Several variables affecting the county budget are still unknown – including how much, if anything, the county’s labor unions will concede on wages and benefits. In that context, Washtenaw County administrator Bob Guenzel is recommending another 21 job cuts to help balance the 2010 and 2011 budgets. The county faced a projected $30 million deficit over those two years. The job cuts are coupled with several efforts to slash expenses and increase revenues, including a proposed economic development millage that would not require voter approval.
Guenzel will formally submit his recommendations to commissioners at their board meeting next Wednesday, Sept. 16. This is the second phase of cuts. Earlier this year, commissioners approved the elimination of 26 jobs and almost $14 million in expense reductions.
In a memo to the Board of Commissioners posted Friday on the county website, Guenzel made clear that there will be additional, difficult decisions to make – and more jobs could be on the line. He described ongoing labor discussions as cooperative, but said that if no deals are struck by Oct. 16, he’ll need to make additional cuts in other areas. More than 80% of the county’s 1,350 employees are represented by 17 different bargaining units, which have contracts in place through at least 2010.
Further ahead, the county is projecting deficits of $27.5 million over two years in 2012-13, with revenues from property taxes continuing to fall and a huge question of whether the state will re-institute a revenue-sharing commitment in 2013. By 2013, general fund revenues are expected to drop to $90 million, compared to $99 million projected for 2010.
We provide a detailed look at the budget recommendations after the break.
Previously, Guenzel had proposed levying 0.017 mills under legislation known as Act 88, to be used for economic development purposes. The county is permitted to do this without voter approval because Act 88 legislation predates the Headlee Amendment, which put limits on a local government’s ability to raise taxes. Guenzel’s original proposal would have raised $256,000 to be allocated to Ann Arbor SPARK and its Ypsilanti business incubator, SPARK East. Those groups had received a general fund commitment from the county for $200,000 and $50,000 respectively – if the Act 88 revenue can be used instead, that would free up general fund dollars.
In his latest recommendation, Guenzel has more than doubled the proposed millage to 0.04 mills, which would raise $603,000. (The millage would levy $4 for every $100,000 of a property’s taxable value.) The funds would be allocated to these groups:
- Ann Arbor SPARK ($200,000)
- SPARK East ($50,000)
- Eastern Leaders Group ($100,000)
- 4H activities ($60,000)
- Horticulture ($27,000)
- Agricultural Innovation ($15,000)
- Food System Economic Partnership ($15,000)
- Heritage Tourism ($50,000)
- Director of Economic Development and Energy ($87,000)
Jennifer Fike, executive director of the Food System Economic Partnership, had spoken at the board’s August meeting and urged commissioners to consider using Act 88 funds to support agricultural economic development. She did not, however, advocate a higher tax.
The director of economic development and energy would a new position to be filled by Tony VanDerworp, the county’s current director of strategic planning. The strategic planning department is being eliminated, but a new department of economic development & energy is being created in its place. There are seven jobs in strategic planning, including two that are vacant. The new department will employ four people, including VanDerworp, for a net decrease of three jobs.
In addition to restructuring its strategic planning department, the county administration has identified specific cuts in several areas.
Mental Health Services
Non-mandated services in the Community Support and Treatment Services department (CSTS) will take a big hit under the proposed budget recommendations, with cuts of 6.75 jobs and $2.4 million in expenses. This is in addition to $3 million in cuts that the department already made during the first phase of budget reductions earlier this year. But job losses potentially could be even more severe. CSTS has a contract with the Washtenaw Community Health Organization – a partnership between the county and the University of Michigan – to provide vocational training to developmentally disabled residents. If WCHO decides to award that contract to a different agency, CSTS would face the loss of 66.5 additional jobs. [See previous Chronicle coverage of proposed budgets for CSTS and the county's public health budgets, which were discussed at the Sept. 2 board of commissioners meeting.]
Levels of Service for Mandated Programs
The county has proposed eliminating three jobs and $1.7 million in expense reductions from departments responsible for mandated services. The prosecuting attorney’s office, led by Brian Mackie, will lose one position, while two positions will be eliminated from the clerk/register of deeds, led by Larry Kestenbaum. Mackie and Kestenbaum were among the five elected officials who sent a letter to commissioners on Thursday urging them not to make further cuts in mandated services. In addition, the letter proposed putting a millage to fund human services on the November 2010 ballot. The letter was also signed by sheriff Jerry Clayton, treasurer Catherine McClary and Janis Bobrin, the county’s water resources commissioner.
But the main expense reductions in this category come from the Washtenaw County Trial Court, which has agreed to cut $1.2 million from its budget over the next two years. More job losses might occur there, depending on how the court reorganizes to deal with that cut in expenses. The trial court includes juvenile court, probate court, the Friend of the Court program, community corrections, civil/criminal divisions and a range of other functions.
Support Services and Administration
Six positions are recommended to be cut from the county’s support staff, which includes human resources, finance, information technology and facilities. The cuts – which will come primarily through positions that are already vacant, plus planned retirements – are expected to save $750,000. Additionally, one job in administration – the assistant to county administrator for public safety and justice – will be cut to save $118,000.
Two positions in the building inspection program– a mechanical inspector and a customer service specialist – are slated for elimination, with a targeted $285,000 in cost reductions. At one point the county considered eliminating the entire program, because a sharp decline in new construction has reduced demand for those services. Instead, Guenzel is recommending keeping the program, increasing fees, and partnering with the county’s weatherization program – which recently received significant federal stimulus funding. Long-term, the county will also pursue a possible regional partnership with the city of Ann Arbor and other local governments.
Funding for Nonprofits
The county’s support for local nonprofits was an area that generated considerable public angst over the past few months, with advocates for various groups lobbying commissioners to retain funding. Guenzel’s budget recommendation calls for most funding for these groups to be cut 20% in 2010 and another 20% in 2011. Many of the nonprofits that were previously funded directly by the county – in the category of human services and children’s well-being – will now be required to apply for funding through a competitive bid process, administered by the Office of Community Development, a joint county/city of Ann Arbor department. The pool of county funding for that group will be cut from $1.26 million this year to $1.01 million in 2010 and $762,250 in 2011.
Other nonprofits have funds specifically earmarked for their organization, but will also see funding cuts. Support for Safe House Center, for example, will be reduced from $120,000 this year to $72,000 in 2011. Shelter Association funding will drop from $200,000 in 2009 to $120,000 in 2011.
Overall, funding for outside agencies and special initiatives will be cut from a total of $3.64 million this year to $2.5 million in 2011.
Expense Reductions With No Job Cuts
Several areas will see funding cuts, but won’t lose staff. Those include $167,000 from Head Start’s budget, a decrease of $137,000 to the Michigan State University Extension program, and a $160,000 cut in funding to the public health department.
Many Unknowns Remain
One major unknown relates to funding for corrections, which is part of the sheriff’s department. A jail expansion currently under construction will require additional staffing, but it’s unclear to what degree. Guenzel said that discussions are ongoing with sheriff Jerry Clayton – that piece of the budget will be presented to commissioners later in the year. The overall sheriff’s department accounts for 35% of the county’s general fund budget – earlier in the year, Clayton identified $1.5 million in budget reductions.
Other significant uncertainties include the level of concessions that might be accepted by unions representing county workers. State funding levels are also unclear, as the Michigan legislature struggles to deal with its own $2.7 billion budget shortfall for the fiscal year beginning Oct. 1, 2009.
Commissioners will be working with county administration to finalize the budget over the next two months. A public hearing devoted to the issue is tentatively set for Thursday, Oct. 22, with the board expected to adopt the budget at its Nov. 18 meeting.