forward.

In responding to Warren’s commentary, commissioner Conan Smith (D-District 9) – who is married to Warren – said he was excited that the board would be considering the first step in establishing a PACE program. He noted that the board wouldn’t be creating the program that night, but rather would be voting on a resolution of intent to tell the public that they were considering such a program. He said he would have preferred a faster process than what the legislation laid out.

Countywide PACE Program: Board Discussion – How It Works

Conan Smith (D-District 9) began the discussion by apologizing for not attending the board’s Nov. 7 working session that included a briefing on the PACE program. He hoped that everyone’s questions would get answered, and he hoped to get board approval at both the initial ways & means meeting and at the regular board meeting that same night. [Typically, a resolution is given initial approval at a ways & means meeting, then is moved to the board agenda two weeks later. In December, however, there was only one meeting scheduled.] He said that the resolution of intent doesn’t obligate the county to do anything. “It just starts the process,” he said.

Smith suggested setting a public hearing for a board meeting in January 2014. That would give the public ample opportunity to read through the program before giving feedback, he said. Then the board could take action to actually create the PACE program at its meeting in early February. It’s a long timeline to get the program going, Smith said. There’s some urgency, he added, because there’s a property owner in Washtenaw County who wants to do a substantial project that could cost millions of dollars and create up to 20 jobs. It’s a project that’s in his Ann Arbor district, Smith noted, and he hoped to get that kind of economic activity moving.

He again asked the board to pass both the initial and final approval for the resolution of intent that night, then get into the “meaty debate on public policy in January and February.”

Alicia Ping (R-District 3) said in concept it seemed like a good thing. But she questioned one of the resolved clauses:

3. The Board of Commissioners formally states its intention to provide a property owner based method of financing and funds for energy projects, including from the sale of bonds or notes which shall not be a general obligation of the County, amounts advanced by the County from any other source permitted by law, or from owner-arranged financing from a commercial lender, which funds and financing shall be secured and repaid by assessments on the property benefited, with the agreement of the record owners, such that no County moneys, general County taxes or County credit of any kind whatsoever shall be pledged, committed or used in connection with any project as required by and subject to Act 270.

It seemed to be stating that the county would help finance projects, she said, but also that no county money would be used to do that. If it’s such a great program, she asked, why would the county have to put up any money?

Conan Smith responded, explaining that the county doesn’t need to put up any money for this program, although it could. He noted that the city of Ann Arbor decided to use some taxpayer dollars for its program, but it’s not necessary for the county to do that.

By way of background, the Ann Arbor city council created a PACE program and established an energy financing district over two years ago, at its Oct. 3, 2011 meeting. Several months earlier – in March 2011 – the council had voted to set up a $432,800 loan loss reserve fund to support the program, using an Energy Efficiency and Conservation Block Grant (EECBG) awarded to the city by the U.S. Department of Energy.

C. Smith said that ideally, institutions like the county government can set up a program to be supportive of third-party financing – making sure that banks and credit unions are participating. He described how the program would work if he owned a business. He’d go to a bank to get financing for an energy efficiency project. Instead of refinancing his mortgage to do it, one option would be to go through the PACE program. It allows the business owner, the lender, and the county to enter into a contractual agreement. If the business owner pays the lender, the county isn’t involved. But if the business owner doesn’t pay, then the county starts its normal foreclosure process, C. Smith said. So it’s really just using the county’s foreclosure process to secure the business owner’s loan, he said, and no county dollars are involved.

In that case, Ping replied, why couldn’t the lender start the foreclosure process instead?

Andy Levin of Lean & Green Michigan explained that the language in the board’s resolution, which Ping had highlighted, mirrors exactly the language in the state enabling legislation – that’s why it’s included. But the mechanism that people are using is private lending, he said.

Energy efficiency improvements require an upfront investment that results in a payoff, he explained, but it typically takes several years to break even. Commercial loans are usually for a shorter period than the break-even point of such investments, Levin said, and that’s the problem that PACE sets out to solve.

The program draws on the special assessment power that each local unit of government holds. That way, the lender is the beneficiary of a property tax obligation. That’s different from a typical loan, in that it must be repaid before any other commercial loan. More significantly, he said, it runs with the land. So if the property is sold, the new owner is responsible for the PACE loan obligation. In turn, that means that the lenders are willing to make longer-term loans related to the useful life of the energy improvements – typically 10-20 years.

