County Board Moves Ahead on Budget

AFSCME union concessions help, but other issues remain
Washtenaw County's preliminary 2010-2011 budget.

Washtenaw County's preliminary 2010-2011 budget.

Washtenaw County Board of Commissioners meeting (Oct. 7, 2009): Several people arrived early for Wednesday night’s county board meeting, expecting to face the kinds of crowds who’ve packed the county boardroom at recent meetings to plead that funding not be cut for the programs they support as the county battles a projected $30 million deficit.

But seats were plentiful – a comparably light turnout that perhaps reflected two developments: 1) The county’s largest group of unionized workers ratified a deal on Tuesday, giving concessions in 2010 and 2011 that will save the county millions over that two-year period; and 2) an amendment to the proposed budget would restore some of the previously anticipated cuts to human services nonprofits.

The board also gave initial approval – with two commissioners dissenting and a third giving only partial support – to a tax for economic development efforts, which includes support for programs focused on local agriculture. They approved a tax to raise funds for indigent veterans services. And they got an update from Jennifer Watson, the county’s budget manager, who walked commissioners through the roughly three-pound preliminary budget book for 2010-2011. Details on all of this, plus environmental awards and a report from the Huron River Watershed Council, after the jump.

Act 88: Economic Development Millage

This spring, commissioner Ken Schwartz found a state statute – Act 88, enacted before the Headlee Amendement, which limits local taxing authority – that would let the county levy a millage for the purpose of growing jobs and reducing unemployment. Because it was enacted pre-Headlee, it could be approved by the board without a voter referendum.

Initially, the county administration proposed levying 0.017 mills to raise $250,000, using the funds to give $200,000 to Ann Arbor SPARK, the local economic development agency, and $50,000 to SPARK East, its Ypsilanti business incubator. The county had already earmarked those amounts to be paid from the general fund – so shifting it to the Act 88 millage would free up those general fund dollars for other purposes.

Later in the year, county administrator Bob Guenzel increased the amount of 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.) In addition to SPARK and SPARK East, now the millage would also fund the Eastern Leaders Group ($100,000); 4-H activities ($60,000); horticulture/MSU Extension ($27,000); agricultural innovation/MSU Extension ($15,000); the Food System Economic Partnership ($15,000); heritage tourism ($50,000); and the job of director of a newly formed county Economic Development and Energy Department ($87,000). [The department would replace the current Office of Strategic Planning, led by Tony VanDerworp, who would also lead the new department.]

Public commentary: Act 88

During general public commentary at the beginning of the board’s Ways & Means Committee meeting, several people spoke in support of entities that will be funded by Act 88.

Rene Greff, the co-owner of Arbor Brewing Company in Ann Arbor and Corner Brewery in Ypsilanti, spoke on behalf of the Food System Economic Partnership, known as FSEP. A couple of years ago, inspired after reading Michael Pollan’s The Omnivore’s Dilemma, Greff said they decided to overhaul the menus at their restaurants to focus on locally produced food. It’s one thing for a household to decide to “buy local” at the grocery – it’s exponentially more difficult to change how you procure food for a commercial venture, she said. FSEP helped them every step of the way, Greff said, as they started working with dozens of local producers and suppliers. They spend $420,000 on food annually, and now the majority of that money stays in the local community, she said – and that’s just one business. There’s a powerful multiplier effect on the county’s $15,000 investment in FSEP, she concluded.

Ken Siler, president of the Washtenaw County Farm Bureau, was one of several people at Wednesday’s meeting who supported funding for the MSU Extension program in Washtenaw. Siler referred to an email he’d previously sent to commissioners that included a copy of a resolution the local Farm Bureau board had recently passed in support of funding for the extension.

Bill Lawrence of Lawrence Arbor Care said he’d been in the green industry for 35 years, including 28 years as a city forester in Ann Arbor. The MSU Extension provides a valuable resource for local governments as well as private businesses and the general public, he said. Catherine Eavy also supported the MSU Extension, saying that her employer has paid for her to attend classes that the extension offers, which in turn helps the business.

