Board chair Yousef Rabhi and vice chair Alicia Ping. (Photos by the writer.)

After a lengthy and often heated debate, the board voted 5-4 to give initial approval to the notice, but postponed final action until July 10. Voting in favor of initial approval were Ping, Conan Smith, Dan Smith, Andy LaBarre and Kent Martinez-Kratz. Voting against the proposal were Yousef Rabhi, Ronnie Peterson, Rolland Sizemore Jr. and Felicia Brabec.

Ping noted that her goal isn’t necessarily to cut funding for the courts, but rather to be more transparent about where the money goes. The board could ultimately decide to leave the lump-sum approach in place. Giving a notice to terminate the agreement simply gives the board the option to end it.

Conan Smith, who has wrangled with court officials in the past on this issue, argued that the legislative branch is responsible for budgeting, and the board has abrogated that responsibility by agreeing to lump-sum funding. The board gives up far too much authority over line-item expenditures in exchange for “peace in the valley,” he said. “I want to see something different.” With a line-item approach, the county board could indicate priorities for the courts by allocating more funds to specific areas. Dan Smith also argued in favor of the action, noting that the courts are funded with essentially no oversight.

No court officials attended the June 5 meeting. The proposal had not been on the published agenda.

Ronnie Peterson argued most strongly against Ping’s proposal, fearing it would damage the board’s relationship with the courts. Peterson also felt the board itself hadn’t been very accountable regarding a $345 million bond proposal it’s considering. “So as we blast others, let’s prepare to take a few pellets ourselves,” he said. Rolland Sizemore Jr. warned that the board might be starting a fire that they couldn’t put out. He noted that if court officials decide to sue, the county would be required to pay the attorney fees.

Commissioners initially were set to take a final vote at the board meeting that same night – held immediately after the ways & means committee meeting. However, after a break between the two meetings, corporation counsel Curtis Hedger reported that the memorandum of understanding with the courts actually requires a 12-month notice, not the six months that had been discussed. This turned the opinion of some commissioners, who wanted to take more time to study the issue. Andy LaBarre, who chairs the board’s working session, offered to schedule the topic for a working session as soon as possible.

The motion to postpone final action passed on a 6-3 vote, with dissent from Alicia Ping, Dan Smith and Kent Martinez-Kratz. So the proposal will appear on the board’s July 10 agenda.

That July 10 meeting will also include action related to the county’s major bonding initiative to cover unfunded pension and retiree healthcare obligations, including a public hearing. The first public hearing for the potential $345 million bond proposal was held on June 5. It drew four people who all expressed caution about the possible action, with some suggesting a millage or additional budget cuts to cover the retiree obligations instead of bonding.

On June 5, commissioners also set other public hearings for July 10: (1) for two brownfield redevelopment projects in Ann Arbor – at Packard Square (the former Georgetown Mall), and 544 Detroit St.; and (2) for the annexation of industrial property from Scio Township into the village of Dexter. And the July 10 meeting will include final consideration of a strategic space plan for Washtenaw County government facilities totaling about $5 million. The proposals, which got initial approval on June 5, include creating a plan to redevelop the Platt Road site where the old juvenile center was located. The redevelopment might entail a mix of uses, including affordable housing.

A range of other items addressed on June 5 included: (1) creating an historic district for the Jarvis Stone School in Salem Township; (2) an update on the county’s Head Start program, which will be falling under control of the Washtenaw Intermediate School District; and (3) resolutions of opposition – one against gun violence and one against the long-range transportation plan of the Southeast Michigan Council of Governments (SEMCOG). The SEMCOG plan calls for expansion of I-94 in Detroit and I-75 in Oakland County. Some commissioners think that funding should be used to repair existing roads and bridges instead.

Court Funding

For several weeks during budget deliberations, Alicia Ping (R-District 3) has expressed concerns over the county’s approach to funding the court system.

County commissioners Alicia Ping of Saline (R-District 3) and Dan Smith of Whitmore Lake (R-District 2) at the board’s June 5 meeting.

Unlike other units of county government, which prepare line-item budgets authorized by the county board, the courts operate under a memorandum of understanding with the board of commissioners. The board unanimously approved that MOU on Jan. 19, 2011, replacing one that had been in place since 1990. [.pdf of memorandum of understanding] Ping had been absent at that Jan. 19 meeting.

The agreement states that the county will provide “lump sum” funding to the courts, allocated to: (1) the trial court – an entity that includes the 22nd Circuit Court, court clerk services, juvenile court, Friend of the Court, and probate court; (2) 14A District Court; and (3) a portion of the county’s child care fund. The county does not have line-item budgeting authority, but the courts agreed to submit a bi-annual line-item budget, and to provide quarterly financial projections.

The MOU also covered the community corrections division. However, subsequently oversight of that operation has shifted from the trial court to the sheriff’s office, and is not subject to the lump sum agreement.

The 2011 MOU was signed by Conan Smith, who chaired the board at that time; Donald Shelton, chief judge of the trial court; and Kirk Tabbey, the 14A District Court’s chief judge.

From the general fund, the lump-sum payment to the courts in 2013 totals $19,155,029 – with $13,353,110 for the trial court and $5,801,919 for district court. In addition, state funding for certain trial court operations – the Friend of the Court and child care fund – totals $4,977,047. [.pdf of 2013 budget pages with trial court-related amounts highlighted]

The June 5 proposal by Ping, the board’s vice chair, came in the context of the administration’s goal of identifying $6.99 million in structural reductions for the overall 2014 general fund budget. For several weeks, Ping has raised concerns that the courts are treated differently than other county units in the budgeting process. At the board’s May 15, 2013 meeting, for example, she asked to see the history of funding for the courts, saying she was curious about whether the courts had cut in the same way that other county units had cut. “I’d like to know that we’re all in the game together,” she said at the time. [.pdf of historical funding for public safety & justice operations]

No court officials attended the June 5 meeting. Ping’s proposal had not been on the published agenda.

The process for ending the lump-sum agreement is written into the MOU. The term “the Court” is used to refer to all courts covered in the MOU:

13. Modification and Duration – This Agreement may be modified by mutual consent of the parties. This Agreement shall continue indefinitely and may be terminated only upon one year’s written notification by a party to all other parties. The County agrees to include the Court in the modification process relative to any County policies covered by this Agreement.

However, during the board’s June 5 ways & means committee meeting – when Ping brought forward her proposal – the discussion was based on a faulty assumption that the MOU called for a six-month notification process. That assumption influenced the debate, with some commissioners arguing that it was urgent to end the agreement before voting on the next budget. The administration is preparing a new four-year budget from 2014-2017, which will require board approval before Dec. 31, 2013.

The board’s discussion also focused most frequently on the trial court – the county’s largest court – although the MOU covers the 14A District Court and other court-related operations as well.

Court Funding: Ways & Means Committee – Trial Court Software

A court-related item was first mentioned near the beginning of the June 5 ways & means committee meeting, which immediately precedes the board meeting. Board chair Yousef Rabhi reported on the trial court’s efforts to secure new software. Court officials had approached him with a proposed vendor, Rabhi reported, but he had insisted that the court follow the county’s standard procurement process, including issuing an RFP (request for proposals). “This project, in my mind, should not be above [the RFP process],” Rabhi said. “I got pushback from folks saying that we wouldn’t get any other bidders, and that we’d just make a fool of ourselves and that we shouldn’t do the RFP process. But we stuck with it.”

The result of the RFP, Rabhi said, is that the same proposed vendor and the same service came in at a savings of $500,000. [.pdf of bid responses, which are still under evaluation] “I think that it’s a testament to the procurement process that we have,” he said, and that a good process leads to good outcomes.

Rabhi said he wasn’t arguing that the county should go ahead and approve the funding for the trial court’s new system – as that’s a topic that deserves more discussion. The item would be brought to the board at its August meeting, he said.

Court Funding: Ways & Means Committee – Ping’s Proposal

After other items at the ways & means meeting had been dispatched, Alicia Ping announced her intent to make a motion to give notice to the courts to terminate the lump-sum agreement with the county. No other elected official’s office is given a lump sum for its budget, and Ping felt it’s only proper that the board is able to look at everything as a whole – “and not just have a lump of money go to the court and not have any idea where it goes.” It’s especially important, she noted, as the county grapples to cut nearly $7 million from the 2014 budget.

The purpose isn’t necessarily to reduce the courts’ budget, she said. Rather, the board should know where the money is going, since commissioners are ultimately responsible for the entire county budget – including court operations.

Ronnie Peterson wondered if the relationship with the courts has deteriorated to the point that the board or administration isn’t communicating about what’s expected from the courts. Has any attempt been made to enhance that relationship, especially regarding the budget? He was very interested in engaging the chief judge [of the trial court, Donald Shelton], other judges and court administrators on this issue. Peterson said he respected Ping, but he hadn’t been privileged to know that this resolution would be made that night, or why it was being made.

Ping replied that she wasn’t aware of any deterioration in the relationship between the courts and the board. She said she was only proposing the notice of intent to terminate the agreement, saying that the agreement required a six-month notice before it could be ended. [This later proved to be faulty information; the agreement requires a 12-month notification.]

Lloyd Powell, Washtenaw County public defender.

Ping clarified that she didn’t intend to cut $7 million from the court budget. That $7 million figure is the amount of cuts that the county needs to make in its entire general fund budget. The notice, according to the county’s contract with the courts, lets court officials know that the county would like a line-item budget instead of a lump-sum approach. It’s not necessarily to cut the courts’ budget, she reiterated, but only to see where the money is going. “As a body, we are responsible for that money,” she said. Ping noted that the county’s public defender, Lloyd Powell, has reported that his office is doing triple the work now compared to previous years, with a lower budget.

If the board passes this resolution, Peterson replied, “there will be a big question in the minds of those seated in the House of Justice over what happened to their relationship with the board of commissioners.” If the board has an issue with the lump-sum approach, has anyone approached the courts to talk about it? he wondered.

County administrator Verna McDaniel reported that the administration has met with court officials about the upcoming budget, as part of the existing budget development process. Everything is on course based on the lump-sum approach, she said.

In that case, Peterson said, it seemed like this resolution was just to send a message to the courts about the board’s interest in discussing this issue – and that the court officials shouldn’t take offense.

Rolland Sizemore Jr. observed that regardless of the vote’s outcome, “tomorrow morning everybody in town will know about it.” His concern is that there hasn’t been discussion about this, and he wanted to schedule a working session on it. His understanding is that the courts are on budget. The board might be starting a fire that they couldn’t put out, he warned, and if the courts aren’t happy, they can hire an attorney that the county will have to pay for. He didn’t necessarily disagree with Ping, but he wouldn’t support her motion until the board has discussed the issue in more detail.

Conan Smith called Ping’s proposal “good government,” and he supported it. There are three branches of government, he noted. At the county level, the board of commissioners is the legislative branch. The board’s only check on those other branches of government – the judiciary, and the administrative branch of elected officials, like the water resources commissioner and sheriff – is “the power of the purse,” he said, and the ability to establish a budget. “When we approve a lump-sum budget, we abrogate that responsibility and we surrender that duty to other people. I don’t think that comports with our process of checks and balances.”

C. Smith pointed out that he had proposed pulling out of the lump-sum agreement in the past, when he was chair of the ways & means committee and again when he served as board chair. [Details of that history are included in The Chronicle's Jan. 19, 2011 meeting report.] He said he had struggled with the courts over it, in terms of getting them to understand how their budget impacts the systemic operations of the entire county. It’s appropriate for the board to have line-item authority over all of the county’s units, including the judiciary, he said.

In addition, it’s not a practice that’s out of line with the custom throughout the court system, C. Smith noted. The Michigan legislature approves line-item budgets for the state courts, and appropriates funding for specific programs, like the drug court. The legislature sets its priorities, via those budgets, he said, “and it’s the same thing for us.” If county commissioners believe that a drug court should be a priority, then they should articulate that in the courts’ budget and have the confidence that taxpayer dollars are being spent on that. “For me, it is a good governance question more than anything else.”