Levin pointed out that since 2008, PACE has been adopted by 31 states and the District of Columbia. And the states that are adopting this program aren’t just the stereotype “blue” states you might assume, he noted. The most recent state to adopt PACE was Texas, signed into law by Republican Gov. Rick Perry. “It’s totally apolitical – it just works for business,” Levin said.

A typical lender doesn’t have the risk profile or ability to make a loan like this for 20 years, Levin said, so a lot of lenders for energy improvements are private equity companies. There are three funds that exist for no other purpose than to make PACE loans, he said, and they’re all in Michigan.

Ping then asked about what happens when the property is sold, but the new owner isn’t a good credit risk. Does someone else have to approve the transfer of the PACE loan, given that it runs with the property? No, Levin replied – the PACE lender would not have any power over that sale.

The reason that lenders offer PACE loans is that it’s a long-term, secured, debt-based investment, Levin said. A lot of big organizations – like pension funds and insurance companies – need to have that kind of investment in their portfolios. And ultimately, the property is the collateral, he noted.

Andy LaBarre (D-District 7) thanked Levin and asked him to thank Levin’s dad for the work he does in D.C. [Levin's father is U.S. Rep. Sandy Levin and his uncle is U.S. Sen. Carl Levin.]

LaBarre wondered what would be the worst possible scenario for Washtenaw County, under the program. Levin described a scenario in which a PACE loan is made for a property, but then the property owner defaults and goes into foreclosure, and the property can’t be sold or is sold for less than the taxes owed. The PACE lien is equal to any other taxes owed on the property, Levin explained. That’s the only way any government entity could lose money, he said.

LaBarre wondered if Levin was seeing success with the program in Michigan. Were mainstream lenders participating, or just boutique investors? Levin described Michigan as an “infant” regarding PACE. So far, four counties and two cities had joined Lean & Green Michigan, he said. [The website lists the counties of Huron, Ingham, Macomb and Saginaw, and the cities of Rochester Hills and Southfield. The following day, on Dec. 5, the Wayne County commission voted to create a PACE program and join Lean & Green Michigan.]

Nationally, the PACE market has been roughly doubling every year, Levin said, and he projected that 2014 would be “the breakout year.” The biggest deal so far was for a Century City Hilton in Los Angeles, he said. In Michigan, a project in Southfield is getting consent for a PACE loan from Comerica, which holds the property’s mortgage, Levin said. He described it as a big step, because the lender who holds the mortgage on a property must give consent “or we cannot do the project.” That is a requirement of Michigan’s PACE legislation, which he said he fully supports.

Rolland Sizemore Jr. (D-District 5) wanted Levin to provide examples from other counties – “the good stuff and the bad stuff.” Levin replied that he couldn’t yet provide examples from Michigan, but he could bring examples from other states.

Felicia Brabec (D-District 4) pointed to the cover memo statement that indicated the contractor doing work on any PACE project of $250,000 or higher must guarantee the energy saving on that project. How is that possible? she asked. Levin replied that the state statute doesn’t specify how that’s done, but just states that it must be done. It was put into the legislation by large companies like Johnson Controls and Siemens because that’s a guarantee they can make, he added, and they thought it would give them a competitive advantage over smaller firms. The guarantee is usually based on an energy audit. If the energy company doing the work doesn’t have the wherewithal to guarantee the energy savings, it would have to get insurance to cover that, Levin said.

Responding to another question from Brabec, Levin said that legally, the county is creating a countywide PACE district. So a company based in Wayne County couldn’t use Washtenaw County’s PACE program. But by joining Lean & Green Michigan, all of the local governments participating in Lean & Green would be using the same processes and application, he said. So if a company has multiple properties throughout Michigan, the company would have just one process to follow if it worked through Lean & Green Michigan. That’s the advantage of local governments joining the Lean & Green coalition, he said.

Countywide PACE Program: Board Discussion – Ann Arbor’s PACE

Yousef Rabhi (D-District 8) asked how the city of Ann Arbor handles the administration of its PACE program. Levin called it an “open question.” The city had paid a private nonprofit to create and run its PACE program, Levin explained, but that contract ended in March of 2013. Levin contrasted that program with Lean & Green Michigan, saying that Lean & Green is a market model as opposed to a publicly-funded program.

