Washtenaw Land Bank Debate Continues

On a summer cycle of once-a-month meetings, the Washtenaw County board of commissioners were briefed last week about the agenda for their July 7 meeting. Much of the briefing was spent discussing an item that likely won’t be up for a vote – resurrecting the county’s land bank.

The board dissolved the land bank – a tool used to help the county deal with foreclosed and blighted properties – at their March 2010 meeting, but commissioner Ronnie Peterson has pushed to bring it back. He initially proposed putting a resolution on the June meeting agenda, but later agreed to a request by board chair Rolland Sizemore Jr. to hold off until July. But at the June 29 briefing, Sizemore and Conan Smith, who chairs the board’s Ways & Means Committee, said they were not putting a resolution on the July 7 agenda either, though discussion on the topic is scheduled for the meeting. Peterson did not attend the briefing.

A range of other items are on the agenda, including a public hearing on possible expansion of the county road commission, and a resolution regarding a transparency initiative that’s been in the works for several months. Led by commissioner Kristin Judge, the effort aims to put more of the county’s public documents, especially financial information, online.

Commissioners expressed some concern over one agenda item: Restructuring the debt for a Dexter Township wastewater system, with the goal of lowering payments – payments the township might otherwise have trouble making. The item led some commissioners to ask for a report on debt held by local townships that’s backed by the county’s credit.

Land Bank: Unresolved Issues

The board of commissioners authorized the Washtenaw County Land Bank Authority a year ago, at their July 8, 2009 meeting. In general, land banks can be used to take temporary ownership of tax- or mortgage-foreclosed land while the county works to put the property back into productive use. “Productive use” might mean selling it to a nonprofit like Habitat for Humanity to rehab, or demolishing a blighted structure and turning the land into a community garden.

The idea is to provide some options to deal with blighted properties. In the case of a tax foreclosure, for example, the county treasurer must auction off the parcel to the highest bidder – often, that’s an out-of-state buyer who’s looking for cheap rental property, sight unseen. That scenario often results in a high likelihood that the cycle of foreclosure will repeat itself.

Before it was formed last year, several commissioners voiced concerns about establishing a land bank, citing issues of governance, control and liability for the county. Ronnie Peterson was among the more vocal in his doubts, saying the board wouldn’t have sufficient control over the land bank authority, other than appointing some representatives. He was also worried about maintenance of the properties acquired by the county, and who would manage and pay for that. Ultimately, though, the resolution to form a land bank passed unanimously.

The land bank authority was chaired by county treasurer Catherine McClary, who had championed the proposal. But commissioners never came to agreement about who to appoint to the authority’s board, and didn’t receive the amount of federal support they’d anticipated would help fund the effort.

Citing these concerns, commissioners voted to dissolve the land bank at their March 17, 2010 meeting. Peterson was the lone vote against that decision at the March board meeting. He asked instead that McClary and others involved in the effort be given more time to address these issues. However, Peterson was not able to persuade other commissioners to table the resolution that dissolved the entity.

Then, at the board’s May 19, 2010 meeting, Peterson told his colleagues that he wanted to reestablish the land bank, and intended to bring a resolution to that effect in June. “I’m going to get this passed,” Peterson said at the time. “I’m going to get this passed at all costs to me.” Peterson represents a district that covers Ypsilanti and parts of Ypsilanti Township, which have a high number of foreclosures.

But by June, board chair Rolland Sizemore Jr. had convinced Peterson to wait another month. From Chronicle coverage of the June 2, 2010 meeting:

Peterson told commissioners he’d subsequently had a breakfast meeting with the board chair, Rolland Sizemore Jr., who had asked him to wait until July 7 before proposing a land bank resolution.

Peterson said that he’d be respectful of that request, but that on July 7 “I’ll be aggressive.” Jessica Ping, who chairs the board’s working sessions, pointed out that the topic of a land bank was on the agenda for the July 8 working session. Peterson said he didn’t have a problem with that – they can discuss the resolution that they’ll pass on July 7. He said he had delayed it until July 7, but would not push it back until August. [In the summer, the board meets only once a month.]

Sizemore said the land bank is a good idea, but there are still some glitches to work out. He encouraged commissioners to attend a seminar on land banks being held next week in Lansing.

Ping proposed shifting the discussion from the July 8 working session to the July 7 meeting of the Ways & Means Committee, which is held immediately prior to the regular board meeting. That way, they could talk through the issues they needed to discuss, then vote on the resolution that same evening. Conan Smith, who chairs Ways & Means, agreed.