Dan Smith responded to the issue of timing, stating that the current agreement requires a six-month notice of intent to terminate. Just because commissioners give notice doesn’t mean they will end up terminating the lump-sum approach, he said. But if they don’t give notice, they have no options. By acting on it that night, they’ll keep their options open.

D. Smith also noted that this funding system has been put in place by the state legislature. The county board is responsible to allocate funding for county services, including the courts. He agreed with C. Smith that a lump-sum agreement abrogates that responsibility. He wasn’t saying that this was the best system. He thought the courts and many boards of commissioners across Michigan would like to handle it differently. A lot of people would be happy if the state legislature would take over funding of the courts, “and this body would not be in the middle of running the courts,” he said. However, “that is not where things are today.”

D. Smith reported that House Bill 4704 of 2013 had recently passed the state House of Representatives. It changes some of the county budget procedures, he noted. He read aloud a relevant portion of the bill, which states that the county budget “is presumed to fund those activities of a county mandated by law at a serviceable level.” The bill addresses ways to appeal those funding decisions, including mediation, and calls for any formal appeal to be handled by the state court of appeals, not the county circuit court. It appears to shift the balance, he said, adding that he isn’t intending to fire a shot across the bow of the courts and judges. But the board needs to keep its options open as they’re looking at a $7 million shortfall, he added, and there’s a huge pot of money that’s given to the courts “with essentially no oversight.”

County board chair Yousef Rabhi of Ann Arbor (D-District 8). In the background is county administrator Verna McDaniel.

Yousef Rabhi spoke next, saying he wasn’t expecting this proposal to come forward that night. It had been discussed in the past, he noted, and he agreed that oversight was important. The lump-sum agreement might not be the best way to accomplish that. But he also believes in process, Rabhi said, and as board chair he felt his duty is to lead the county as a whole. “This action could have significant ramifications on our relationship with the courts, so I want to make sure that we’re understanding the full context of the action that we’re taking today.”

He asked McDaniel to talk about the history of the county’s relationship with the courts, particularly in terms of oversight and consistency. How are the courts treated, compared to other county units? What oversight does the board have?

When McDaniel indicated some uncertainty in responding, Rabhi said that in the absence of that information, he felt the board shouldn’t act on the proposal. He agreed in concept that the board needs more oversight of the courts, but commissioners need more information. They need a process in order to vet the idea and properly discuss it with court officials. The board needs to lead the county in a way that doesn’t alienate its partners, he said. Rabhi hoped commissioners would vote to postpone it so that they could discuss it at a working session. He said he was open to changing his mind, but that was his initial response.

Felicia Brabec noted that the board does have a process for addressing issues like this, and it begins at a working session. Resolutions are then brought forward for an initial vote at a ways & means committee meeting, she said, and then for a final vote at the regular board meeting. That process seems solid to her. She felt like she was being asked to make a decision without that process, having heard about it just that evening.

Pointing out that Rabhi had indicated he might change his mind, Conan Smith raised the issue of a four-year budget, which the board has authorized the administration to develop. Doing a lump sum for four years “makes me highly uncomfortable,” C. Smith said. He’s supportive of the four-year budget process because the board has strong control over the budget’s line items. But that’s not the case with the courts.

C. Smith also reiterated the point that the board wouldn’t be making a decision about the lump-sum budget itself. Commissioners are just making sure they have that option later in the year. This is simply starting the process. “If we don’t do it, then we’re hamstrung.”

Peterson moved to postpone initial action on the item until the board’s July 10 ways & means committee meeting.

Outcome on motion to postpone initial action: The motion failed on a 4-5 vote, with support only from Ronnie Peterson, Yousef Rabhi, Rolland Sizemore Jr. and Felicia Brabec.

Discussion continued.

Dan Smith argued that if commissioners wait until July to notify the courts, they’ll miss their window on this option and won’t have the option to eliminate the lump sum by the end of the year, when the budget must be adopted.

Ping compared her proposal to the board’s proposal to issue a notice of intent to bond. That notice of intent doesn’t mean the board will decide to issue bonds – it just provides that option, she said. The same is true with her proposal to notify the courts. Ping pointed out that she asked for a 10-year funding history of the courts about six weeks ago, and she raised the issue again at the board’s budget retreat in May. “Maybe nobody took it seriously up until I made this resolution,” she said, “but I have been talking about this for six weeks.”

She also was uncomfortable with a four-year lump-sum budget for the courts, given that there’s uncertainty about whether some of the courts will remain open, she noted. “If that budget’s in place, the money goes – whether they need it or not,” she said.

Sizemore noted that several commissioners had referred to a four-year budget, as though the board has decided to adopt a four-year budget. Perhaps they should revert to a two-year budget cycle, he said, which could give the board more control. [At its May 1, 2013 meeting, the board authorized McDaniel to develop a four-year budget process. However, the board is only required by state law to adopt the budget one year at a time. For several years, the county has worked on a two-year budget planning cycle.]

Washtenaw County commissioner Ronnie Peterson of Ypsilanti (D-District 6).

Peterson said he fully understood Ping’s intent. But for him, it’s a matter of respect for the courts. If at any time commissioners felt that they needed to discuss the lump-sum budget with the chief judge and court administrator, “we should have done that.” As he has in the past, Peterson expressed concerns about adopting a four-year budget. He felt that the courts were very accountable and responsive. The board can ask the courts for a line-item report of its expenditures, he noted – so there are already checks and balances in place.

The courts had wanted flexibility in spending their budget, and that request had been mediated years ago, resulting in a lump-sum agreement, Peterson said. And if commissioners had wanted to send a notice to the courts to terminate that agreement, they should have acted in January, he argued. Peterson felt the board itself hadn’t been very accountable regarding the $345 million bond proposal. “So as we blast others, let’s prepare to take a few pellets ourselves.”

Conan Smith agreed that the board has the right to ask the courts for detailed budget information. But in his experience, when he was chair of the ways & means committee and was dealing with a proposed $30 million deficit a few years ago, he said, the courts weren’t very forthcoming with information, including detailed projections. “It was extraordinarily frustrating,” he said.

Also, C. Smith added, “it shouldn’t be about asking – it should be about telling.” It’s the duty of the legislative body to determine how the county’s budget is allocated. He felt the board has an obligation to set the line items, telling the courts – by way of funding – what the board’s priorities are. That’s different from asking the court to inform the board about how a lump-sum budget is being spent, he noted.

Rabhi asked McDaniel to explain the purpose of a lump-sum agreement. She talked generally about the elements in the agreement, not the motivation behind it. She described it as “not a very detailed document” that spells out the powers of the county and the courts. Rabhi asked what actions the courts had taken to demand this kind of agreement. McDaniel said she didn’t think the courts demanded it, but that both the county administration and the court officials felt it was a good document to have a clearer understanding about the role of each entity. [In general, members of the judiciary view their operation as a separate unit of government, and believe that their independence should be reflected in the budget process. This is a tension that's not unique to Washtenaw County.]

Rabhi noted that the courts feel very strongly about the lump-sum agreement, so he was trying to understand their perspective. In addition to the oversight issue, he said, as board chair he has an interest in having “a peaceful, well-functioning organization – so I don’t want to make anybody angry in this process.” He acknowledged that people will likely be mad now that the discussion is already taking place.

He observed that Ping and other supporters of her proposal view it as the start of a process. If it passed, he hoped that commissioners would engage the board in that process and not go into it with the preconceived notion that the lump-sum agreement will be eliminated.

Andy LaBarre called the question, a procedural move meant to force a vote.

Outcome on calling the question: On a voice vote, the board unanimously agreed to call the question.

Outcome on initial vote to send a notice of termination: The item passed on a 5-4 vote, with support from Andy LaBarre, Kent Martinez-Kratz, Alicia Ping, Conan Smith and Dan Smith. Voting in dissent were Felicia Brabec, Ronnie Peterson, Yousef Rabhi and Rolland Sizemore Jr.

Dan Smith then moved to forward the item to the board’s regular meeting that same night.

Curtis Hedger, the county’s corporation counsel, explained that in a procedural motion like this, only five votes are needed to move the item to the board meeting. However, the vote at the board meeting would then need six votes in order to pass – a two-thirds majority.

Responding to a query from Rabhi, Hedger said if the board doesn’t take a final vote that night, the item would be moved to the board’s July 10 agenda. A six-month notice approved on July 10 would push the earliest termination date into January 2014. Hedger noted that the board can act at any time, saying a decision doesn’t need to be tied to the budget process. However, it would mean that negotiations with the courts would begin almost immediately after their 2014 budget had been approved.

In that case, Rabhi said, he’d support moving it to the board meeting that night for a final vote.

From left: Corporation counsel Curtis Hedger and commissioner Rolland Sizemore Jr. of Ypsilanti Township (D-District 5).

Peterson wanted to assure commissioners that the courts wouldn’t “roll over” on this issue. He felt the courts would ask for mediation. “This board may speak,” he said, “but you will not have the last word.”

Peterson argued that because the county pays all the bills, anyone can find out how the courts spend their lump-sum budget. Even with a line-item budget, he said, the only way to know if the courts – or any department – spent the money in the way it was allocated is to contact the finance department. The main issue is whether the budget for the courts is an appropriate amount – whether it’s given as a lump sum, or as a line-item budget. But if commissioners think they’ll be able to “rope in” the courts with a line-item budget, “you’re dreaming,” Peterson said. He couldn’t believe they’d wasted so much time discussing it, when they should have simply dispatched the county administrator to talk with court officials. “It’s not your job to be watchdogs of the court system …” he said.

Kent Martinez-Kratz noted that his constituents are asking about the $345 million bond proposal, and residents want every rock turned over regarding the budget. It might be grandiose to think that the county board can influence the court system, he said. But he didn’t think that creating an open and transparent budget for the courts is asking too much. As he asks his constituents to consider this bond proposal, he’s also asking the courts to produce a transparent budget. He thought his constituents would support that, too.

Brabec said she was struggling, because the board doesn’t know what the implications are. She agreed with the points on oversight and transparency. But they don’t know what unintended consequences this action might cause, because it’s so rushed.

Rabhi called the question.

Outcome on calling the question: It was approved on a unanimous voice vote.

Outcome on vote to move the item forward to the board meeting that same evening: The motion was approved on a 6-3 vote, over dissent from Felicia Brabec, Ronnie Peterson and Rolland Sizemore Jr.

Court Funding: Regular Board Meeting

During the board meeting that immediately followed the ways & means committee meeting, Rolland Sizemore Jr. asked about the notification timeline. Curtis Hedger reported that during a break between the two meetings, he’d looked at the memorandum of understanding. It actually states that a 12-month period of notification is required, not six months. So if the board approves giving notice that night, the agreement couldn’t be terminated until June of 2014. “So it is a bit of a difference than what we discussed at ways & means,” Hedger said.

Sizemore observed that the board spent an hour discussing something that doesn’t matter now, in terms of the budgeting process. “I’m not going to comment on that,” Hedger replied.

Ronnie Peterson asked that the lump-sum item be separated out from the other agenda votes, so that the board could discuss it further. He criticized the fact that the board acted on a resolution when they didn’t know all the facts. He wanted to make sure people knew he hadn’t been part of that, saying he had a different style of communication. He hoped to reach out to court officials in a different way, and to make sure they knew that the $7 million in cuts to the county budget “does not rest with the court.”

Washtenaw County commissioner Conan Smith of Ann Arbor (D-District 9).

Conan Smith noted that the six month difference is significant in terms of timing, but it’s not significant in terms of the philosophical underpinning of whether to have a lump-sum agreement. Technically, the board could adopt a lump-sum budget for the first six months of 2014, then move into a line-item approach for the second six months. “It’s completely doable,” he said. The board gives up far too much authority over line-item expenditures in exchange for “peace in the valley,” he said. “I want to see something different.”

Alicia Ping said she thought of it as being six months early for the 2015 budget, rather than six months late for 2014. She supported C. Smith’s idea of doing a lump sum for the first six months of 2014, followed by a line-item budget.