Conan Smith further explained that the city had hired the nonprofit Clean Energy Coalition to create the PACE program, saying that no one else had done it in the state before that. It was anticipated that a lot of the CEC’s work – including legal documentation – would be leveraged by other communities across Michigan to build their own programs, he said. The city used federal grant funding to pay for CEC’s work, Smith added. He noted that CEC itself had been created by the city. It was previously called the city’s Clean Cities program before spinning off into a separate entity, he said, so there’s been a long relationship between CEC and the city.

By way of additional background, Matt Naud – the city’s environmental coordinator – told The Chronicle during a phone interview that the city doesn’t currently have the same level of staffing for its PACE program that it did during the CEC contract. However, Nate Geisler was recently hired as a full-time employee to staff the city’s energy program, and Naud indicated that Geisler would likely be working on PACE as part of that job.

So far, there has been one round of financing through the city’s PACE program. At its Feb. 19, 2013 meeting, the city council authorized issuing up to $1 million in PACE bonds, to be secured through special assessment revenues and the city’s reserve fund. The city ultimately sold $560,000 in PACE bonds through Ann Arbor State Bank and was the first city in Michigan to complete a PACE bond sale. The money funded projects at four locations: Arrowwood Hills Cooperative Housing, Big Boy Restaurant, the Goodyear Building, and Kerrytown Market & Shops. A fifth project – at the building on South State where Bivouac is located – was planned, but ultimately fell through, because the building’s owner would not sign off on the project, according to Naud. He reported that all the projects are completed except for the work at Arrowwood.

Some of the differences between the city’s approach and the one proposed by Levin relate to timing and interest rates. Naud noted that there are no administrative fees for the city, and interest rates are lower than what Lean & Green Michigan projects will likely secure on the commercial market. According to a press release issued by the city earlier this year, property owners involved in Ann Arbor’s first round of PACE financing have 10 years to repay PACE assessments at 4.75% interest.

Related to timing, Naud noted that because the city deals with smaller projects, it might take more time to line up enough projects to bundle into a bond offering.

Naud said he didn’t foresee that the city would end its PACE program unless a decision were made to not spend any staff time on it. He noted that there are strong economic development arguments to be made for energy-efficiency improvements that PACE supports, and that it also helps achieve goals in the city’s climate action plan, which calls for an 8% reduction in greenhouse gas emissions by 2015, compared to 2000 levels.

During the county board’s deliberations on Dec. 4, Brabec asked whether an Ann Arbor company would need to use the Ann Arbor PACE district or the county’s. Levin replied that it would be the company’s choice. Levin said that if a company’s project is over $350,000, it couldn’t go through Ann Arbor’s PACE program because the city can’t accommodate larger projects. He said he was totally supportive of Ann Arbor’s PACE program, and called the city a pioneer in the effort.

However, Levin said it’s impractical for every city and township to create its own PACE program. It makes more sense for the county to do it, he said.

Countywide PACE Program: Board Discussion – Other Administrators?

LaBarre said he’s spoken about this program with the county treasurer [Catherine McClary]. He said she seemed supportive, although she wanted to know more about it. He asked for Levin to describe the process for a business owner who was interested in the PACE program. Would they talk to the county, or to Levin’s organization, or a bank?

Levin explained that if the county decides to create a PACE program by joining Lean & Green Michigan, then Levin would become the county’s PACE administrator. Most local governments in Michigan don’t have the money to hire new staff to handle the administration, he noted. The only thing that the county does is to have a designated official who signs the special assessment agreements with property owners.

A property owner would come to Lean & Green Michigan, Levin said – there’s an application on its website. He noted that a mall owner in Ann Arbor who’s interested in PACE found out about it because an executive met Levin at a national PACE retreat. The company doesn’t want to use the city of Ann Arbor’s PACE program, he said, because the project is too big for the city and the company doesn’t want to use public funds. That property owner would have the ability to approach Lean & Green Michigan with everything in order, he said, including the energy audit and financing.

But smaller property owners might not have that ability. So part of his role is to “play matchmaker,” Levin said, helping the property owner find an energy contractor and a lender.

Kent Martinez-Kratz (D-District 1) asked about the administrative fees that Levin would be charging. Levin replied that the fees for Miller Canfield, the law firm that’s a partner in this venture, would vary depending on the deal. It could range from a few thousand dollars to tens of thousands, depending on the size of the project. The fees for his firm, Levin Energy Partners, are generally 2% of the deal upfront.

