Loan Request Pulled for Packard Square

Decision gives county more time to craft public-private policy

Washtenaw County board of commissioners chair’s briefing (May 24, 2011): Developers for the Packard Square project in Ann Arbor have decided not to apply for a state loan that had spurred debate among county commissioners. The board was told of the decision at a May 24 agenda briefing.

At their meeting last week on May 18, Washtenaw County commissioners had postponed action on a request to approve a $1 million loan application to the state Dept. of Environmental Quality for brownfield cleanup at the former Georgetown Mall site. Developers were asking to use the county’s full faith and credit as a guarantee for the loan – a request that caused concern over entering into a relationship with a private developer that might pose a financial risk for the county.

The board was expected to take up the request again at their June 1 meeting, along with consideration of a broader public-private investment policy they’re developing, which was also postponed from the May 18 meeting. But now that there’s no loan in play, commissioners seemed inclined to defer action on the policy as well, giving the county’s attorney more time to analyze the issue.

Other items previewed from the June 1 agenda include: (1) five drain projects in the city of Ann Arbor that require bonds backed by the county’s full faith and credit, totaling $6.54 million; (2) acceptance of $455,000 in federal stimulus funds for the county’s weatherization program, which has already received over $4 million in grants over the past three years, and (3) approval of a new public health medical director. The current director, Diana Torres-Burgos, recently announced her resignation – she’ll be leaving her job at the end of June.

Agenda Briefings Resurrected – For Now

Tuesday’s briefing, attended by five of the 11 commissioners, marks a modified resumption of sessions that were previously held prior to every board meeting to review the upcoming agenda. Those administrative briefings were eliminated in February of 2011, after some commissioners objected to the fact that they weren’t sufficiently in public view.

Even though the informal briefings were public meetings, properly noticed under the Michigan Open Meetings Act and attended regularly by The Chronicle, they were held in a small conference room and – unlike other meetings of the board – were not televised.

Earlier this month, the board resurrected the briefings – at least for the summer – with the first one held on Tuesday to preview the June 1 agenda. In the summer, the board works on a reduced schedule, holding its Ways & Means Committee, regular board and working session meetings only once a month, rather than the twice-monthly schedule that’s in place the rest of the year. Additional briefings for the summer meetings are set for June 28 and July 26. The board will decide later whether to continue the briefings into the fall.

The briefings begin at 4 p.m. in the county boardroom at 220 N. Main St. in Ann Arbor, and are recorded for broadcast on Community Television Network and on the county’s website.

Packard Square Loan, Public-Private Policy

At Tuesday’s briefing, the draft agenda for the June 1 meeting still included an item to vote on the public-private partnership investment policy being developed in large part to address the Packard Square loan request. When commissioners were told that the developers no longer planned to seek the state loan, the question became this: Did the board still want to keep the policy item on the agenda?

Board chair Conan Smith asked what the implication would be to eliminating the state loan – the brownfield plan approved by the board on May 18 assumes the $1 million loan will be part of that project. Commissioner Yousef Rabhi, who serves on the county’s brownfield redevelopment authority board, said the developers would need to seek a private loan if they intended to keep the brownfield plan as is – otherwise, they’d need to seek approval from the board to amend the brownfield plan.

Regarding the public-private policy, Curtis Hedger – the county’s corporation counsel – told commissioners that he’d sent the draft policy to John Axe for review. Axe, of the Grosse Pointe Farms law firm Axe & Ecklund, provides bond counsel and other legal services to the county on a contract basis. Hedger said Axe would be providing feedback, but couldn’t attend the June 1 meeting – he’d be celebrating his wedding anniversary.

Leah Gunn questioned the need for the policy at all. Aside from Packard Square, she couldn’t remember the county ever being asked by a developer to back a loan. Typically, the county’s full faith and credit is used for public projects.