Ping also pointed out that she in no way insinuated that she wanted to balance the county’s budget cuts on the back of the courts. “I never said that,” she noted, adding that in fact she had suggested the courts’ budget might not change at all, in terms of the amount. The request for a line-item approach isn’t out of line at all, she said. “I answer to the people in my district, the taxpayers. I don’t answer to the courts.”

Peterson noted that nothing mandates the courts to negotiate with the county, as long as there’s a signed agreement [the memorandum of understanding]. The only reason he could imagine that this was being brought up now is to save face, given that the 2014 budget “is $7 million out of whack.” The only thing that the county can do at this point is to ask the courts to cooperate and help address the deficit, he said.

But if the intent is for the board to manage the courts’ budget, that’s a very different discussion, Peterson said. “Those are two separate issues.” When the board can’t even narrow down its budget, he didn’t know how commissioners could presume to control the court system’s budget. The board hasn’t balanced its budget in a long time without using reserves or employee furlough days and other concessions, he said. What’s more, they’re now in a position to need to borrow $345 million to cover their retiree obligations, he noted. Peterson wasn’t interested in managing the judicial system’s budget. “We have our hands full.”

As chair of the board’s working session, Andy LaBarre said he hoped to diffuse some of the tension by rearranging the working session schedule to bump up this topic. Regarding the charge that the board had wasted an hour on this discussion, he quipped, “folks would say that’s not the first time, and sadly they would not be wrong.”

LaBarre observed that everyone is trying to address how to do things differently, given that they face an entirely new set of challenges. They need to understand where every dollar is going so that when they pass the budget, they can make the case to citizens that they’ve had a full discussion and it’s been well considered.

LaBarre also noted that the working session topics have been good, but attendance at those sessions “is not always as good as the volume of ideas that are brought forward for them.” He’s happy to move the topic up in the queue of working session schedules. “All I’d ask is that we come and have a full discussion with a full caucus.”

Yousef Rabhi described himself as conflicted on this issue. Accountability and transparency are very important, so he appreciated that Ping introduced this topic. But from a process and courtesy standpoint, the board is a partner with the court system, he said. The courts have helped balance the county’s budget, and the board needs to be respectful of that. He didn’t want to create a confrontational atmosphere, adding “I know some of that has already been done.”

County commissioner Andy LaBarre of Ann Arbor (D-District 7).

In light of the longer one-year notice requirement, Rabhi said he’d like to postpone the item until the board’s July 10 meeting. Commissioners need to engage in a dialogue with court officials, he said. “Otherwise, it could lead down a very ugly path and one that I don’t want to go down. It’s going to be an interesting summer, one way or another.”

With that, Rabhi moved to postpone the item until July 10.

Dan Smith opposed postponement. He posited that this is exactly how the process is supposed to work. The board is a public body, he noted, and a motion was brought forward at a public meeting for a vote. This is the beginning of a 12- or 13-month conversation. At the end, the board might decide to continue with a lump-sum approach. But they can’t have that discussion unless they give notice to the courts. “I see no value in waiting another month to have a 13-month discussion versus a 12-month discussion,” he said.

Rabhi stressed that he appreciated that Ping had started the discussion. He noted that the board rules call for introducing an item at the ways & means meeting, then waiting until the board meeting two weeks later for a final vote. The board rules allow for a process to handle it in one night, but it’s more common to do it on different nights. That’s why he’s comfortable postponing the item until July, Rabhi said.

D. Smith noted that during the summer months, the board meets only once a month. It’s typical during the summer for the board to handle all agenda items by taking both an initial and final vote on the same evening.

Outcome on postponing until July 10: The board voted 6-3 to postpone, with dissent from Alicia Ping, Kent Martinez-Kratz and Dan Smith.

Bond Proposal

Aside from the unanticipated court budget discussion, the major item on the June 5 agenda concerned the proposed bond issue to cover the county’s retiree obligations. The meeting included the first of two public hearings on the potential $345 million bond proposal. A second hearing is scheduled for July 10, when the board will likely take action on the proposal.

The proposed bond issue of up to $345 million, the largest in the county’s history, is intended to cover unfunded pension and retiree healthcare obligations from the Washtenaw County Employees’ Retirement System (WCERS) and Voluntary Employees Beneficiary Association (VEBA) – the defined benefit pension and retiree healthcare plans. Those plans will be closed to employees hired after Jan. 1, 2014.

The proposal had first been mentioned publicly in mid-April, though the administration has been working on it since November of 2012, and commissioners had discussed it in closed session earlier this year as part of the county’s negotiations for new labor contracts. For background, see Chronicle coverage: “County Board Debates $345M Bond Proposal” and “County Budget, Bonding Decisions Loom.”

The original plan called for taking an initial vote on May 15 authorizing the publication of a “notice of intent” for the bond issue, with final approval on June 5. Responding to concerns about the speed at which the process was moving – without the opportunity for sufficient public input – board chair Yousef Rabhi pushed back the timetable. Now, it’s expected that a resolution to issue the notice of intent will come before the board on July 10 for initial – and possibly final – approval. This is a standard step in the bonding process, letting residents know that they have 45 days during which they can circulate petitions to require a vote of the people before any bonds are issued.

The board scheduled a working session on June 6 focused on the bond proposal. Participating in the session were: Jens Stephan, accounting professor at Eastern Michigan University; John Axe, the county’s bond counsel; and Larry Langer of Buck Consultants LLC.

In addition, other forums for public input are scheduled:

• Saturday, June 15: 4-6 p.m. “Bonding over Coffee” with Yousef Rabhi at Espresso Royale, 214 S. Main St., Ann Arbor.
• Wednesday, June 26: 4-6 p.m. “Bonding over Coffee” with Yousef Rabhi at Caribou Coffee, 1423 E. Stadium Blvd. (corner of Packard and Stadium).
• Thursday, June 27: 4:30 p.m., public forum with county administrator Verna McDaniel at the Learning Resource Center, Room A, 4135 Washtenaw Ave., Ann Arbor.

Bond Proposal: Public Hearing & Public Commentary

Four people spoke at the June 5 public hearing.

Doug Smith spoke in strong opposition to the bonding proposal – both during the public hearing, and during the general public commentary. In addition to paying $239 million in interest, the move would downgrade the county’s bond rating, he argued, which means that every dollar that’s borrowed in the next 25 years will cost more in interest. It’s a very expensive way to kick the can down the road. He noted that the alternative put forward is to cut jobs. He suggested that cutting the overtime of the sheriff’s secretary would equate to more than a full-time employee. The county should find cuts in its budget long before it borrows money, Smith said.

From left: Former county commissioner Wes Prater and current commissioner Kent Martinez-Kratz of Chelsea (D-District 1).

Smith wondered how borrowing money, which the county would have to pay interest on, is somehow going to solve the county’s problems. He said he didn’t quite understand what the county was doing. There’s no revenue associated with the bonding, he noted – it’s not like building something that will generate money to help pay off the bond. At minimum, he suggested, the county should take a variety of approaches, including budget cuts and tax increase. There needs to be a combination to avoid putting the county $600 million worth in debt, he concluded.

Thomas Partridge said it was unjust, unfair and anti-democratic that the county had presented only one plan. He pointed out that the county has additional time to look at this issue, and that there are other options – including the option of putting a millage on the ballot to pay for these retiree obligations. Partridge called that a good alternative. Another option is to tighten the county’s budget even further, and downsize the county services, but that’s too much in line with Mitt Romney, he said.

Kathy Fojtik Stroud recommended that the board investigate the possibility of a new millage. She said the gossip in her neighborhood was that the board would put a millage proposal on the ballot to pay for these retiree obligations. It would give the citizens an opportunity to vote on it.

Wes Prater started by thanking the board and staff for slowing down the process, and for bringing in experts to discuss the issue. It was a wise thing to do, he said. He asked about the timing of the new actuarial reports – when would those be completed? If they don’t have those reports, how can they make an informed decision? He argued that the legislation that enabled this type of bond sale hadn’t been created with sufficient research. Other than this particular exception to bond for retiree obligations, Michigan’s municipal finance act only allows for bonding to fund capital improvements without a vote of the people, he said. More research is needed, he concluded.

Bond Proposal: Communications & Discussion

During the county administrator’s report, Verna McDaniel said she’d been communicating about the bond proposal with township officials, county employees and the public.

Felicia Brabec, chair of the board’s ways & means committee, reviewed activity related to developing a four-year budget for the county, from 2014-2017, including outreach efforts for the bond proposal. She laid out the timeline for items coming before the board that relate to the bond proposal. Action on July 10 will include:

• Vote on a “notice of intent” to issue the bonds. This is a standard initial step in the bonding process, letting residents know that they have 45 days during which they can circulate petitions to require a vote of the people before any bonds are issued.
• Vote the bond resolution and “continuing disclosure” resolution. The board will be asked to set a maximum amount for the bond. The continuing disclosure resolution is standard for all bond issues over $1 million, and indicates that the county will provide updated financial information annually during the term of the bond.
• Vote to create an intermediate trust. The trust will receive the bond proceeds, and trustees will be appointed to oversee the money managers that will be hired to handle the investments.

Brabec said that if these items receive initial approval on July 10, they’ll be forwarded for a final vote at a special board meeting set for July 24. [It's also possible for the board to decide to take a final vote on the items that same night.]

Felicia Brabec of Pittsfield Township (D-District 4) is chair of the county board’s ways & means committee.

Board chair Yousef Rabhi highlighted his “Bonding over Coffee” meetings in Ann Arbor. Rolland Sizemore Jr. wanted someone to hold a similar session on the east side of the county. Rabhi noted that he had scheduled his coffee hours to make it convenient for constituents in his Ann Arbor district – and that’s why the sessions were located in Ann Arbor, not elsewhere in the county. Rabhi wondered if McDaniel’s June 27 public meeting at the Learning Resource Center, just east of Carpenter Road, was far enough east to serve resident on that side of the county. Sizemore indicated that the LRC meeting would suffice.

Alicia Ping also put in a request to hold a public forum on the county’s west side, saying that she and Kent Martinez-Kratz – who represent districts in southwest and west Washtenaw, respectively – would appreciate it. McDaniel agreed to set something up.

Later in the meeting, Sizemore complained that he has asked the administration for alternatives to the $345 million bond proposal, but none have been presented. He suggested that there are other budget items that could be cut, such as overtime or providing less expensive cars to employees.

Sizemore also wanted the administration to provide a summary that would “dummy down” the proposal to make it easier for commissioners and the public to understand.

Ronnie Peterson wondered if the county would be borrowing more than the amount of its pension and retiree health care obligations. Curtis Hedger, the county’s corporation counsel, replied that it isn’t legally possible to bond for more than the amount of those obligations. However, the amount won’t be known until the actuarial reports are completed in late June. Hedger noted that the bond counsel and financial consultant had been very conservative when they estimated that the county would need up to $345 million. The administration is hoping that the actual amount will be lower than that.

Peterson also asked where the money would come from to make the bond payments. County administrator Verna McDaniel answered in a general way, saying the funds would come from monies that the county already collects, as well as from the bond proceeds. Each department will make a contribution to those obligations, she said. Those amounts will be reflected in the budget, starting in 2014. Peterson said he wanted to make sure the county would be able to meet its obligations, without any massive reduction in services or layoffs. He wanted everyone to understand clearly where those bond payments are coming from.

Conan Smith asked for the amount of the county’s current bond payment for those retiree obligations. McDaniel clarified that the county doesn’t currently have a bond for that, but it does make annual contributions to cover those obligations. The most recent payment was $20 million, she said. Without the bonding, the 2014 payment will be higher, she noted.

C. Smith pointed out that the bond is structured so that annual payments over the 25 years will range from between $12 million and $26 million. But the county’s actuarial contributions might be as high as $30 million a year during that time, he said – that’s what the actuarial study will project. If the county bonds, its payment will show up on the books as a line item for bond payments. If the county doesn’t bond, it will show up as an unfunded liability, he said.