Yousef Rabhi followed up on that question, asking for more details about how Levin would get paid. Levin clarified that his fees could be paid by the contractor, or it could be part of the closing costs. He noted that other costs associated with the project include a mandatory energy audit. The statute also requires a plan for ongoing monitoring and verification of those energy improvements.

Levin explained that the point of setting up Lean & Green Michigan was as an alternative to each local government paying a substantial amount of money to create and run its own PACE program. Taxpayers shouldn’t pay anything, and the entire process can be market-driven, Levin said.

Rabhi asked whether the program that Levin is proposing for Washtenaw County means that anyone who wants to do a PACE project through the county must work with Levin’s firm. Yes, Levin said. The county would be naming Levin as the third-party administrator for its PACE program. Levin pointed out that the county could actually create multiple PACE programs, if it wanted to. The county board can also end the program at any time, he said.

Rabhi asked if there are other options for entities to administer the county’s PACE program. Not in Michigan, Levin said. He described himself as part of a “brother and sisterhood of PACE pioneers” – about 30-40 people nationwide. Levin noted that he was head of the Michigan Dept. of Energy, Labor & Economic Growth (DELEG) during Gov. Jennifer Granholm’s administration, when the PACE legislation was enacted.

When he left that position, he realized there was an issue with administering the program, because local governments don’t want to pay for administering their own PACE program or issue bonds that would be paid off through a special assessment. He also talked with representatives from large corporations, who told him that they weren’t interested in dealing with different rules and regulations that would be set up if each local government had its own PACE program.

That’s what led him to the idea of having one statewide PACE market, Levin said, and that’s why he created Lean & Green Michigan. Any county or city can join for free, he said, and after that, the local governments don’t have to do much. Every deal involves a property owner, an energy contractor and a lender. All three of those parties prefer the idea of one big Michigan market, instead of a lot of smaller programs, he said.

Indicating that he hoped Levin wouldn’t take offense, Rabhi said it was important to review all of the county’s options and ensure that they were proceeding in the right way.

Levin replied that “it’s a huge entrepreneurial risk on my part, I mean, to be honest.” He’s doing a lot of setup that could take years, Levin said, and until projects start coming in, there’s no funding. “Not many people are willing to do that.”

Conan Smith told Rabhi that the short answer to the question of whether there is some other provider besides Lean & Green is “No.” Essentially, Lean & Green Michigan is a sole source provider of this service in the state, he said. As evidence, he pointed to an RFP (request for proposals) process that Wayne County undertook for a PACE administrator. There was one response, he said – from Lean & Green Michigan. “No one else wants to do this work,” Smith said. Washtenaw County could go through that same RFP process, he added, but he didn’t think there was anyone else who would respond.

In response to another query from Rabhi, Levin said that Lean & Green Michigan is the name of a program that Levin Energy Partners administers. He considers the Miller Canfield law firm to be an important partner too. Rabhi asked if the county was locking itself into using Miller Canfield on the legal side, under this proposal. Yes, Levin replied, to the extent that any outside counsel is needed.

Levin said he’s not just looking to get some energy projects done. “I’m looking at how Michigan can be the most innovative state in driving down the costs of these projects for property owners.”

Ronnie Peterson said he’d be supporting this proposal. It’s similar to other partnerships the county has in order to provide services to citizens, he said, giving Ann Arbor SPARK as an example. [SPARK is a nonprofit entity that provides economic development services, and receives appropriations from the county to help support that work.] Peterson said it didn’t cost the county one dime, and it will help Washtenaw County businesses function in a changing climate. The county can opt out of its arrangement with Levin at any time, he noted.

Peterson said he knew Levin on a personal basis, and that as a Harvard Law School graduate, Levin had more options than taking on this program. Peterson said he was grateful that Levin is giving back to the state with his talents and relationships that he’s built over the years. “I trust Andy Levin, and that does make a difference to me,” Peterson said.

Countywide PACE Program: Board Discussion – Next Steps

Rolland Sizemore Jr. asked whether it would be a “done deal” if commissioners approved the proposal at their board meeting that night, following the ways & means meeting. If not, why were commissioners pushing it through to be voted on at the board meeting?