Hedger cited the Broadway Village at Lower Town project in Ann Arbor as a similar situation, but noted that it didn’t move forward. He clarified that with the Packard Square loan, the county wouldn’t have been entering into a direct relationship with a developer – it’s illegal to extend the county’s full faith and credit to a private entity, he said. Rather, the relationship would have been between the county and the state, which was providing the loan through a program for brownfield projects. The county’s involvement benefits the developer only indirectly, he said.

Leah Gunn

County commissioner Leah Gunn, after the May 24 agenda briefing. She recently announced her intent not to run for re-election in 2012. Redistricting would have put her into the same district as incumbent and fellow Democrat Yousef Rabhi, whom she says she'll support in his re-election bid.

The county needs to make sure that whatever policy is adopted is crafted precisely, Hedger said, so that they deal with any type of public-private partnership legally.

Gunn said she didn’t think they should waste time on developing a policy – they won’t be encountering this type of situation regularly. “It just doesn’t make a lot of sense to me,” she said.

Smith observed that he’d made a considerable time investment in it so far – after a special working session on May 17 to discuss the issue, he’d worked up a draft policy that was brought to the May 18 meeting, though it was ultimately postponed.

“Sometimes you have to let it go,” Gunn advised.

Rolland Sizemore Jr. speculated that there will likely be more public-private projects proposed in the future. He wanted to make sure they didn’t create a policy too quickly that would hurt the county down the road. He said he wasn’t in a mood to rush it through.

The consensus among commissioners who attended the briefing was to pull the item from the June 1 agenda, and possibly bring it back to the board at a later date.

Full Faith and Credit – Public Works Projects

The issue of full faith and credit came up again in relation to five requests from the county’s water resources commissioner, on the June 1 agenda for initial approval. The projects, which require the county to back bond payments totaling up to $6.54 million, are all located in Ann Arbor:

  • Allen Creek drain cistern installation, downspout disconnection and tree planting – up to $330,000.
  • County Farm drain stream bank stabilization – up to $1.2 million.
  • Malletts Creek drain/Burns Park porous alley; Malletts Creek cistern installation, downspout disconnection, and tree planting; and Malletts Creek stream bank stabilization – up to $3.48 million.
  • Swift Run cistern installation, downspout disconnection, and tree planting – up to $75,000.
  • Traver Creek cistern installation, downspout disconnection, and tree planting; and Traver Creek stream bank stabilization – up to $780,000.

Bonds would be repaid from special assessments to the city of Ann Arbor. For the County Farm, Malletts Creek and Traver Creek projects, special assessments would also be made to the state and county.

Rolland Sizemore Jr. asked why the city of Ann Arbor couldn’t guarantee the bonds with its full faith and credit, since the projects are all located in that city. Conan Smith explained that these improvements are being made to county drain systems within the city. As such, the county is allowed to create special assessment districts, like any other public works project, he said.

Smith added his thanks to the staff of the water resources commissioner for preparing these projects in time for the June 1 meeting. He said that he and Sizemore had made a commitment to ensuring that – as much as possible – items didn’t get considered for initial and final approval on the same night.

Agenda items are first brought to the Ways & Means Committee, chaired by Sizemore and consisting of the entire board, for an initial vote. They are then forwarded to the regular board meeting, chaired by Smith, for a final vote. The meetings are held back-to-back, but items from Ways & Means typically aren’t considered on the same night – they are forwarded to the board meeting that’s held two weeks later – or, on the summer schedule, a month later. The intent is to allow for more time for commissioners to reflect on the items between casting their initial and final votes.

Departmental Reorganization

An effort is in the works to consolidate three county departments: the office of community development (OCD), ETCS (the employment training and community services department) and the economic development & energy department. Commissioners were briefed on this reorganization at their May 5, 2011 working session, with the expectation that it would be brought to the board for approval at the June 1 meeting.