Alice Ralph, a member of the Washtenaw County Historic District Commission, also spoke during public comment. In August, she had written a letter to commissioners outlining how the county’s HDC contributed to economic development, making it eligible for Act 88 funding. [.PDF of letter to commissioners] One example: the county’s status as a “certified local government,” designated by the National Preservation Act amendments of 1980, requires the establishment of an HDC. This designation allows the county to receive certain grants for which it would not otherwise be eligible. On Wednesday, Ralph talked about the history of the HDC and its role within the county, and urged commissioners to find a secure, funded place for the HDC within the county government.

Some additional background: The county’s Office of Strategic Planning has previously provided staff support to the HDC. That’s likely to change. From an Oct. 5, 2009 memo sent from Tony VanDerworp to Bob Guenzel:

Over the past several months, Office of Strategic Planning Staff has spoken with the County Historic District Commission regarding the budget crisis and pending elimination of Planning Services. These conversations have been major agenda items at the July, August, and September 2009 HDC meeting, and have been twice facilitated by BOC Commissioner Conan Smith.

These conversations have made clear to the HDC Commissioners that if Planning is eliminated, that staff support for the HDC will also be eliminated. These conversations with the HDC have also clearly stated that potential Act 88 funding would be used for Economic Development staff. While Economic Development staff may work on heritage tourism projects, all other historic preservation projects will be eliminated.

Staff is presently examining options to continue minimal staff support to the HDC, to maintain our 12 local historic districts, and maintain Certified Local Government status to provide access to historic preservation funds.

Options under consideration include partnership with the EMU Historic Preservation Graduate Program for intern support (a model presently used by the City of Ypsilanti), emulation of the City of Ann Arbor approach, which uses a contract consultant for a small number of hours monthly.

Earlier this year, the Ann Arbor’s city council eliminated funding for the historic district consultancy from its FY 2010 budget, which was one year earlier than originally proposed by city administration.  The move was made as part of a strategy to continue funding for the Leslie Science and Nature Center.

Public hearing: Act 88

Three people spoke during public hearing on the Act 88 millage, which was held during the board’s regular meeting.

Dale Lesser of Lesser Farms & Orchard in Dexter, characterized himself as a “conservative Republican farmer from way out in the hinterlands.” As such, he said, he generally supports smaller government and lower taxes. So he found himself conflicted in supporting Act 88. Generally, farmers feel alienated from government, he explained, because they feel the government takes away a lot from them and doesn’t give much back. But one of the ways that government does give back is through programs like the MSU Extension and FSEP, Lesser said.

The extension provides unbiased information – otherwise, farmers would have to rely on companies like Monsanto, “who might not have our best interests at heart,” Lesser joked – a line that got a laugh from commissioners. The extension staff helps farmers like him navigate the larger university, helping find resources and making personal connections that are invaluable. As for FSEP, the organization helped him get his apples and honey to customers, including the University of Michigan and Dexter schools. He said he wouldn’t have been able to do that without FSEP’s help.

Jennifer Fike, FSEP’s executive director, also spoke during the public hearing, reading a statement from a supporter – Sharon Sheldon – who couldn’t make it to the meeting. Fike had spoken at an earlier public hearing on the Act 88 millage, at the board’s Aug. 5 meeting, and suggested then that commissioners consider funding agricultural initiatives like FSEP, which played a role in economic development in this region.

The final speaker was Thomas Partridge, who said there should be a series of town hall meetings about this, not just a public hearing. An editorial in the Detroit Free Press had recently called for legislators to put a graduated income tax proposal on the ballot – something that Partridge said he’d also called for. That’s a better approach, he said, than the piecemeal millage panaceas, like Act 88, which he described as totally inadequate.

Commissioner deliberations: Act 88

The board considered the Act 88 resolution at its Ways & Means Committee meeting. Commissioner Mark Ouimet asked that the resolution be pulled out for a separate vote – other items on the agenda were voted on as a block.

Commissioner Jessica Ping said she’d be abstaining on this vote, citing a conflict of interest. Ping, who works in sales for the payroll processing firm Paychex, said that Ann Arbor SPARK – which stands to benefit from the Act 88 millage – is a client of hers.