Curtis Hedger, the county’s corporation counsel, explained that the state statute requires a three-step process to create a PACE program. The board is being asked to take the first step – approving a resolution of intent. It notifies the public that the board intends to move forward with creating a PACE district. The statute lays out the information that the county must include in notifying the public – including different types of financing.

The next step would be to hold a public hearing. The last and most important step, Hedger explained, will be a resolution that actually creates the countywide PACE district. That would likely come before the board in late January or early February, he said.

Sizemore asked if there was a way to stipulate that labor for these projects would come from the county. Ronnie Peterson replied that Andy Levin is very respected in the labor community, and had been involved with the AFL-CIO on a national level. Sizemore said he didn’t need an answer that night, but it was an important issue that he wanted to address.

Conan Smith offered an amendment to the resolution, to set a public hearing on the proposal for Jan. 22.

Outcome on Smith’s amendment: On a voice vote, commissioners passed the amendment to set the public hearing date for Jan. 22. Rolland Sizemore Jr. dissented.

The board then discussed whether to take both an initial vote that night at its ways & means committee meeting, plus a final vote at the board meeting immediately following it that same night. [Typically, items receive initial approval at ways & means, then are brought to the regular board meeting two weeks later. However, there was only one board meeting in December – on Dec. 4.]

Yousef Rabhi wondered why the board couldn’t take a final vote at its first meeting in 2014, on Jan. 8. He noted that commissioners could still hold the public hearing on Jan. 22. Conan Smith noted that the first meeting of the year typically includes only organizational items, like officer elections, but he supported doing regular business then, too.

Ronnie Peterson didn’t have a problem giving the item final approval later that night, noting that the proposal doesn’t cost the county any money. Felicia Brabec pointed out that some commissioners had additional questions, and that it wouldn’t change the timeline to have a final vote for the notice of intent on Jan. 8, given that the hearing was already set for Jan. 22.

Outcome: Commissioners unanimously gave initial approval to a notice of intent to form a PACE district. A final vote on the notice of intent is expected on Jan. 8, with a public hearing on Jan. 22. A vote to establish the PACE district itself will come in late January or early February.

Peacemaking Court

At their Dec. 4 meeting, commissioners were asked to authorize acceptance of a $150,000 grant to establish the Washtenaw County Trial Court’s Peacemaking Court. The grant, awarded by the State Court Administrator’s Office, is for funding from Oct. 1, 2013 through Sept. 30, 2014.

The state grants are intended to support creative approaches in the court system. The Peacemaking Court is described in a staff memo:

Like tribal peacemaking programs and restorative justice programs, the Peacemaking Court will provide a great benefit to youth and the community in juvenile cases by reducing recidivism and giving youth a diversionary option to avoid a record that can preclude future educational and employment opportunities. Domestic relations and other family cases will benefit from more durable and tailored solutions that result from a clearer understanding of the different perspectives or “truths” of all those involved. This, in turn, will enable the healing of important relationships, in contrast to the harm and polarization that too often results for families through the adversarial process.

The Peacemaking Court will allow the parties and those most affected by the conflict to talk about the event, its impact on them, and to look at the whole conflict in a comprehensive context that leads to understanding and meaningful solutions that address the needs of all those involved. When participants are respected and the individuals responsible for causing the problem are part of the decision process and take responsibility for their actions in a meaningful way, the resolutions are more comprehensive and address the needs of everyone involved, as well as the issues that underlie the problem. An important difference between the traditional system and the peacemaking court process is that the resolution is determined WITH the court not BY the court.

Key members involved in this project are 22nd Circuit Court judge Timothy Connors, 14A District Court judge Cedric Simpson, project director Susan Butterwick, and Robert Carbeck, who is 22nd Circuit Court deputy court administrator and budget director. [.pdf of grant application]

Connors, who has spearheaded this initiative, was on hand at the Dec. 4 meeting to describe the project and answer questions. Carbeck also attended but did not formally address the board.

Peacemaking Court: Board Discussion

Ronnie Peterson (D-District 6) invited judge Timothy Connors to the podium to describe the grant.

Connors said he knew commissioners wanted to know about funding. He told them the program not only doesn’t cost anything for the county, but it’s money coming in from the state. The only role for the county would be in administering the funds, he said.