Peterson noted that some of the current payments for retiree obligations are made from federal and state grants that support certain county programs. But over the course of the 25-year bond, there will be possibly 5 or 6 new U.S. presidents, he said, and 4 or 5 new governors. These changing administrations could have an effect, because the county relies so much on federal and state dollars, Peterson said. Only about half of the county’s entire budget is tied to the general fund, he noted. The rest is from federal and state funding, and in that regard the county is at the mercy of other governments. Whenever that funding is reduced, it impacts the county’s ability to make retiree contributions.

Peterson said he was concerned about the county’s ability in the future to make bond payments out of the general fund, if federal and state funding is cut. That could result in massive layoffs, he noted, because the county will be obligated to pay the bond. “This bond will supersede anything else we do,” he said. Referring to the county’s possible shift to a four-year budget cycle, Peterson said he didn’t know how that could work, given the uncertainty of federal and state funding. He said he’s not “throwing bricks” at the administrator – it’s the board’s responsibility.

Commissioners Dan Smith of Whitmore Lake (R-District 2) and Andy LaBarre of Ann Arbor (D-District 7).

Conan Smith thanked Peterson for bringing up this point. He noted that part of the revenue stream for paying off the bond would come from current employees who are in the defined benefit plan, and who are contributing to that plan. So the portion of those employees who are in non-general fund programs – supported by state and federal funding – are less under the county’s control. If that funding is cut, the county would likely need to eliminate those jobs, he said, which in turn will eliminate the contributions that those employees make toward retirement obligations. It’s an element of risk that’s outside the county’s “zone of control,” he said. But that risk declines over time, and is predictable, he added. The county knows the number of employees who are in the plan, and how much they contribute.

C. Smith asked McDaniel if she could provide information about the scope of the risk that Peterson had identified, in case the board decides to develop a contingency plan for the loss of state and federal funding. It’s not an actuarial question, he noted. It’s a matter of identifying the number of employees in non-general fund programs, and how much they would contribute to the bond payment strategy. If all of those employees were to disappear, what would that do to the revenue stream for repaying the bond? he asked.

McDaniel replied that if those jobs are eliminated, some of the retiree obligations will be eliminated too – because not all employees would be vested. C. Smith still wanted to get a sense of what the range of risk might be.

Dan Smith noted that if the county issues bonds and jobs are subsequently eliminated because of a cut in federal or state funding, the obligations for those employees don’t go away – because the county would be repaying the bonds, not the retiree obligations. The only opportunity to discharge that obligation is when the bonds are called. “The fact that we have issued bonds makes all these liabilities – these soft liabilities – it turns them into a real hard honest-to-goodness liabilities that we must pay.” Those bond payments must be made on schedule, he said, no matter what.

Outcome: This was not a voting item. The board is expected to take action on the bond proposal – and to hold another public hearing – at its July 10 meeting.

Facilities Plan

A strategic space plan was on the June 5 agenda for initial approval, laying out a range of infrastructure projects for Washtenaw County government facilities totaling about $5 million. The proposals include redeveloping the Platt Road site where the old juvenile center was located.

Projects include:

• Demolish the former juvenile center and explore redeveloping the site at 2260 and 2270 Platt Road in Ann Arbor for affordable housing, alternative energy solutions, and county offices.
• At 200 N. Main in Ann Arbor, consolidate the land records from the building’s lower level to the 1st floor, and remodel the lower level to accommodate administrative offices.
• At 220 N. Main in Ann Arbor, repurpose space in the garden level, including redesigning conference room space.
• At 110 N. Fourth in Ann Arbor (known as the Annex), relocate the Office of Community and Economic Development, Office of Infrastructure Management, and the Public Defender’s office to other leased and county-owned space. For example, the Public Defender’s office will be relocated to the City Center building at the southwest corner of Fifth & Huron.
• At the county’s service center near Washtenaw and Hogback, redesign the Learning Resource Center (LRC) as a full conference center, providing county-owned space for large and small meetings. Also, make parking improvements, including adding 110 new spaces, rebuilding the lot between the LRC and the courthouse, and resurfacing the entry drive off of Hogback.
• At a location to be determined, develop a specialty vehicle storage facility for the sheriff’s office and other departments.

According to Greg Dill, the county’s infrastructure management director, no general fund dollars will be used for the projects, which are estimated to cost about $5 million.

Greg Dill, Washtenaw County’s infrastructure management director.

Funding will come from several sources: (1) $1 million from the 1/8th mill fund balance; (2) $650,000 from the facilities operations & maintenance fund balance; (3) $650,000 from the Office of Community & Economic Development reserves; (4) $500,000 from the tech plan fund balance; and (5) $2.2 million from the county’s capital reserves. Dill had briefed commissioners on the plan at a March 20, 2013 working session.

In addition to the projects listed above, other changes will be made to accommodate the county’s Community Support and Treatment Services (CSTS) unit, which provides contract services to the Washtenaw Community Health Organization (WCHO). The WCHO will pay for that facilities work, including moving the entire Adult MI program staff to the Annex at 110 N. Fourth; repurposing vacated space at 2140 Ellsworth for Youth and Family Services; and relocating all “service delivery” units to the 1st floor of the Towner II building at 555 Towner Street in Ypsilanti.

Facilities Plan: Board Discussion

Felicia Brabec asked about the amount of funding provided by OCED, and confirmed with Greg Dill that it was an estimate for moving costs. If the move doesn’t cost that much, she asked, what happens with the extra funds?

Dill replied that the entire plan is based on initial estimates. The staff will make adjustments as the projects move forward, and if the cost for OCED is less than estimated, the money will return to the OCED reserves.

Most of the remaining board discussion focused on the Platt Road property. Conan Smith asked Dill to talk about the process of developing a plan for that site.

The first phase is to demolish the buildings on the property, Dill explained. The county had issued an RFP (request for proposals) and is now in the process of selecting a firm for that work. The second phase would be developing a plan for the site. Dill said he’s had several conversations with board chair Yousef Rabhi about that, including the likelihood of a steering committee to guide the process. Dill expected that he’d return to the board later this year with an updated proposal for that site.

In response to a query from Ronnie Peterson, Dill described the plan for Platt Road as still very early in the process. The staff first wanted to get the space plan approved and the funding settled, he said. Then there would be discussion about who should serve on the Platt Road steering committee and what their charge should be. Dill planned to work with Rabhi on that, but it would be brought back to the board for action.

Rabhi added that Andy LaBarre would be involved as well, since the site is in District 7, which is represented by LaBarre. Rabhi noted that LaBarre is interested in engaging neighbors and others in that area about the site’s future.

Peterson thanked Rabhi for the information, adding that “I wish I was invited to more things that happen in my district.” A lot of county activity happens in his district and in Rolland Sizemore Jr.’s district, Peterson said, “and I sometimes read it in the newspaper.” [Sizemore and Peterson represent districts 5 and 6, respectively, primarily covering Ypsilanti and Ypsilanti Township.]

Peterson said it seemed the Platt Road property might be put up for sale, because the space plan indicated affordable housing on the site. But “we’re not in the housing business,” he said. Peterson felt that the resolution before the board that night was indicating an intent to sell. Dill replied that a decision to sell hasn’t been determined. The only action that the board would be taking that night was to demolish the two structures on the site.

Before the July 10 final vote, Peterson wanted to know exactly where the funding for the overall plan would be coming from, and how much would remain in the fund balances and reserves.

Sizemore wanted more detail about the specific projects, like how much the demolition of the Platt Road buildings would cost. Dill offered to prepare a supplemental document with that information. Sizemore complimented Dill and his staff for their work on the Platt Road property, saying that he enjoyed seeing community gardens there.

In general, Sizemore expressed his view that the county doesn’t need new buildings, so he wouldn’t support any plan that included building new offices. He noted that there are vacant school buildings that might be available for use in certain parts of the county.

Sizemore also urged Dill to find opportunities to involve youth. Dill replied that his staff looks for opportunities for job shadowing and other youth involvement in every aspect of the county’s operation, not just this space plan. Sizemore acknowledged that Dill has been helpful in that regard. He also noted that the Washtenaw International High School is looking for summer internship opportunities.

Conan Smith recalled the lengthy discussion on the overall space plan that was held at the board’s March 20, 2013 working session, saying that he had the materials from that session. He wondered if there was another document that articulates the strategic infrastructure plan. Dill indicated that the same materials from the working session were the basis for the current plan.

Smith then noted that in the conversations he’s had with Dill, they hadn’t talked about divesting the Platt Road property. “We have not talked about that,” Dill confirmed. “Of course that is a decision that this body will undertake. We made no plans for the disposal of that property, except to get a formal appraisal of the site.”

Smith also confirmed with Dill that the vote being taken that night was to approve a planning process for the site, as well as demolition of the buildings.

Outcome: The board unanimously gave initial approval to the facilities space plan, with a final vote expected on July 10.

Millage Rates

The board had given initial approval on May 15, 2013 to set Washtenaw County’s 2013 general operating millage rate at 4.5493 mills – unchanged from the current rate. The item was on the June 5 agenda for a final vote.

Several other county millages were part of the same resolution and are levied separately: emergency communications (0.2000 mills), the Huron Clinton Metroparks Authority (0.2146 mills), two for county parks and recreation (0.2353 mills and 0.2367 mills) and for the natural areas preservation program (0.2409 mills). That brings the total county millage rate to 5.6768 mills, a rate that’s also unchanged from 2012.

This is an annual procedural action, not a vote to levy new taxes. With a few minor exceptions, the county board does not have authority to levy taxes independently. Millage increases, new millages or an action to reset a millage at its original rate (known as a Headlee override) would require voter approval.

The rates will be included on the July tax bills for property owners in Washtenaw County.

Millage Rates: Public Hearing

The only speaker at a public hearing on the millage rates was Thomas Partridge. He said the millage revenues were insufficient to provide for the needs of county residents. The board has been bereft of ideas to support affordable housing, public transportation, health care and other needs, he said. He suggested proposing a Headlee override.

Outcome: Without discussion, the board gave final approval to set the county’s millage rates.

Gun Violence Awareness

Commissioners were asked to pass a resolution declaring June 2013 as Gun and Societal Violence Awareness Month.

The resolution stated that the board “supports President Barack Obama’s continued efforts to reduce gun violence through enhanced background checks, restricted sales of some types of ammunition and high capacity magazines; and … further supports the reduction of societal violence through the development of proactive programs that will educate citizens on non-violent conflict resolution and allow physicians to prevent firearm and other violence related injuries through health screening, patient counseling, and referral to mental health services for those with behavioral or emotional medical conditions.”

According to county records, applications for concealed pistol licenses in Washtenaw County have increased dramatically so far this year. There were 1,510 applications for the first four months of 2013, compared to 717 applications during the same period in 2012. For the full 12-month period in 2012, the county received 2,153 applications – compared to 546 in 2007. [.pdf of application data from 2004-2013] [.pdf of approved licenses from 2008-2013]

The June 5 resolution was brought forward by board chair Yousef Rabhi and commissioner Conan Smith – both Democrats representing districts in Ann Arbor.

Gun Violence Awareness: Public Commentary

Kathy Fojtik Stroud of Ann Arbor spoke at the beginning of the June 5 meeting, and started by telling commissioners that she had figured out why the boardroom felt smaller – there were only nine commissioners now, compared to previous years when there had been more commissioners. [Redistricting took effect with the 2012 election, reducing the number of Washtenaw County districts from 11 to 9.]

Stroud was speaking on behalf of the Washtenaw County health code appeals board, an appointed body on which she serves. That board had passed a resolution urging county commissioners to pass the resolution in support of reducing gun violence and societal violence. Other groups – including the Interfaith Council on Peace & Justice, a lot of churches and other organizations – are supportive of this action, she said.

Andy LaBarre (D-District 7) noted that Stroud had served on the county board of commissioners in the 1970s, and he appreciated her service.

Gun Violence Awareness: Board Discussion

Yousef Rabhi highlighted the resolution, noting that there have been some very tragic gun-related deaths in the past few months. He thought that Washtenaw County should take a step in recognizing these acts as horrific, and in recognizing the need for the country to move forward with some sort of reform that can bring an end to this type of violence. He hoped commissioners would support it. There was no further comment from commissioners.

Outcome: The board unanimously passed the gun violence resolution.