Earlier in the meeting, in response to public commentary, several commissioners voiced support for the MSU Extension and FSEP, noting the importance of strengthening the region’s food supply. But there was little discussion before the vote – the resolution passed, with Kristin Judge and Wes Prater voting against it, and Mark Ouimet only approving it for FSEP, the two MSU Extension programs and 4-H. Prater said that a millage should be put before voters to decide. Responding to a follow-up email from The Chronicle after the meeting, Judge said she didn’t think it was fair to raise taxes in this economy, and that the legislation that was passed in 1913 was not intended to fund these kinds of programs.

For his part, Ouimet later told The Chronicle that the programs he highlighted in his vote are often overlooked and deserve a dedicated millage, but that Ann Arbor SPARK has multiple funding sources and doesn’t need a dedicated millage. He said he supported funding SPARK through the county’s general fund instead. [Ouimet serves on SPARK's executive committee, as does Bob Guenzel.]

After the vote, commissioner Ronnie Peterson said he voted yes because he supports the programs that will be funded through the millage, but that they needed to have a broader discussion in the future about how they plan to resolve the funding crisis for these kinds of groups. Commissioner Ken Schwartz noted that the millage would have to be renewed each year, so that they can revisit the issue. The programs they were funding, he said, had broad-based community support.

Commissioner Barbara Levin Bergman criticized state lawmakers for part of the county’s budget problems, and urged  legislators to enact a progressive income tax. She said she supports a human services millage for the county – an idea that’s been floated for the November 2010 ballot – but in the meantime, other revenue sources need to be found at the state level.

Commissioner Leah Gunn also voiced support for the human services millage. The problem, she said, is that property tax revenues are likely to fall even more in the coming years. Nonprofits, which add to the quality of life here, are strained, she said. It will be hard getting a human services millage passed, she said, but she’s willing to put her time and effort into it.

Commissioners will have a final vote on Act 88 at their Oct. 21 board meeting.

Indigent Veterans Relief Millage

The board also approved, without discussion, the levy of 1/40 mill to raise $393,616 for the care of indigent veterans who live in the county. The tax would be levied in December and administered by the Department of Veteran Affairs. – the county estimates that property owners would pay $2.50 for every $100,000 of their property’s taxable value. Like the Act 88 millage, legislation for this was enacted pre-Headlee and does not require voter approval. Until last year, the county paid for these services out of its general fund.

The Department of Veteran Affairs offers services that help local veterans tap state and federal resources. The county expects demand for these services will increase because of the ongoing war in Iraq and Afghanistan, the difficult economic climate and increased awareness of the county program.

Funding for Human Services

With some commissioners holding out hope for an eventual countywide millage to support human services, they still confronted the issue of funding for nonprofits in the current budget cycle. The initial budget proposal called for most groups to have county funding cut by 20% in 2010 and another 20% in 2011. [Previous Chronicle coverage: "Nonprofits to County: Don't Cut Funding!"]

At Wednesday’s meeting, commissioner Jeff Irwin proposed an amendment that would keep the 20% cuts next year, but maintain funding at the same levels in 2011, eliminating the additional 20% cuts. Over two years, his proposal would restore $442,750 in funding to agencies that get support from the county. Here are the agencies, and their 2009, 2010 and 2011 funding levels, reflecting Irwin’s amendment:

  • SafeHouse Center: $120,000/$96,000/$96,000
  • Eviction Prevention: $50,000/$40,000/$40,000
  • Fair Housing: $50,000/$40,000/$40,000
  • Shelter Association: $200,000/$160,000/$160,000
  • United Way 211: $40,000/$32,000/$32,000
  • Supportive Housing Initiative: $250,000/$200,000/$200,000
  • Human Services/Children’s Well-Being: $1,263,750/$1,015,000/$1,015,000 (Funding for human services/children’s well-being is a pool of money that will be awarded to nonprofits through a competitive bidding process administered by the joint city/county Office of Community Development.)