The grant is to explore and determine what, if any, tribal court philosophies or procedures might have applicability in Michigan’s courts, Connors explained. These are things that can be borrowed from the more than 500 tribal nations across the country, he noted, including some of the tribal courts in Michigan that are leaders in the country. He’s been working with these courts and came to the conclusion that there’s a lot to learn.

Peacemaking courts are being held overseas, most notably by two communities in England, Connors reported, saying he’s met with representatives from those communities. Their approach is borrowed from New Zealand’s indigenous culture.

Connors noted that a lot of this work is based on South Africa’s Truth and Reconciliation Commission hearings held during Nelson Mandela’s presidency. “So I can’t imagine anybody really being threatened by it,” he said. Only people who want to participate will use this approach, he explained – saying it’s not imposed on anyone. It’s designed to offer an alternative way to resolve differences. After 23 years on the bench, he said, he’s learned that the court system often addresses the symptom, but seldom talks about the disease.

Judge Cedric Simpson will be participating from the 14A District Court. Connors said the approach is already being offered in the domestic relations and family court, and there’s interest in it from business-related cases and in the probate court. “It is my commitment to spend the rest of my career with you working and trying to do the best I can in my final 11 years,” he said. [Judges are elected to six-year terms, and Connors' current term expires in January 2019. He was likely referring to the statutory age limit – judges must be under 70 years old at the time of their election.] Connors said he hoped the county took advantage of the grant, and that he’d keep the board informed of the educational sessions that will be held about the peacemaking court.

Conan Smith (D-District 9) thanked Connors for his work. He said he’s been involved in alternative dispute resolution with the court, and was a small claims mediator, so “I know the power that conversations can have.” Learning from what other cultures have done is a great idea, Smith said, and he’s proud of the county and grateful to Connors and the team that pulled this together.

Yousef Rabhi (D-District 8) echoed those sentiments, saying he was glad to have a small role in this project. Ronnie Peterson (D-District 6) also thanked Connors, and recalled a conversation they’d had recently about former judge Francis O’Brien. Peterson noted that O’Brien had been well-known across the state and country for advanced programs and treatment models for juveniles. He was pleased to see that Connors was making sure that the legacy of O’Brien continued.

Peterson also said he was pleased that the wall between the county board and the court is coming down. He hoped the dialogue would result in additional innovative programs, but he joked that the initiative had to come from the judges: “We dare not to mess with you in robes, because of the power that you possess,” Peterson quipped.

Connors responded, saying he didn’t see those walls and that such walls between the county administration and the court would be “ridiculous.” He said he intended to involve the county’s detention center in the decision-making, and indicated that the goal for everyone is to help the children.

Infrastructure Projects

Two infrastructure projects – in Dexter Township and Freedom Township – were on the board’s Dec. 4 agenda for approval.

The board was asked to authorize issuing up to $460,000 in bonds for the Copper Meadows drain project in Dexter Township, northwest of Ann Arbor. The drain is located in the Copper Meadows subdivision off of North Territorial Road, near the Dexter town hall. The bonds would be repaid with special assessments on Dexter Township, Washtenaw County, and property owners in the drainage district. The first assessment would be levied in December 2014. [.pdf of staff memo on Copper Meadows project]

The board also was asked to pass a resolution that directs the county’s board of public works to undertake a lake improvement project at Pleasant Lake in Freedom Township, located southwest of Ann Arbor. The township’s board of trustees has passed a resolution asking for the county’s assistance in implementing and financing of a project to control invasive and nuisance species at the lake. The proposed five-year project would require special assessments on property owners that would benefit from the work.

Outcome: Both infrastructure projects received unanimous final approval by the board.

Appointments

Over 30 appointments to various county boards, committees and commissions were on the Dec. 4 agenda for approval. [.pdf of appointments]

Board chair Yousef Rabhi (D-District 8) read aloud his list of nominations, making a few additional comments along the way. He noted that an application for an opening on the agricultural lands preservation advisory committee had been received after the deadline, so he’d be bringing a nomination forward in January for that.

There were several unfilled positions on the local emergency planning committee, he noted, for slots that require certain types of representation – to represent hospitals, agriculture, and several other specific areas, for example. In total, the county needed to fill 23 positions, but only nine nominations were brought forward on Dec. 4.

An opening on the Washtenaw County parks & recreation commission that resulted from the retirement this month of long-time commissioner Nelson Meade will not be immediately filled, to allow for the opening to be publicized.