SEMCOG Long-Range Plan

Yousef Rabhi also brought forward a resolution opposing the 2040 long-range regional transportation plan developed by the Southeast Michigan Council of Governments (SEMCOG). Specifically, he opposes the recommendation to expand I-94 in Detroit and I-75 in Oakland County.

The resolved clauses stated:

NOW THEREFORE BE IT RESOLVED that the Washtenaw County Board of Commissioners opposes the inclusion of these highway capacity expansion projects in the 2040 Long-Range Plan.

BE IT FURTHER RESOLVED that the Washtenaw County Board of Commissioners requests that funding currently programmed for these capacity projects be redirected to preventive maintenance and rehabilitation of existing roads and bridges, addressing critical safety needs, and enhancing quality of life.

BE IT FURTHER RESOLVED that this resolution be transmitted to SEMCOG, the Michigan Department of Transportation, and State Senators Randy Richardville and Rebekah Warren, and State Representatives Gretchen Driskell, Jeff Irwin, David Rutledge, and Adam Zemke in advance of SEMCOG’s June 20, 2013, General Assembly meeting.

Rabhi noted that he had raised this issue at the board’s May 15, 2013 meeting. His concerns are social and environmental. The region shouldn’t be building more roads for cars. Instead more alternative forms of transportation should be built. The highway system has already destroyed neighborhoods and impeded economic development in certain areas, and this expansion would only continue that.

A more conservative mindset, Rabhi said, would argue against investing in new infrastructure at a time when governments can’t maintain the existing infrastructure – including a crumbling bridge and road system. At SEMCOG’s executive committee meeting in May, Rabhi said he voted against the long-range plan, and he intends to vote against it at the entity’s general assembly later in June. He believes that both progressive and conservative minds can find reasons to oppose this plan.

Rolland Sizemore Jr. wondered how this plan related to the southeast Michigan regional transit authority (RTA), of which Washtenaw County is a part. He hoped the board would hold a working session on the RTA soon.

Rabhi explained that since SEMCOG’s funding can’t be used for transit, it doesn’t affect the RTA. It must be used on roads, but it could be used for repair rather than new construction, he said.

Conan Smith said he shared Rabhi’s concerns. The Washtenaw County road commission has a list of unfunded needs totaling $82 million. He criticized the idea that some of those dollars would be used to build new infrastructure at a time when the demand isn’t there, even based on SEMCOG’s own population projections.

Outcome: Commissioners unanimously approved the resolution opposing SEMCOG’s long-range regional transportation plan.

Dexter Annexation

Commissioners were asked to set a public hearing for July 10, 2013 regarding the annexation of land from Scio Township into the village of Dexter. Commissioners are expected to vote on the annexation that same night.

According to the county’s corporation counsel, Curtis Hedger, the annexation of township property into a village is one of the few instances that requires county board approval. Generally, annexation is handled by the individual municipalities where the annexation occurs.

A letter to the county from Dexter village manager Donna Dettling states that the annexation request – for a 16.66-acre property – was made by the property owner, Dexter Fastener Technologies, known as Dextech. The land is adjacent to the Dexter Business & Research Park, where Dextech hopes to expand. The company is one of Dexter’s largest employers.

On May 13, 2013, the Dexter village council unanimously passed a resolution in support of the annexation. The resolution indicates that although the Scio Township board did not take formal action about the request, there was generally support for the action. [.pdf of communications from Dexter regarding the annexation]

Outcome: Without discussion, commissioners set the annexation hearing for July 10.

Jarvis Stone School

The county board was asked to designate Jarvis Stone School in Salem Township as an historic district. The building is a former one-room schoolhouse built in 1857 and located at 7991 North Territorial Road.

Specifically, the board was asked to approve an ordinance that designates the 1.42-acre property as an historic district under the jurisdiction of the Washtenaw County Historic District Commission. [.pdf of proposed ordinance] The property is owned by the Salem Area Historical Society, which uses the school as its headquarters. It would be the second historic district in Salem Township. The first one is Conant Farm on Napier Road.

The Salem Township board had granted a request to consider the property as an historic district in 2011. And at its Oct. 19, 2011 meeting, the county board voted to establish a study committee regarding the request. That report was completed this year. [.pdf of study committee report]

Jarvis Stone School: Public Commentary

Terry Cwik, president of the Salem Area Historical Society, described the process that had been undertaken, calling it a team effort of a volunteer group. Cwik praised two county staff members – Cynthia Christensen and Melissa Milton-Pung – who had provided guidance on developing the final report. About 25-30 people had attended a public meeting in January about this project, giving only positive feedback and input, he said. And the Salem Township board has voted unanimously in support of the ordinance to create the historic district. Cwik hoped that commissioners would make Jarvis Stone School the county’s 13th historic district, and that the county would continue to preserve its past into the future.

Marcia Van Fossen, vice president of the Salem Area Historical Society, also spoke in support of the new district. She noted that a previous member of the county board lives in Salem Township, and she hoped that it would influence the board’s decision to approve the new district. [Van Fossen was alluding to Alma Wheeler Smith, who is also the mother of current county commissioner Conan Smith.]

In responding to Van Fossen’s remarks, Conan Smith quipped: “My mom told me to vote yes.”

Alicia Ping thanked Cwik and Van Fossen for their work, noting that she had served on the Saline Historical District Commission for 11 years. It takes a lot of work to make something like this happen, she said.

Jarvis Stone School: Board Discussion

Conan Smith questioned why this proposal wasn’t first brought forward for initial approval at the board’s ways & means committee meeting, rather than just receiving one final vote at the board meeting that night. Curtis Hedger, the county’s corporation counsel, explained that because the county doesn’t have original jurisdiction over historic districts, this type of resolution has always gone directly to the board meeting. He explained how the process works. First, a local government where the proposed historic district would be located contacts the county, starting the process in motion. The county’s historic district commission studies the proposal, then makes a recommendation to the county board.

Hedger said he’s reviewed all the previous historic districts that the county has created, including Gordon Hall in the Dexter area. The county is simply doing what it’s contractually obligated to do, he said. Although the county is creating a new ordinance, it’s a very specific type of ordinance, outlined in the state enabling legislation for county historical district commissions.

Smith said he was fully supportive of creating the district for Jarvis Stone School, but he was concerned that there hadn’t been sufficient public notice about it. He asked for the opinion of Dan Smith, who represents District 2, where the historic school is located.

Dan Smith replied that he had received emails from Terry Cwik of the Salem Area Historical Society, notifying him that this process was moving forward. D. Smith indicated that others in the community had been contacted as well about the process.

Outcome: The board unanimously approved creating the Jarvis Stone School historic district.

Community Corrections Plan

At their June 5 meeting, commissioners were asked to approve an annual community corrections plan with a $1,042,468 budget for FY 2013-14 – from Oct. 1, 2013 through Sept. 30, 2014. [.pdf of community corrections plan]

The community corrections division is a unit of the Washtenaw County sheriff’s office, with an emphasis on programs and services aimed at keeping people out of jail by providing sentencing options for the Washtenaw County trial court – including pre-trial services, drug testing, electronic monitoring, and social education. The funding comes from several sources: (1) $421,900 in state revenue; (2) $260,890 in program-generated fees; (3) $240,983 in appropriations from the county’s general fund; and (4) $118,703 from fund balance.

According to a staff memo, an estimated 99,365 jail bed days were saved in 2012, for an estimated savings of $8.446 million – based on an estimate of $85 per day for incarceration. [.pdf of staff memo]

Outcome: Without discussion, commissioners gave both initial and final approval to the community correction plan.

Brownfield Public Hearings

On the agenda were resolutions to set public hearings for July 10 regarding two brownfield redevelopment projects in Ann Arbor – at Packard Square (the former Georgetown Mall), and 544 Detroit St.

Since the city of Ann Arbor joined the Washtenaw County Brownfield Redevelopment Authority (WCBRA) in 2002, brownfield projects located in the city must receive approval by the county board. The state’s brownfield program offers incentives for redevelopment of property that’s contaminated, blighted or “functionally obsolete.”

The 544 Detroit St. project is seeking brownfield status so that it will be eligible for brownfield tax increment financing. The site plan calls for a three-story “flatiron-style” building, located at the triangle tip of Detroit and North Division, just southwest of the Broadway bridge – the site of a long-abandoned gas station in the Old Fourth ward Historic District. The new building would include offices on the first floor and residences on the upper two floors. The project’s site plan received a recommendation for approval by the Ann Arbor planning commission on Dec. 18, 2012. Both the site plan and brownfield plan are expected to be on the council’s June 17 agenda, according to city planning manager Wendy Rampson.

For Packard Square, the July 10 hearing relates to a proposed amendment to the project’s original brownfield redevelopment plan, which the county board approved after much debate on May 18, 2011. At that same meeting, the board approved a $1 million grant application to the state Dept. of Environmental Quality for brownfield cleanup at the proposed $50 million development – that grant was later awarded to the project. Demolition is underway, with plans to build more than 200 apartments and 20,000 square feet of commercial space at 2502-2568 Packard Street.

The amendment to Packard Square’s brownfield plan would add eligible activities that qualify for brownfield tax increment financing, including underground parking and urban stormwater management infrastructure. Those activities are now eligible for TIF, following changes by the state legislature to the Brownfield Redevelopment Act 381 in December 2012.

Outcome: The public hearings for both projects were set for July 10, when the county board will likely take action on both brownfield items. The vote on the Packard Square hearing was unanimous. For the 544 Detroit St. hearing, the board’s two Republican commissioners – Alicia Ping and Dan Smith – cast the only votes of dissent. They did not publicly state their reasons for voting against the hearing on that project. In the past, they and other commissioners have expressed concern about the diversion of property tax revenues through TIF districts. While the Packard Square TIF already exists, the TIF for 544 Detroit would be new.

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: Head Start

Dan Smith highlighted an item in the claims report related to Head Start. He asked for a brief update on the situation with Head Start. [For the period April 27 through May 17, 2013, a total of $13,014 had been paid in claims related to the Head Start program.]

County administrator Verna McDaniel reported that federal officials have begun negotiating with the Washtenaw Intermediate School District (WISD) about taking over the local Head Start operation. A notice has been issued to grant WISD the funding to support Head Start, she said. The county has been instructed to negotiate a transfer of assets.

In response to a query from Ronnie Peterson, McDaniel said that leasing the county’s Head Start facility to WISD is probably the best option at this point. Peterson said he was concerned about the location of the Head Start program, and wanted to make sure it stayed close to those who need it most.

By way of background, in 2011 the board voted to relinquish the county’s 46-year administration of the program on July 31, 2012. But the transition to a new administrator – a process overseen by the federal Head Start program – hasn’t moved as quickly as expected. So the county agreed to a one-year extension to continue administering the program, through July 31, 2013.

The county-owned Head Start building at 1661 Leforge in Ypsilanti was built in 2003. The 17,500-square-foot building on 10 acres of land is tied to the early childhood program. The county still owes about $2.6 million on the bond for the building, and makes $167,000 in bond payments annually. The bond payment schedule runs through 2022.

Communications & Commentary: County Budget

Felicia Brabec, chair of the board’s ways & means committee, reviewed activity related to developing a four-year budget for the county, from 2014-2017. Most of the update related to the bond proposal, which is reported earlier in this article.

Rolland Sizemore Jr. noted that Dick Fleece, the city’s public health director, plans to retire at the end of 2013. Sizemore felt it might be a good opportunity to review the entire public health department, before filling that position. He suggested scheduling a working session on that topic.

Communications & Commentary: Road Commission

As liaison to the county road commission, Rolland Sizemore Jr. reported that the commission is forming a committee to look at the condition of roads throughout the county. He’ll be serving on that.

Somewhat related, Sizemore – who also serves on the board of the Ypsilanti Area Convention & Visitors Bureau – had copies of a guide that was put out of routes in Washtenaw County for motorcyclists.

Communications & Commentary: Public Commentary

Thomas Partridge spoke at the evening’s two opportunities for public commentary, in addition to the public hearings reported above. He generally criticized the board for not attending to important issues like affordable housing, public transportation, health care and taking care of the needs of the most vulnerable.