So where is the money coming from to offset the funding for nonprofits? Irwin proposed taking it from a capital projects fund, which had a budget of $300,000 in 2010 as well as $300,000 in 2011. The fund is used for unanticipated projects, including renovations and equipment. Irwin’s amendment reduced that fund by $150,000 in 2010 and by $300,000 in 2011, eliminating it completely in that year.

Several commissioners praised Irwin for finding a way to minimize the impact on funding for these agencies. Commissioner Jessica Ping expressed some concern for depleting the fund completely – what would they do if something came up that required funding? As the organization restructures, she said, there might be a need for this.

County administrator Bob Guenzel said they’d have the option to use funds from the “1/8th millage,” a tax that’s dedicated to building maintenance and repair. The budget projects that the millage will bring in $1,346,486 in both 2010 and 2011. Commissioner Conan Smith said they’d also have the option to say no on projects, if they didn’t have the funding.

Irwin’s amendment passed unanimously. Commissioner Ronnie Peterson was out of the room and did not cast a vote.

Budget Update, AFSCME Concessions

Jennifer Watson, the county’s budget manager, gave an overview of the preliminary budget book that commissioners received, and fielded questions after her presentation. But before she started, county administrator Bob Guenzel announced that on Tuesday night, members of five AFSCME units – the largest union of county employees, representing about 650 workers – had ratified an agreement that would change their contracts in 2010 and 2011. The vote, held at the county’s Learning Resource Center at 4135 Washtenaw Ave., included 242 yeas and 35 nays.

Over the two-year period, these concessions will save the county $5,797,091.

Workers represented by AFSCME will forgo a planned 3% pay raise in 2010 and agreed to no raise in 2011. In addition, they agreed to eight “banked” days in 2010 and another eight in 2011. These are unpaid days that each year are a combination of four predetermined dates selected by the administration, and four “floating” days, arranged between the employee and supervisor. They differ from furlough days primarily in the way that the county distributes the pay cuts associated with the unpaid time off, spreading the cuts over 26 pay periods. Each employee’s bi-weekly paycheck will be reduced by about three hours of pay for full-time workers throughout the year.

There are 17 bargaining units that represent roughly 80% of the county’s 1,350 employees. In addition to AFSCME, six other units have now reached new agreements with the county. Diane Heidt, the county’s human resources and labor relations director, told The Chronicle that the six other units have forgone wage increases for 2010 and 2011, and will have a total of 13 furlough or unpaid days over the next two years. They’ve also agreed to modifications to health care benefits and the implementation of premium sharing in 2010.

At Wednesday’s meeting, Guenzel said he expects they’ll eventually work out new deals with all 17 units. That includes the two units representing about 200 employees at the sheriff’s department. Initially, it was not clear that these unions – the locals for the Police Officers Association of Michigan and the Command Officers Association of Michigan – would come to the table. Their contracts had been negotiated last year, and were in place through 2012.

Guenzel praised all the county’s “labor partners,” and commissioners gave them a round of applause. “They didn’t have to sit down to the table with us at all,” Guenzel said. “They stepped up and in my mind really put the county first, put services first, put saving jobs first.” The concessions so far have saved at least 100 positions from being cut, he said. He also noted that non-union employees had taken pay cuts too. Though he acknowledged that they didn’t have a choice in that decision, Guenzel said thanked them for handling it well.

Guenzel said he plans to bring the tentative labor agreements to commissioners at their Oct. 21 meeting.

Summary: Budget comments, questions from commissioners

The board’s first step was to discuss and ultimately approve Jeff Irwin’s amendment regarding funding for local nonprofits (see above).

Commissioner Mark Ouimet said he had some broad questions for the board to think about. First, he suggested that in the future, they set priorities and discuss budgeting for those priorities on a percentage basis. That is, allocating X percent for public safety, Y percent for human services and so on. That way, he said, they wouldn’t get embroiled in debates over specific line items, but can let the line-item decisions be guided by a broader principal and the board’s core values. In the future, looking at what the county wants to fund rather than looking at ways to cut would be a better approach, he said.