Administrative Briefing: Questions about Land Bank Remain

At the June 29 administrative briefing, when commissioners got an advance look at the July 7 agenda, Conan Smith explained why a land bank resolution wasn’t on it. He described the land bank as a surgical tool, not something to use broadly. Commissioners hadn’t yet agreed about exactly how the land bank would be used, and that has caused a lot of consternation among the group, he said. It’s worth talking about what unique functions of a land bank should be applied in Washtenaw County, he added, so that they can fine tune it before moving forward.

Rolland Sizemore Jr. told his colleagues that a lot of questions still needed to be answered. He knew that McClary had been working on it, he said – she also attended the briefing. Foremost among the unanswered questions, he said, were 1) Where will the funding for a land bank come from? and 2) What should it be used for? He wanted to see it be more of a countywide tool, not just something used for properties in Ypsilanti, Ypsilanti Township, Ann Arbor and Superior Township – all areas where there are higher concentrations of foreclosures.

Wes Prater said they shouldn’t forget that the land bank can also be used to deal with abandoned property that’s bringing down the value of surrounding property. The big value, he said, is in keeping other properties from losing their taxable value.

Barbara Bergman said she’d like to see a grid that compares the uses of a land bank to those that are provided by the Washtenaw Urban County, a consortium of local governments that receive federal funding for low-income neighborhoods. Smith noted that the main interest for Peterson – who did not attend the briefing – is in keeping people in their homes. There are a lot of other programs that have the same goals, Smith said, including some operated by the treasurer’s office aimed at preventing mortgage foreclosure and tax foreclosure. The joint county/city of Ann Arbor Office of Community Development also has programs providing assistance to low-income homeowners, he said.

McClary told the board that she was not promoting the land bank – she was just hoping to provide answers to the questions that commissioners had. She said she had pushed for the land bank last year, after seeing the number of tax foreclosures in the county climb – from 11 two years ago, to 100 last year, to nearly 400 this year. That’s why she had originally approached the board about starting a land bank, because she thought they could make a go of it and deal with some of those properties. But at this point, she said, it didn’t matter whether they considered it at their July meeting, or pushed it back to the meeting in August.

She clarified that the land bank authority would be an independent entity from the county. That meant that the county wouldn’t be responsible for the authority’s debt or other obligations, she said. McClary explained that some communities funded their land banks from a portion of the interest payments on forfeited properties – the board of commissioners could choose to do that as well, she said.

[In response to a follow-up email from The Chronicle, McClary explained that the state's General Property Tax Act allows the county to collect 1% interest per month from delinquent taxpayers. That interest is credited to the county's delinquent tax revolving fund to pay delinquent tax notes. Taxpayers also pay a one-time administrative fee of 4%, which also goes to the delinquent tax revolving fund. After delinquent tax notes are matured and paid off, any leftover funds are transferred to the county’s Capital Improvements Fund (CIF) and used to pay the debt service of other bonds committed by the board of commissioners. McClary wrote that for a small sub-set of properties that enter forfeiture – the first step in foreclosure – an additional ½% interest is added to the parcel and goes to the delinquent tax revolving fund.]

Bergman pointed out that the land bank authority wouldn’t really be independent, if the county were providing a revenue source.

Sizemore wrapped up the land bank discussion by saying that he thought the land bank was a good idea, but they still needed to work through some of these issues. He said if someone wants to fight about it at the July 7 meeting, he wouldn’t be supporting it at this point.

Though there’s no resolution on the agenda, Peterson – or any commissioner – has the option of bringing a resolution from the floor during the meeting.

McClary thanked the commissioners, saying that this had been the most productive discussion they’d had on the land bank issue so far.

Transparency Initiative

At the June 29 briefing, commissioner Kristin Judge passed out a draft copy of a resolution she intends to bring forward at the July 7 Ways & Means Committee meeting – a committee of the whole board that meets immediately prior to the regular board meeting. The resolution would establish “Open Book eWashtenaw.org,” providing online access to county data, including more detailed budget and expenditure information.

Judge said a team of people – including commissioner Wes Prater, the county’s knowledge manager Andy Brush, and Pete Collinson, interim finance director – had been working with department heads and others on this project. Brush and Collinson attended the briefing.

Rolland Sizemore Jr. asked Judge why she feels they need to do this. Judge replied that it’s the right thing to do, giving the taxpayers access to information about how their money is being spent. It’s also a directive of the Obama administration, she noted. Though the county already does a good job at this, they can do more, she said.

Check registers will be first to go online. Next will be credit card and P-card (purchasing card) information, as well as salaries.