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, July 10, 2013 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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The proposed bond issue of up to $345 million, the largest in the county’s history, is intended to cover unfunded pension and retiree healthcare obligations from the Washtenaw County Employees’ Retirement System (WCERS) and Voluntary Employees Beneficiary Association (VEBA) – the defined benefit pension and retiree healthcare plans. Those plans will be closed to employees hired after Jan. 1, 2014.

The proposal had first been mentioned publicly in mid-April, though the administration has been working on it since November of 2012, and commissioners had discussed it in closed session earlier this year as part of the county’s negotiations for new labor contracts. For background, see Chronicle coverage: “County Board Debates $345M Bond Proposal” and “County Budget, Bonding Decisions Loom.”

The original plan called for taking an initial vote on May 15 authorizing the publication of a “notice of intent” for the bond issue, with final approval on June 5. Responding to concerns about the speed at which the process was moving – without the opportunity for sufficient public input – board chair Yousef Rabhi pushed back the timetable. Now, it’s expected that a resolution to issue the notice of intent will come before the board on July 10 for initial – and possibly final – approval. This is a standard step in the bonding process, letting residents know that they have 45 days during which they can circulate petitions to require a vote of the people before any bonds are issued.

The board is also holding a working session on June 6 focused on the bond proposal. Participating in the session will be: John Axe, the county’s bond counsel; Rowan Miranda, associate vice president for finance at the University of Michigan; Jens Stephan, accounting professor at Eastern Michigan University; and Larry Langer of Buck Consultants LLC. The working session begins at 6 p.m. in the boardroom of the county administration building, 220 N. Main in Ann Arbor.

In addition, other forums for public input are scheduled:

• Saturday, June 15: 4-6 p.m. “Bonding over Coffee” with Yousef Rabhi at Espresso Royale, 214 S. Main St., Ann Arbor.
• Wednesday, June 26: 4-6 p.m. “Bonding over Coffee” with Yousef Rabhi at Caribou Coffee, 1423 E. Stadium Blvd. (corner of Packard and Stadium).
• Thursday, June 27: 4:30 p.m., public forum with county administrator Verna McDaniel at the Learning Resource Center, Room A, 4135 Washtenaw Ave., Ann Arbor.

This brief was filed from the boardroom of the county administration building at 220 N. Main St. in Ann Arbor. A more detailed report will follow: [link]

On May 15, the board also scheduled a special board meeting for July 24, to allow for additional votes and public commentary related to the bond proposal, if needed.

The resolution that originally appeared on the May 15 agenda would have authorized the publication of a “notice of intent” about the bond issue. Several commissioners had previously expressed concern at the timeline, given that the county does not yet have the updated actuarial information it needs to set the specific amount of the bond issue. In explaining the decision to delay this process, Rabhi said he wanted to provide more time for public input, and to move the vote until after the actuarial information has been received. He also announced his intent to hold a series of informal meetings at coffee shops in Ann Arbor to discuss the bond proposal with residents. He’s calling the meetings “Bonding Over Coffee.”

The notice of intent is a standard initial step in the bonding process. It must be published in a “newspaper of general circulation within the county,” and lets residents know that they have 45 days during which they can circulate petitions to require a vote of the people before any bonds are issued. The notice must include a maximum amount of the bond issue, a maximum interest rate, and a maximum term for the bonds.

The amount of the bond issue is an estimate at this point and will not likely be as high as $345 million, according to the county’s bond counsel, John Axe of Axe & Ecklund. To set the specific amount of the bond issue, the county needs updated actuarial information – but those reports won’t be ready until late June. The board is expected to vote on publishing the notice of intent on July 10.

The board has been briefed on this proposal most recently at a May 2 working session. [See Chronicle coverage: "County Board Debates $345M Bond Proposal."] At that time, the county’s bond counsel – John Axe of Axe & Ecklund – had indicated a timeline that included giving initial approval to two other bond-related resolutions on May 15, in addition to the notice of intent.

Those other resolutions were: (1) a resolution setting the bond’s maximum amount; and (2) a continuing disclosure resolution that’s standard for all bond issues over $1 million, indicating that the county will provide updated financial information annually during the term of the bond. However, neither of those two other resolutions were on the May 15 agenda when it was made available to the public prior to the meeting. It’s likely those resolutions will also be on the board’s July 10 agenda for an initial vote.

The bonding is made possible by Michigan’s Public Act 329 of 2012, which the state legislature passed in October of 2012. [.pdf of Public Act 329] The law enables municipalities to issue bonds to cover unfunded accrued pension and retiree healthcare liabilities, but has a sunset of Dec. 31, 2014. The county faces a $30 million contribution toward these obligations in 2014, and is looking for ways to manage that obligation.

The most recent estimates put the county’s maximum retirement obligations at $340.8 million. The board was presented with calculations for borrowing $344 million at an assumed average interest rate of 4%. The county would pay $239 million in interest over the life of the bond, for a total of $583 million in combined interest and principal.

County administrator Verna McDaniel is advocating for this move, in part to make long-term budgeting easier by having predictable bond payments. The bonding is also linked to new 10-year labor deals approved earlier this year, which closed the defined benefit plan to employees hired after Jan. 1, 2014. Unless the defined benefit plans were closed, the county would not have been allowed by law to proceed with this type of bonding.

This brief was filed from the boardroom of the county administration building, 220 N. Main in Ann Arbor. A more detailed report will follow: [link]

From left: Conan Smith (D-District 9) and Dan Smith (R-District 2) at the Washtenaw County board of commissioners meeting on March 20. Dan Smith cast the lone vote against new contracts with labor unions representing county employees, citing concerns over the length of the agreements. Most of the contracts run through Dec. 31, 2023. (Photos by the writer.)

About 85% of the nearly 1,300 county workers belong to a union. The board also approved similar wage and benefit changes for the county’s non-union employees.

The right-to-work law will make it illegal to require employees to support unions financially as a condition of their employment, but labor agreements in place prior to March 28 will not be affected until they expire. Most of the previous contracts with the county’s labor unions were set to expire on Dec. 31, 2013. All but one of the new deals will run for more than 10 years – through Dec. 31, 2023.

Dan Smith (R-District 2) cited the length of those contracts as a reason for casting his no vote – he was the only commissioner to vote against the union contracts, though he supported the agreement for non-union employees. The duration eliminates the flexibility to deal with different conditions that might face the county in the future, he said. There is no “re-opener” clause that would allow either side to renegotiate before 2023.

Despite his no vote, Smith praised the most significant changes that will impact employees hired after Jan. 1, 2014. Those employees will participate in a defined contribution retirement plan, instead of the current defined benefit plan – the Washtenaw County Employees’ Retirement System (WCERS). In defined benefit plans, retirees receive a set amount per month during their retirement. In defined contribution plans, employers pay a set amount into the retirement plan while a person is employed. The most common defined contribution plan is the 401(k). Similar changes in retiree healthcare plans will also affect new employees.

The shift in the county’s approach to retirement plans and retiree healthcare was a major concern for several other commissioners. While acknowledging the benefits of eliminating the county’s legacy costs, Conan Smith (D-District 9) cautioned that retirees could be put at risk without the predictable stability of a defined benefit plan. However, he also noted that the board can’t continue to put the institution at risk by “guaranteeing something that we don’t know we’re going to be able to afford in the long run.”

Those legacy costs were a factor alluded to during the March 20 discussion, linking to another major decision that is expected to come before the board: bonding to cover the county’s unfunded liabilities for employee pensions and retiree healthcare. The issue hasn’t been discussed directly at any of the board’s regular meetings, but commissioners have been informed that a proposal likely will be brought forward by administration.

Based on actuarial valuations at the end of 2011, the county had $101.27 million in unfunded liabilities for its defined benefit pension, and $148.46 million in unfunded liabilities for its retiree healthcare. Those amounts will be higher when the 2012 actuarial valuations are completed later this year. The new accounting standards of GASB 68 require that unfunded liabilities must be included in an organization’s financial statements for fiscal years beginning after June 15, 2014.

Commissioners also got a year-end 2012 financial update during the March 20 meeting – the final 2012 audit will be brought to the board in April. Total revenues exceeded total expenditures by $2.26 million. The county had planned for a surplus of $1.889 million to carry into 2013 – so the year ended with an excess of $327,607 above that targeted amount.

In other action items, the board voted to form a committee that will explore the feasibility of creating a land bank, and appointed three people to the committee: Commissioner Ronnie Peterson (D-District 6), county treasurer Catherine McClary, and Mary Jo Callan, director of the county’s office of community & economic development. The committee is directed to report back to the board by Aug. 7, 2013.

During communications from the board, Conan Smith reported that the southeast Michigan Regional Transit Authority board has now been fully appointed, and will convene on March 28 for an orientation meeting. He suggested that the two Washtenaw County representatives – Richard “Murph” Murphy and Liz Gerber – come talk to commissioners about what the county’s interests and priorities are. “The earlier we weigh in, the more systemic the impact of our comments are going to be,” he said. “If we don’t talk to them until they’ve already made decisions, then it’s going to be too late.”

Labor Agreements

The county administration and labor have been negotiating new contracts since February. At the board’s Feb. 20, 2013 meeting, commissioners had approved a resolution opposing the right-to-work legislation, with a clause that directed the county administration to renegotiate union contracts, as requested by union leaders. The resolution stated a “goal of reaching four (4) year agreements to protect and extend each bargaining unit’s union security provisions, as well as enter into a letter of understanding separate from the existing collective bargaining agreements for a period of ten (10) years.”

That was an approach taken by other institutions statewide, including the Ann Arbor Transportation Authority. [See Chronicle coverage: "AATA OKs Labor, Agency Fee Accords"] However, the county administration and union leaders ultimately felt that the strategy of a separate letter of understanding would be more vulnerable to legal challenges. They opted instead for longer-term labor agreements and no separate letter of understanding.

Since mid-February, the board has held four lengthy closed sessions to discuss labor negotiations – including a closed session near the beginning of the March 20 meeting that lasted over an hour. Labor negotiations are one of the few reasons under Michigan’s Open Meetings Act that public governing bodies are allowed to hold sessions out of public view.

Nancy Heine, president of AFSCME Local 3052, talks with Washtenaw County commissioner Rolland Sizemore Jr. Local 3052 – which represents 48 general supervisors and four supervisors in the juvenile division – agreed to a new five-year contract.

The vote to go into closed session was 8-1, with dissent by Rolland Sizemore Jr. (D-District 5), who did not state any reason for his no vote.

The administration and AFSCME Local 2733 had reached a tentative agreement on March 7, which union members ratified on March 13. Other union bargaining units subsequently ratified similar agreements. However, the ratified agreements differed slightly from the version that had been shown to commissioners at their most recent closed session on March 6, so another closed session was held on March 20 to go over those changes.

In broad strokes, the agreements provide for annual wage increases, a cap on employee healthcare contributions, and the elimination of “banked leave” days. Banked leave days have been used in recent years to help balance the budget by cutting labor costs. The days are unpaid, but don’t affect retirement calculations.

Some of the major changes relate to benefits for employees hired after Jan. 1, 2014. Those employees will participate in a defined contribution retirement plan, instead of the current defined benefit plan – the Washtenaw County Employees’ Retirement System (WCERS). In defined benefit plans, retirees receive a set amount per month during their retirement. In defined contribution plans, employers pay a set amount into the retirement plan while a person is employed. The most common defined contribution plan is the 401(k).

In some ways, the change reverts the county to its previous approach. Until about 2009, employees participated in the Money Purchase Pension Plan (MPPP), a defined contribution plan. Most county employees were shifted from the MPPP to WCERS, the county’s defined benefit plan. The MPPP was never eliminated, but is used primarily for county commissioners who choose to participate in it.

The county will also shift away from a defined benefit retiree healthcare plan for new employees, in favor of retiree health reimbursement accounts (RHRAs).