Ouimet also commented on the outlook for commercial property values, which was a component in the preliminary budget book’s overview of financial trends. Financing for many commerical properties will be coming due over the next two years, he said, and the county could see a drop-off in values if those properties are vacant. He’s concerned that the value will be lower than the county is anticipating, and urged the staff to be sensitive to that. Like the drop-off in residential property values, commercial property values are “large dollar amounts that could shift quickly,” he said.

Guenzel said that in developing the 2010-2011 budget, and in making necessary modifications to the 2009 budget, they’d been dealing with a situation that came on fairly quickly. The passing of this current budget now gives the staff some time to look ahead to 2012-13, he said, and design a budget that’s more reflective of the priorities of the board and the community.

Commissioner Wes Prater said one of his concerns was that there’d been a minimum of structural changes made during this budget cycle. With the revenue outlook grim in 2012 and 2013, there needs to be some serious discussion about how to handle it. [The county is projecting deficits of $11.5 million in 2012 and $16 million in 2013.] Prater said he knows that people say with every challenge there’s opportunity, but “frankly, I don’t see many opportunities in this one.”

Commissioner Rolland Sizemore Jr., chair of the board, said he felt that the town hall meetings held over the past several months with county employees had been an effective way to communicate with them about the budget process. He thanked employees for stepping up and helping address the deficit.

Upcoming budget dates

In lieu of a working session, the board has scheduled a public hearing devoted exclusively to the budget on Oct. 22, 2009 starting at 6 p.m. at the County Administration Building, 220 N. Main St., Ann Arbor.

Commissioners are expected to make an initial vote on the 2010-11 budget at their Nov. 4 Ways & Means Committee meeting, and to hold a final vote at their regular board meeting on Nov. 18.

Contract for Lansing Lobbyist

At their Ways & Means Committee meeting, commissioners voted to approve a new two-year contract with Government Consultation Services Inc. (GCSI), a lobbying firm run by former state representative Kirk Profit. Commissioner Kristin Judge voted against it. The contract will move to a final vote at the board’s Oct. 21 meeting. [.PDF copy of contract]

Profit had agreed to lower the firm’s monthly fee by roughly 10%, from $5,000 to $4,512 – or $108,288 for two years. In addition to the county, GCSI is a lobbyist for the cities of Ann Arbor and Ypsilanti. One of GCSI’s roles is to keep local officials informed of actions in the state legislature. One example is the recent emails that local officials received from Profit regarding the current budget crisis in Lansing – the emails were posted by Ypsilanti city councilmember Brian Robb on his blog,

Huron River Watershed Council

Laura Rubin, executive director of the Huron River Watershed Council, gave an overview of the nonprofit’s work at Wednesday’s meeting, highlighting its history, programs and projects. Among those efforts are phosphorus reduction in the river, data collection and analysis, and restoring river flow through dam removal. The Mill Pond Dam in Dexter was taken out in 2008 – Rubin said that the two other dams given priority for removal are Argo Dam in Ann Arbor and Peninsular Dam in Ypsilanti. [Most recent Chronicle coverage on Argo Dam: "MDEQ to Ann Arbor: Close Argo Millrace."]

Rubin noted that the council has 39 member governments – including Washtenaw County, which pays annual dues of $11,892. Dues from government members account for less than 10% of HRWC’s $850,000 budget, she said – they leverage that money to obtain significant funding from other sources.

After her talk, a few commissioners had comments and questions.

Jeff Irwin asked how the Great Lakes Restoration Initiative would affect the Huron River. The initiative provides $475 million in the 2010 federal budget for projects targeting environmental problems related to the Great Lakes. Rubin told commissioners that so far, she’s aware of only one request for proposals (RFP) issued from any of the agencies that are distributing the funds. In general, she said the watershed council is well-positioned because it has collected data on the Huron River showing where problem areas are, which might be eligible for funding.

Mark Ouimet told Rubin that he’d been impressed by changes in the shoreline following removal of the dam in Dexter. He said he’d heard nothing but compliments about it from people in the community.