At the May 24 agenda briefing, however, Joanna Bidlack – a county administration staffer who leads the briefings – said the item had been pulled from the June 1 meeting. She reported that Diane Heidt, the county’s human resources and labor relations director, had met with union leaders earlier in the day and they had asked for more time to assess the change. Now, the plan is to bring the reorganization to the board’s July 6 meeting for initial approval, with a final vote on Aug. 3.

Community Corrections Grant

Commissioners will be asked to approve a grant application for the county’s community corrections program, operated by the sheriff’s office. The grant of $421,801 – for the period from Oct. 1, 2011 through Sept. 30, 2012 – is only a portion of the program’s $1.01 million budget. Other revenues include $215,983 from the county’s general fund, $76,386 from the program’s fund balance, and an estimated $295,890 in program-generated revenues, including fees from tethering and drug testing.

Programs run by community corrections are designed in part to provide sentencing alternatives to the Washtenaw County Trial Court. Programs include pre-trial screening, drug testing, electronic tethering, supervised release, and educational efforts, such as the “Thinking Matters” program offered in partnership with the nonprofit Dawn Farm.

Weatherization, Food Grants

Two items on the June 1 agenda relate to the county’s employment training and community services (ETCS) department.

Commissioners will be asked to accept $455,000 in federal stimulus funds – from the 2009 American Recovery and Reinvestment Act (ARRA) – to pay for weatherization assistance. The funds were originally granted to other municipalities but weren’t used, and are being redistributed.

Washtenaw County has already been granted $4.3 million in weatherization funds from 2009-2011, and has finished work on 611 residences. The new funding will pay for about 70 additional residences. The services – including home inspections, refrigerator efficiency testing and consumer education – are available to residents with an income at or below 200% of the federal poverty level. That’s $23,448 for a single person, or $45,088 for a family of four.

ETCS is also asking the board to approve a grant application to fund a summer food program for children. Nearly $116,000 in federal funds, distributed through the state Dept. of Education, are available to pay for breakfasts, lunches and snacks to low-income children at 30 sites throughout the county. Kelly Belknap, interim deputy county administrator, told commissioners that more details about the exact sites will be available by the June 1 meeting.

Public Health Medical Director

Diana Torres-Burgos, the county’s public health medical director, recently announced her resignation – she’ll be leaving her job at the end of June.

On the June 1 agenda is an item asking commissioners to approve the hire of a new medical director. However, there were no additional details available at the May 24 briefing. The board will be asked to make both an initial and final vote that same night.

[After the briefing, interim deputy county administrator Kelly Belknap told The Chronicle that interviews with three finalists are being held this week – no decision has yet been made on a hire.]

Conan Smith objected to the process, saying it was a nightmare to handle it this way, because it gave the board and public no opportunity to vet a senior level staff position. Leah Gunn pointed out that no one from the public ever comments on the medical director appointment. It’s not a nightmare, she said. Smith allowed that perhaps he was just in a grumpy mood.

Belknap explained that the public health department needs a doctor on staff – if they don’t get final approval at the June 1 meeting, the appointment would have to wait until the July 6 meeting, and there’d be a gap between the departure of Torres-Burgos at the end of June. Medicare services provided by the county – including immunizations and the maternal infant health program – require that a licensed medical doctor on staff bill Medicare, via the state, for reimbursement.

Next regular board meeting: Wednesday, June 1, 2011 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. By Bob Martel
    May 25, 2011 at 3:45 pm | permalink

    Make no mistake, the Packard Square loan guarantee was not a “Public-Private Partnership.” It was simply a Public subsidy of a Private project. I’m glad that the developers have seen fit to proceed with without this feature.

  2. By Alan Goldsmith
    May 25, 2011 at 3:58 pm | permalink

    “Conan Smith objected to the process, saying it was a nightmare to handle it this way…”

    Maybe we can bring in an Emergency Financial Manager, a concept Mr. Smith approves of, to handle this?

  3. By Leah Gunn
    May 25, 2011 at 4:39 pm | permalink

    I can’t believe I let you take that picture, Mary! :-)