Most details in the contracts match the agreement reached with AFSCME 2733, the county’s largest bargaining unit, with 630 members. Highlights from the AFSCME 2733 agreement include:

• Restoring 3.85% to an employee’s annual salary in 2014 by eliminating banked leave days. In addition, employees will receive a 2% non-structural salary increase.
• In 2015, there will be a 1% salary increase if county property tax revenues do not rise. However, if tax revenues do increase, employees will receive a salary increase of either 2% (if revenues increase by up to 4%) or 3% (if revenues increase by 5% or more).
• Employees will receive 2% salary increases in 2016 and 2017. The 2016 increase will be structural; the increase in 2017 will be non-structural.
• The remaining years through 2023 alternate in this same three-year pattern of (1) formula increases tied to tax revenues, followed by (2) a 2% structural increase and (3) a 2% non-structural increase.
• Current employees will remain in the county’s defined benefit retirement plan, unless they choose to transfer into a defined contribution plan.
• Employees hired after Jan. 1, 2014 will participate in a defined contribution retirement plan, with each employee providing 6% pre-tax contributions that are matched by 6% from the county. Contributions will increase to 7% in 2016 and 2017, and to 7.5% in 2018 through 2023. Vesting for employer contributions will occur over several years, with workers becoming fully vested after 10 years of employment.
• For current employees, their contributions to the Washtenaw County Employees’ Retirement System (WCERS) – the defined benefit plan – will be capped at 10% in 2014 and 2015. That cap will be lowered to 9% in 2016 and 2017, 8.5% in 2018 and 2019, and 8% in 2020 through 2023.
• The county will adopt state-mandated “hard caps” on health care contributions by public employers. Current workers will pay $75 per month in medical premium-sharing.
• Workers hired after Jan. 1, 2014 will have negotiated health care benefits. Their retirement health care will be handled through retiree health reimbursement accounts (RHRAs), with staggered contributions by the county based on years of employment. The current retiree healthcare plan – the Voluntary Employees Beneficiary Association (VEBA) – is a defined benefit plan.

At the March 20 meeting when commissioners returned from their closed session, they took up the issue of the labor agreements. Dan Smith asked to pull out the non-union agreement for a separate vote. The other six contracts were handled as a group.

The bargaining units that struck new deals are:

• AFSCME (American Federation of State, County and Municipal Employees) Local 2733 Units A, B, C, Juvenile Division, and Juvenile Detention – a total of 630 employees. [.pdf of AFSCME 2733 contract summary]
• AFSCME Local 3052 General Supervisors and Juvenile Division Supervisors – a total of 52 employees. [.pdf of AFSCME 3052 contract summary]
• Assistant Prosecutors Association Units I & II – a total of 24 employees. [.pdf of APA contract summary]
• Public Defenders Association Units I & II – a total of 13 employees. [.pdf of PDA contract summary]
• Michigan Nurses Association Units I & II – a total of 13 employees. [.pdf of MNA contract summary]
• T-POAM (Technical, Professional and Officeworkers Association of Michigan) Units I & II, District Court – a total of 30 employees. [.pdf of T-POAM contract summary]

A similar agreement was on the table for the county’s roughly 225 non-union employees. [.pdf of non-union agreement]

The resolution for non-union workers also provides the same benefits to the county’s five statutory elected officials: Treasurer (Catherine McClary), clerk/register of deeds (Larry Kestenbaum), water resources commissioner (Evan Pratt), county prosecuting attorney (Brian Mackie) and sheriff (Jerry Clayton). It also “aligns” the salaries for the treasurer and clerk/register of deeds to the current salary of the water resources commissioner – $101,685, effective immediately. Previously, the treasurer and clerk/register of deeds earned $98,570 and $101,528, respectively. The sheriff and prosecuting attorney each earn a salary of $119,268.

All of the new contracts contain only one element that takes effect in 2013: An additional banked leave day will be added, and must be used sometime this year. The intent is to ensure that the new contract differs from the previous one during the rest of 2013, to guard against possible legal challenges. If there were no changes in 2013, it could be argued that there were no real contract differences until 2014 – well after the right-to-work law went into effect.

Two bargaining units did not negotiate new contracts – the Police Officers Association of Michigan (POAM), which represents 254 employees, and Command Officers Association of Michigan (COAM), with 33 members. Those public safety employees are exempt from the right-to-work law.

For background on the county’s unions, see Chronicle coverage: “County Board Briefed on Labor Issues.” Most of the current contracts were authorized in September of 2011.

Labor Agreements: Broader Context

These new agreements will be a factor in the budget that’s being developed for 2014, 2015 and beyond. The county administration is hoping that the board will approve moving from a two-year budget cycle to a four-year budget planning process.

Caryette Fenner, president of AFSCME Local 2733.

The administration has projected a $24.64 million general fund deficit over a four-year period from 2014 through 2017. A much smaller general fund deficit of $3.93 million is projected for 2014, but county administrator Verna McDaniel hopes to identify $6.88 million in structural changes for that year – a combination of new revenues and cuts in expenditures – in order to eliminate the cumulative deficit going forward. When McDaniel briefed commissioners on budget preparations at their Jan. 16, 2013 meeting, she indicated a desire to find $2.62 million in reductions to employee compensation and benefits.

The county also faces a challenge due to its unfunded liabilities related to employee pensions and retirement healthcare. New Governmental Accounting Standards Board (GASB) standards, enacted in 2012, require that public employee pension liabilities be reported on an organization’s balance sheet. Expenses related to pensions and retirement healthcare are projected to spike in the coming years.

Based on actuarial valuations at the end of 2011, the county had $101.27 million in unfunded liabilities for its defined benefit pension, and $148.46 million in unfunded liabilities for its retiree healthcare. Those amounts are expected to be higher when the 2012 actuarial valuations are completed later this year.

The administration plans to propose dealing with those unfunded liabilities by issuing bonds to cover those costs. Although the county would be taking on significantly more debt as a result – and incurring interest expense – the idea is to take advantage of low interest rates and create a “smoothing” of payments over a more extended period.

The board has not directly discussed this possibility at any of its public sessions. John Axe of Axe & Ecklund – a Grosse Pointe Farms firm that serves as the county’s bond counsel – has attended at least one closed session of the board this year, when labor negotiations were discussed.

In response to an email query from The Chronicle, Tina Gavalier – a financial analyst for the county – described how the new contracts and bonding could affect the upcoming budget:

The preliminary estimated cost savings from these deals in terms of the settled contracts and the anticipated bonding for retiree health care and defined benefit pension obligations is approximately $2.1M per year. The savings is likely to increase or compound over time. The estimated cost savings is preliminary because of the basis of calculations used the 2011 actuarial valuation reports. Savings estimates will be finalized after the 2012 actuarial valuation reports are published (anticipated to be in late May or early June).

If the authorization to bond is approved by the Board of Commissioners and bonding is successful, $2.1M of the $2.62M reduction target for employee compensation and benefits will have been met.

The $2.62M was based on the preliminary financial state of the county presented in January. The updated financial state of the county will be presented in May after the equalization report is issued in April. Therefore, reduction targets may be modified based on the updated financial state of the county presentation.

Labor Agreements: Board Discussion

Before the March 20 vote, Conan Smith (D-District 9) began the board discussion by saying the contracts represent “a very, very substantial change in the way the county does business.” He thought it was important for the public to know the details. In large part, the county is moving away from a defined benefit pension system and back into a defined contribution system, he noted. This introduces substantial volatility for county retirees, he said, and does not provide for predictable stability that a defined benefit plan would. He appreciated that county administration has been “keenly sensitive” to the impact of that change.

The fact is that in moving out of a defined benefit plan, C. Smith said, “we are able to eliminate substantive legacy costs for the organization, which will create an enormous opportunity for us to do alternative types of investing to the community’s benefit at large.” It comes at the cost of introducing risk into the retirement system for employees, but after weeks of heavy debate, he said, he felt the county had created the best defined contribution program that they could. “It’s not the thing that I want,” he added, saying he’d prefer that the county keep its pension plan.

County commissioners Conan Smith (D-District 9) and Alicia Ping (R-District 3).

C. Smith said the process of reaching this decision was “interesting, open and thorough.” For years, he said, the county’s approach to labor negotiations has been remarkable in this way. The county was one of the first local governments to institute an interest-based bargaining process, “which was revolutionary,” he said. Smith noted that when county administrator Verna McDaniel was HR director for the county, he had asked her to teach members of the Michigan Suburbs Alliance about this approach. [Smith serves as executive director for the alliance, which is based in Ferndale.] So despite the fact that he’s disappointed about moving out of the defined benefit system, Smith said he’s very supportive of the contracts because he respects the negotiating process that was used.

C. Smith said he hoped the board and administration would be attentive to retiree health care. These new contracts are moving way from a defined benefit approach to retiree healthcare, and using another kind of investment system instead. [Smith was referring to retiree health reimbursement accounts (RHRAs), for employees hired after Jan. 1, 2014.] This is probably the most important thing that the county can do financially, he noted, because they have no control over the volatility of health care costs, which have been skyrocketing. He hoped that national responses to rising health care costs will have an impact, “but we don’t know that.” So the board can’t continue to put the institution at risk by “guaranteeing something that we don’t know we’re going to be able to afford in the long run.”

The proposal to move out of guaranteed retiree health care is dramatic, C. Smith said, and will likely pose significant challenges to employees. Both administration and the board will need to be very attentive in the coming years to ensure that this new system will provide the right kind of security. He said it’s the right move fiscally for the county.

These are big changes, C. Smith concluded. He thanked other commissioners and the administration for “bearing with me through my panic modes.” He described the solution as decent. It’s “imperfect, in my opinion, but quite good – B+.”

Dan Smith (R-District 2) spoke next. As with all contracts and negotiations, you end up with things you like and things you don’t like, he said. In this case, there are some things that he liked a lot. “And then, as these things go, there are things you don’t like so much.” It’s important to look at the entire document as a whole, he said.

The thing that made D. Smith uncomfortable is that most of the contracts are long-term – more than 10 years. “That is very likely longer than the service of most of us sitting around this table,” he said. A 10-year contract “severely binds future boards and dramatically eliminates the flexibility that they have to respond to situations that may face them seven or eight years down the road.” There are some benefits to that as well, Smith noted, but he’s not able to find enough data or information that would make him comfortable with that length of time. It would be different with a two-year contract, which gives the county the chance to respond to changing conditions, he noted. With a 10-years contract and the unknowns surrounding the costs and benefits of the various provisions, “I’m just not comfortable moving forward with that at this time.”

D. Smith also cited concerns about legal questions “that continue to nip away at this.” He wished the legislature would just leave this issue alone, but instead they continue to pick at it “week after week after week.” He didn’t know how it will play out, but “I do know that if we did this contract in the traditional way … we wouldn’t have a bull’s-eye on our back for that.”

D. Smith said he wouldn’t be supporting the union contracts. He appreciated the time and effort that the administration had put in to reach these agreements so quickly. He was very pleased with some of the provisions, and looked forward to seeing how those played out. But 10 years is too long a time to risk taxpayer dollars, he said. He realized there were competing interests – taxpayers, employees, the services that the county provides to citizens – that all have different needs. He realized that the new contracts try to address those needs in various ways, but he wasn’t comfortable with it in its entirety. He concluded by thanking the administration, and saying he was sorry he couldn’t support the contracts.

Andy LaBarre (D-District 7) expressed support for the contracts. The final product included the “varied thinking on this board,” he said. Hearing some of the issues raised by Dan Smith had been “exceedingly helpful,” LaBarre said. The flip side of concerns related to the 10-year length is the stability that these contracts bring – or at least the certainty of knowing the costs and benefits, for both the county and its employees.

Commissioners Felicia Brabec (D-District 4) and Yousef Rabhi (D-District 8).

LaBarre said Conan Smith did a laudable job in acting as a “conscience” on the real-life impact of the county’s workforce. LaBarre also thanked commissioners Felicia Brabec (D-District 4) and Yousef Rabhi (D-District 8) for providing the framework to reach this final contract. [Rabhi serves as board chair; Brabec is chair of the board's ways & means committee.] “It’s an imperfect but very workable solution that I believe is in the long-term best interests of the county,” he concluded, “and most importantly, the long-term best interests of the citizens we serve.”