Ken Schwartz thanked Rubin for the council’s role several years ago in preventing a wastewater treatment plant from being built by a private developer in Superior Township, which is part of his district. [According to a Jan. 10, 2006 article in The Ann Arbor News, the Michigan Department of Environmental Quality had denied a permit for the plant because they were unconvinced that the plant could remove enough phosphorous to meet water quality standards. Rock Construction of Livonia needed the plant for a 1,950-unit manufactured home development they were planning to build in the township.]

National Cyber Security Awareness Month

The board passed a resolution marking October as National Cyber Security Awareness Month. Sheriff Jerry Clayton made a few remarks, thanking commissioner Kristin Judge for her leadership on this issue. Clayton and Judge are sponsoring an Oct. 29 forum at Saline High School, featuring Peter Fonash, director of national cyber security for the U.S. Department of Homeland Security. The event includes a session from 3-5 p.m. focused on business and government, and another one from 6:30-8:30 p.m. focused on home and family.

“There are criminals we don’t see,” Clayton said. The point isn’t to scare people, he said, but rather to raise awareness and make sure people take precautions. One in five youth over the past year have been solicited sexually over the internet, he said – it’s reasonable to assume that it’s happened to a child of someone in the room right now.

Environmental Awards

Several local businesses received the county’s 10th annual Environmental Excellence awards, which were presented at Wednesday’s meeting by Janis Bobrin, the county’s water resources commissioner, and Jeff Krcmarik, the county’s environmental program supervisor. Winners are:

  • Thomson-Shore: overall winner – Environmental Excellence
  • Edwards Brothers Inc: overall winner – Waste Reduction and Recycling
  • Fran Coy Salon: honorable mention – Waste Reduction and Recycling
  • Gallup Livery (city of Ann Arbor): overall winner – Water Quality Protection
  • Michigan Firehouse Museum and the NEW Center: honorable mentions –  Water Quality Protection
  • Terumo Cardiovascular Systems: overall winner – Pollution Prevention
  • Ypsilanti Community Utility Authority: honorable mention – Pollution Prevention

Present: Barbara Levin Bergman, Leah Gunn, Jeff Irwin, Kristin Judge, Mark Ouimet, Ronnie Peterson, Jessica Ping, Wes Prater, Ken Schwartz, Rolland Sizemore Jr., Conan Smith

Next board meeting: Wednesday, Oct. 21 at 6:30 p.m. at the County Administration Building, 220 N. Main St. The Ways & Means Committee meets first, followed immediately by the regular board meeting. [confirm date] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public comment sessions are held at the beginning and end of each meeting.


  1. October 10, 2009 at 10:56 am | permalink

    Nice reporting Mary. It sure is a nasty time to be in government. A lot of people trying to do the “right” thing even though they differ somewhat on just what is “right.”

    It seems to me that Mark Ouimet’s idea on setting category priorities and attaching a percentage to them is a worthwhile proposal. It would not only help the Board of Commissioners, it would help concerned citizens. Currently the detail obscures the direction. In reading the article I could see the justification for each of the items being considered for funding. I know that some things are going to have to be cut but I have no idea of RELATIVE merit. Mark’s proposal would give me a kind of reference point that is now lacking.

  2. By Alice Ralph
    October 12, 2009 at 6:02 pm | permalink

    A few points on the County’s historic preservation program–
    The memo from Mr. VanDerworp to Mr. Guenzel was not prepared with direct input from the HDC nor shared with us, as far as I know. I appreciate the additional transparency provided by the Chronicle.
    I can think of four programs, offices or departments that would benefit from the incorporation of the historic preservation program. Expertise, efficiency (savings) and efficacy would be mutual and public benefits.
    Most of the County’s locally designated historic districts are rural in character. Land preservation, niche agriculture, natural areas and historic preservation programs are complementary to each other.
    Structural budget reform is essential. Like Act 88, two of the Michigan historic preservation laws I highlighted in remarks at last week’s meeting were enacted before Headlee. Although the levy of millages by action of the Board is not viewed as progressive, the small proportional amounts proposed could be the least painful way to at least temporarily bridge funding shortages for public services.
    Structural changes are needed to enable economic decisions that more efficiently provide for the public good in governance. Public hearings should be a good step toward identifying those structural changes, alongside of internal negotiations.