Openings for most positions had been publicized in October and November. An appointments caucus was held on Nov. 21 to discuss the openings and applications. That caucus drew only two commissioners, however – Rabhi and Conan Smith (D-District 9), who both represent districts in Ann Arbor.

The deadline had been extended until Dec. 1 for openings on three entities: the southeast Michigan Regional Transit Authority (RTA); the Washtenaw County historic district commission; and the Washtenaw County food policy council. As a result of the extension, additional positions were filled on the HDC (Alec Jerome) and the food policy council (Markell Miller and Caitlin Joseph).

Also, no appointment was made to the RTA. Richard Murphy – one of two RTA board members from Washtenaw County – is not seeking reappointment. During the Dec. 4 meeting, board chair Yousef Rabhi indicated that there’s some uncertainty about when Murphy’s one-year term actually ends, and that needs to be sorted out with state and RTA officials. Because RTA board members weren’t sworn in until April of 2013, some state and RTA officials believe the term extends until April – even though appointments for Washtenaw County’s two slots were made by the previous county board chair, Conan Smith, in late 2012.

Rabhi said he planned to re-open the application process, with a new deadline to be determined, after these issues are clarified.

Outcome: Appointments were approved unanimously.

Later in the month, the application process was re-opened for the RTA, with a new deadline of Jan. 12. That same deadline applies to openings on the county’s food policy council and parks & recreation commission. Applicants can submit material online, or get more information by contacting Peter Simms of the county clerk’s office at 734-222-6655 or appointments@ewashtenaw.org.

Appointments: Director of Public Works

In addition to the other appointments, the board was asked to appoint Evan Pratt, the county’s water resources commissioner, as director of public works, effective Jan. 1, 2014. The current director of public works is Daniel R. Myers. According to a staff memo, the board of public works had raised a question about potential conflict-of-interest with this appointment. From the memo:

Since Evan is currently the elected Water Resources Commissioner for the County, the Board of Public Works wanted to assure themselves that it was not a conflict for the person serving as the Water Resources Commissioner to also be appointed the Director of Public Works. With the assistance of Corporation Counsel they researched this issue and it was determined that it would not be a conflict of interest. Additionally, the current organizational structure of Public Works places the Director under the management direction of the Water Resources Commissioner so there is already direct involvement in Director of Public Works activities. [.pdf of corporation counsel opinion]

Earlier this year, Dan Smith (R-District 2) had asked the corporation counsel, Curtis Hedger, to weigh in on a separate issue – about the constitutionality of levying taxes based on pre-Headlee state laws. During deliberations at the board’s Oct. 16, 2013 meeting, Hedger said he would never put a legal opinion in a cover memo unless he’s directed by the board to do so. The board is his client – not individual commissioners, he told them, adding that he writes legal opinions under the board’s direction.

In the case of the opinion produced for the appointment of Pratt, Hedger indicated that the board leadership had asked for the opinion, on behalf of the entire board, as did the county administrator and the outgoing public works director.

Outcome: The appointment was approved on an 8-1 vote, over dissent from Rolland Sizemore Jr. He did not publicly state his reason for voting against this appointment.

Recognitions

Commissioners voted on resolutions of appreciation at their Dec. 4 meeting to honor two men who have served the county for decades: Dick Fleece and Nelson Meade.

Fleece has worked for the county for 38 years in the field of public and environmental health, and is retiring at the end of 2013. He was appointed the county’s environmental health director in 1994, and has served as the health officer since 2009. [.pdf of resolution of appreciation for Fleece] Fleece received a standing ovation from commissioners and staff.

At the county board’s Nov. 6, 2013 meeting, commissioners had appointed Ellen Rabinowitz as interim health officer.

Also on Dec. 4, commissioners honored Nelson Meade, who is stepping down from the Washtenaw County parks & recreation commission after serving for over 40 years. [.pdf of resolution of appreciation for Meade] He was an administrator at the University of Michigan’s School of Public Health and had served in various roles in city government, including two terms on the Ann Arbor city council. His departure from WCPARC was announced at its Nov. 12, 2013 meeting.

Meade did not attend the Dec. 4 meeting, but was given the framed resolution at a reception later in the week. And at the Dec. 10 WCPARC meeting, it was announced that County Farm Park will be renamed in Meade’s honor, as the Nelson Meade County Farm Park. The 141-acre park is located on Ann Arbor’s east side, at the southwest corner of Washtenaw Avenue and Platt Road.