Barbara Bergman expressed some concern about privacy issues. Judge pointed to one of the Whereas clauses, which states:

” [...] the presumption of openness does not preclude the legitimate protection of information whose release is exempted by the Michigan Freedom of Information Act, or in any other way protected by any applicable federal law, would threaten security, invade personal privacy, breach confidentiality, or in any way damage other genuinely compelling interests.” [.pdf file of full resolution]

Conan Smith suggested that they monitor the amount of staff time it takes to put this information online, and how many hits it gets. Tracking the number of Freedom of Information Act requests before and after the data goes online is another way to monitor its effectiveness, he said.

Judge agreed that it was good to monitor those things, but reiterated that the public owns the information, and government should make it as accessible as possible.

The board will consider the resolution at the July 7 Ways & Means Committee meeting. If approved, it will come before the board for final approval at their Aug. 4 board meeting.

Other Items on the July 7 Agenda

The board will consider and vote on several other items at its July 7 meeting, including the following:

Public Hearings: Road Commission, Brownfield Plan

The board will hold two public hearings on July 7, seeking input on: 1) possible expansion of the Washteanw County Road Commission from three to five members; and 2) a brownfield plan for the Mellencamp Building in downtown Ypsilanti.

No additional action is expected regarding the road commission on July 7.

In addition to the public hearing, the board is scheduled to vote on approval of the Mellencamp Building brownfield plan. [.pdf file of Mellencamp brownfield plan] The developer is buying and rehabbing three vacant buildings at 120, 122 and 124 W. Michigan Ave., between Huron and Washington, and converting them to residential and commercial space. The $2.2 million project is seeking brownfield status as a “functionally obsolete” property, which will make it eligible for Michigan Business Tax credits. [For more details on how the brownfield process works, see Chronicle coverage: "Zingerman's Project Seeks Brownfield Status"]

Portage Lake Dam Repairs

The board is being asked by the office of the water resources commissioner to authorize maintenance and repair costs for Portage Lake Dam. The estimated cost is $184,690 over a three-year period, from 2010 through 2012. In addition to monitoring several potential problems – including a crack in the right downstream retaining wall and a downstream retaining wall on the left embankment that’s leaning towards the river – the project includes updating the electrical control system and adding “No trespassing” signs, among other changes. [.pdf file of suggested maintenance and repairs]

At the June 29 administrative briefing, the item prompted Rolland Sizemore Jr., the board’s chair, to ask county administrator Verna McDaniel for an update on the dams along the Huron River in Washtenaw County. He suggested a working session with the Huron River Watershed Council and the county’s water resources commissioner, Janis Bobrin.

The request prompted Conan Smith to quip: “Let the record show that Rolland wants another dam meeting.” The comment was met with a certain number of good-natured groans from his colleagues.

Bond Refunding for Dexter Township

The board will vote to authorize the sale of refunding bonds for Dexter Township – debt that was originally incurred in 1994 to build the Multi-Lakes wastewater system, in partnership with Lyndon Township, and with Putnam Township in Livingston County. The system initially served portions of North Lake, Silver Lake, Half Moon Lake and Blind Lake. A later phase added service to Island Lake, Ellsworth Lake, and portions of Bruin Lake and Joslin Lake in Lyndon Township and Patterson Lake in Putnam and Unadilla townships, as well as the village of Gregory.

In 1999, Washtenaw County had issued refunding bonds of $6.53 million for Dexter Township’s portion of the debt. Now, $3.05 million in debt remains – restructuring it would entail reducing the township’s payments by extending the debt for another five years, a move that’s expected to save the township $38,000.

Commissioners were told that without the restructuring, the township would potentially not have sufficient funds to make its debt payments.

Rolland Sizemore Jr. pointed out that the board took similar action for Sylvan Township earlier this year. In March 2010, the board approved the sale of $10.4 million in refunding bonds to restructure debt from construction of that township’s water and wastewater systems. From the cover memo of the Sylvan Township resolution:

On July 18, 2001, the Washtenaw County Board of Commissioners approved a Resolution (Resolution #01-0138) to sell $12.5 million in bonds to assist Sylvan Township in the construction of a water and wastewater system. Although the bonds were issued by the County, the Township contractually agreed to be responsible for making the required bond payments. In recent years, the economic difficulties that have beset Michigan have also affected the ability of the Township to generate cash flow for debt service through new connections to the system. However, those same economic conditions have reduced interest rates and provided an opportunity to restructure the original debt to provide cost savings for the Township and additional time for economic recovery.

Sizemore asked McDaniel that the board be given a review of debt incurred by these and other townships, which have used the county’s full faith and credit. Barbara Bergman agreed, wondering how many similar projects there are. It was scary, she said, to think what the county’s responsibility would be if a township defaulted.