Outcome: Both resolutions passed unanimously.

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: Public Health

At the board’s Nov. 6, 2013 meeting, Ellen Rabinowitz was appointed as interim health officer for the county, because the county’s current health officer, Dick Fleece, was retiring. As they’d done in the past, at that meeting both Conan Smith (D-District 9) and Ronnie Peterson (D-District 6) advocated for the county to create a board of public health. From The Chronicle’s Nov. 6 meeting report:

Conan Smith (D-District 9) told Rabinowitz that he really wants to see a public health board created. He asked her to report back to the board about what a public health board would mean to the department, and the process required to set it up. Rabinowitz replied that it’s an important issue to explore. The possibility of pulling together a board of experts is something she’s interested in exploring. Peterson said it should be a goal to establish such a board by the end of 2013, because public health advocates who might serve on the board should be involved in selecting a permanent director.

…

Regarding a public health board, Fleece said he’s heard varying opinions. Some people say that such boards require a lot of care and feeding to the extent that the board becomes a burden on staff. In other cases, the board can be an advocate and serve as a good source of information. There will be decisions to make regarding how much authority to give a public health board, he noted.

Fleece also pointed out that the county’s public health department already seeks advice from many sources, including the University of Michigan School of Public Health. He said he’d do everything he can to help with this process.

At the board’s Nov. 20, 2013 meeting, Rabinowitz told commissioners that she’d been working with the county administrator to develop a document that she planned to present to the board on Dec. 4. The document would lay out all the issues that need to be explored in reestablishing the board of public health, she said, including budget impacts, potential composition, and how it would relate to other existing boards.

On Dec. 4, Rabinowitz told the board that she knew Peterson had wanted a resolution on this issue to come forward at that meeting. However, she said she wasn’t ready yet because she’s still doing the due diligence and gathering information that’s needed to reestablish a board of public health. She was meeting the next day with the director of local public health services at the Michigan Dept. of Community Health to sort out why such a board is optional and what authority it would have. She’s also pulling together information about all the different ways that the county’s public health department currently receives public input, “because clearly that is one key role for a board of health,” she said.

Rabinowitz reported that she’ll also be meeting in January with the dean of the University of Michigan School of Public Health and the associate dean for public health practice to get their input. Her intent is to bring forward a resolution in the first quarter of 2014.

Yousef Rabhi (D-District 8) thanked Rabinowitz, saying that he knew she wanted to do what’s best for the county, what’s legal under the state statute, and what’s best in terms of engaging citizens. He noted that the county public health department already works with about 10 different citizen boards and commissions that are working on specific areas, like environmental health. He wanted to look at elevating the voice of people who sometimes don’t have input, and he looked forward to the proposal she’d be bringing forward next year.

Peterson said his desire to have a board of public health would not go away. The county has a parks & recreation commission, a board of public works, a drain board and a road commission, he noted, and a board of public health is just as important. He expected an update from the county administrator in January regarding the status of such a board. He argued that the county board needs to appoint people to a public health board who could advocate on behalf of children and other vulnerable citizens.

Conan Smith said he also was committed to putting a board of public health in place to guide commissioners. However, he added, he also understands the need for time to figure it out and do it right. He didn’t want to delay it with the intention of killing it, but thought it was worthwhile to get it done right.

Rabhi said he didn’t see the additional time as a delaying tactic, and he appreciated the time that staff was putting into it.

On a different topic, Alicia Ping said she hoped Rabinowitz could serve as a resource. Ping had recently received an email from the Saline mayor, reporting that there had been another heroin overdose in that city. The mayor is coordinating a response with the Saline police department and school system, she said, and has asked Ping to reach out to the county to see what resources are available.

Communications & Commentary: Misc. Public Commentary

Thomas Partridge spoke during both opportunities for public commentary during the evening. He introduced himself as a recent candidate for Ann Arbor city council, as well as a previous candidate for other offices. He urged the board to do more for the community’s most disadvantaged residents, finding ways to provide better access to health care, housing, transportation and education. He asked commissioners to work during their vacation period to help those in need. He argued that Gov. Rick Snyder and the state legislature had neglected and bullied the most vulnerable citizens on Michigan, as well as middle-class residents.

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, Jan. 8, 2014 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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