Rabhi also indicated strong support for the contracts. The process was an example of why unions have been an institution that has worked in this country, he said, and it’s an example of why Washtenaw County’s bargaining process is one to be modeled across the country. Labor and management had only a few weeks to make this happen, he said, and came together with the engagement of the board to work out these contracts. “It’s an amazing accomplishment, and one that we should all be proud of.” He agreed with Conan Smith that there were some features that “can make some of us uncomfortable.” Specifically, Rabhi cited the switch from defined benefit to defined contribution plans. But in the end, the contracts will have a significant impact on the county’s long-term fiscal stability.

The fact that it’s a 10-year contract sounds scary, Rabhi said. But it provides the stability that the county needs to move forward, and the tools to build a healthy and resilient workforce, he said. He applauded the process and all of those who were involved. It had been a challenge, and they all had stepped up to it. He agreed with Conan Smith about the need to be mindful of the long-term resiliency of county employees and fiscal strength in retirement. By helping to provide the tools that employees need to invest, the county can help employees make the right decisions about their retirement plan. That will be a priority for him moving forward.

Rabhi also highlighted the aspect of these contracts that builds in wage increases when property taxes increase. “So when the county is bringing in more money, we’re able to pay our employees more,” he said. It builds in an economic reality and stability, without ignoring the needs of employees to keep up with the cost of living. It will also allow the county to offer competitive salaries, so that they can hire and retain the most excellent staff in Michigan and the country. He concluded by again thanking everyone for their work.

Alicia Ping (R-District 3) noted that she agreed with Conan Smith that the contracts were imperfect, but “for different reasons.” Ultimately, for her it’s about the stability of the entire organization. Without that stability, no individual employee can be secure in their job. There was some give-and-take in the negotiations, and when no one is completely happy, it’s a sign that everybody truly wins, Ping said. The county can now do more structured planning, based on what they know their costs will be. And any employee who comes on board will know what their pay structure will be like, so they can do some planning, too.

The county is eliminating legacy costs by eliminating the defined benefit plan, Ping noted. For her, that’s huge – it’s one of the best things that could happen, along with the changes to retiree health care. “It also gives us options on what we can do with our unfunded liabilities,” she said.

This process got started “because Lansing is meddling again,” Ping said, and that leads to unintended consequences. The contract is lengthy, but she believed it will be an “awesome” benefit to the county. While there are certain aspects that she doesn’t agree with, overall it’s the best thing that could happen for the county and its planning efforts. She thanked both the administration and employees.

Commissioner Ronnie Peterson (D-District 6).

Rolland Sizemore Jr. (D-District 5) cautioned the board against using acronyms. [Some commissioners referred to defined benefit and defined contribution plans as DB and DC, for example.] Noting that the public is watching on TV, he said commissioners should use “real words” and be more down-to-earth so that people can understand what the board is saying.

Ronnie Peterson (D-District 6) told commissioners that he wouldn’t be voting on the contracts for AFSCME Local 2733 or Local 3052, citing a professional relationship he has with the union’s parent organization. [Peterson is the legislative/political director for the Michigan AFSCME area office.] He said he agreed with Conan Smith’s comments, and highlighted the “years of sacrifice” that employees have made. The new contracts are the best that the county has ever negotiated, he said. It’s a “sharing loss,” but employees again are giving up a lot to keep the organization afloat.

The employees do it because they trust the administration and board to do right by them in the years ahead, Peterson said. Employees need to get credit for their help in balancing the budget over the past few years, he said, citing furlough days, wage concessions and other “huge sacrifices.” While most employees in other organizations are now being forced to do that, Washtenaw County employees came to the table years ahead of that to keep the organization afloat and to keep jobs for their colleagues. He wanted to make sure everyone was mindful of their sacrifices, including sacrifices for future employees – some of the union membership will frown on that, he said.

The 10-year term is almost unheard of, he said. It’s not locking them into a commitment that’s too long, he added, but rather it’s locking the county into a road map for the future. If the county does well and tax revenues increase, it’s only right that the employees benefit from that, he said. “They are public service providers,” he said. “They are not public servants who serve for free. They’re entitled to their compensation.”

Kent Martinez-Kratz (D-District 1) spoke briefly, saying he supported the move to the defined contribution system. He noted that the Chelsea city council had made the same decision several years ago when he served as a councilmember. It was overdue, he said. The long-term contract will help stabilize the county, and will give the workers knowledge that their jobs will be stable. It’s a good contract, he said.

Brabec wrapped up the discussion by also expressing her support. It’s been an open and transparent process, she said, that was done with great care “under some trying and difficult circumstances.” It will allow the county to address long-term liabilities and fiscal stability, and allow for a stronger county organization and a stronger workforce to serve residents. She thanked administration and labor for their work. It’s not perfect, she concluded, “but it’s the best imperfect.”

Outcome: The vote on contracts for AFSCME Local 2733 and AFSCME Local 3052 was 7-1, with Dan Smith dissenting and Ronnie Peterson abstaining. Commissioners unanimously approved the agreement with non-union employees. The vote was 8-1 on all other union contracts, with Dan Smith casting the lone vote of dissent.

2012 Financial Update

County administrator Verna McDaniel introduced finance analyst Tina Gavalier to give commissioners a 2012 year-end report, saying “I think you’ll be pleased.” Most recently, the board had received a financial update at their Jan. 16, 2013 meeting, to lay a foundation for setting the 2013-2014 budget.

From left: Finance analyst Tina Gavalier and Washtenaw County administrator Verna McDaniel.

Gavalier reported that the 2012 audit is wrapping up, and will be presented to the board at its April 3 meeting. So she characterized her presentation as preliminary, with the possibility of final “tweakings” before the audit is completed.

She told commissioners that she’d start with the good news: The county saw a $540,000 surplus in property tax revenues compared to what had originally been projected in the 2012 budget. Of that, about $111,000 is due to the timing of property tax collections, including $104,000 from Ann Arbor Township’s 2011 Huron Clinton Metro Authority millage, which was collected in 2012.

Other revenue surpluses include $536,000 more than budgeted from the county clerk/register of deeds office, related to real estate transfer taxes and fees, as well as services from e-commerce. In the “transfers in” category, a surplus of $506,000 related to closing out some non-general funds, Gavalier said, and transferring those into the general fund. And a $167,000 surplus from state revenue-sharing was due to payments under the 2012 incentive program.

In total, general fund year-end revenue surpluses reached about $1.7 million.

Gavalier also noted some revenue shortfalls, including about $687,000 in the sheriff’s office mostly due to delayed implementation of the consolidated dispatch services with the city of Ann Arbor. The district court also recorded a revenue shortfall of $286,000 primarily due to lower-than-expected court fees and fines. New case filings have declined for five straight years, she noted.

Overall, general fund revenue shortfalls totaled about $973,000.

Factoring in both surpluses and shortfalls, 2012 ended with a total general fund revenue surplus of $797,970.

Shifting to the general fund expenditures, a surplus of $1.7 million in fund balance reserves was planned and will be carried forward to use in 2013. There was also a savings of $336,000 in personnel services because of attrition, job vacancies and planned reductions. An additional $309,000 in net operational savings came across all county departments. For example, the trial court exceeded its “lump sum” reduction by $101,000, not counting personnel reductions.

The category of appropriations/transfers out was $731,000 higher than budgeted. Gavalier cited an increase in infrastructure management, and capital investment in technology, building maintenance and renovations.

The total expenditure “surplus” was $1.464 million for 2012 – that is, expenditures were $1.464 million less than budgeted for the year.

Through the end of 2012, total projected revenues of $102.04 million exceed total projected expenditures of $99.78 million by $2.26 million. The county had planned for a total surplus of $1.889 million to carry into 2013 – so the year ended with a surplus of $327,607 above that targeted amount.

2012 Washtenaw County general fund budget variance.

Chart showing 2012 Washtenaw County general fund status.

In 2011, the year-end fund balance was about $14.5 million, compared to a year-end fund balance as of Dec. 31, 2012 of about $16.8 million – or 16.3% of general fund expenditures in the 2013 budget.

Gavalier also reviewed several of the non-general fund outcomes for 2012. There are surpluses in the child care, facilities operations and maintenance, Friend of the Court, public/environmental health, building inspection, and risk management funds. On budget are funds for the prosecuting attorney, veterans relief, and office of community & economic development. The fund supported by the county’s Act 88 millage – for economic development and agricultural programs – showed a shortfall. Gavalier said the shortfall was planned, and includes a planned use of $15,000 from the program’s fund balance.

Looking ahead, Gavalier reminded commissioners that they’ll get the 2013 equalization report in April, along with the 2012 audit. The first-quarter 2013 budget update will be delivered in May. Throughout this year, staff will be working on the 2014-2015 budget, which will be presented to the board in September.

2012 Financial Update: Board Discussion

Yousef Rabhi wanted to highlight the shortfall of $687,000 in the sheriff’s office, most of it related to the dispatch consolidation with the city of Ann Arbor. [Rabhi represents one of three Ann Arbor districts on the county board.] It’s an example of a collaborative effort, and in the future it will save taxpayers money, he said – about $500,000 annually for Ann Arbor.

From left: Commissioners Yousef Rabhi, Alicia Ping, Andy LaBarre, and Ronnie Peterson.

The county is working to make regional collaboration a reality, he said, “but it is costing us something.” He wanted people to realize that the county is stepping up to the plate and putting up resources to help that consolidation go forward, because they believe in this approach. He said he didn’t like the shortfall, but wanted to highlight the investment that’s being made for the sake of regionalism.

Rabhi also noted that the county has a fund balance surplus at year’s end, and that’s something to be proud and excited about. But this good news comes on the heels of federal sequestration, which will impact county operations, he said, including employees and services. The budget surplus won’t offset sequestration entirely, he said, but perhaps it helps the county delay that impact a little bit. If the board prioritizes its programs and focuses on outcomes, he added, there’s a way to mitigate the impact of a loss of federal funding.

Rolland Sizemore Jr. said he was glad the county was working with Ann Arbor on dispatch consolidation, “but maybe Ann Arbor can be a little nicer and not charge us rent.” He asked whether the county will charge Ann Arbor rent when the dispatch operation eventually moves to county facilities on Zeeb Road. [Currently, the combined dispatch unit is located in the downtown Ann Arbor fire station No. 1 across from city hall.] Greg Dill, the county’s infrastructure management director, replied that the answer was “to be determined.”

Sizemore also wondered why the county showed a deficit in Act 88 funds. Gavalier reiterated that the 2012 budget for Act 88 funds included a planned use of the Act 88 fund balance.

Conan Smith asked for more details about the appropriations/transfers out, which was $731,000 higher than budgeted. Gavalier replied that because of overall budget reductions, the county has held flat the appropriations for the “1/8th mill fund” – which is used for maintenance projects – and the technology plan. In 2012, there was some extra money available to allocate, so the administration decided to provide more funding for those areas, Gavalier said.

“How does that happen without the board voting on it?” Smith asked. Gavalier replied that it was an administrative decision. County administrator Verna McDaniel elaborated, saying those funds had been “cut short” over the past few years. The plan was to eventually restore funding, she said.

Smith noted that the board had budgeted $1.3 million for the 1/8th mill fund in 2012. So capital construction got a “solid chunk of money” in the budget process, he said. Was McDaniel saying that it was still underfunded?

Gavalier said the 1/8th mill fund and tech plan funding have been flat since 2008 and 2009. Normally, the allocations are based on property tax values, she said, but that hasn’t been the case in recent years. So administration determined that if it were possible to increase the allocation to those funds, “it would help soften that reduction,” she said.

Allowing that he might sound rude, Smith asked where the budgetary authority was to make that appropriation without the board’s approval.

Commissioner Kent Martinez-Kratz (D-District 1).

McDaniel replied that she knew her authority was for line items under $100,000. The decision was made to restore funding to those areas, she said, but the board can make changes if it wants. Smith clarified with McDaniel that the funds aren’t yet spent. Gavalier added that the money has simply been transferred into the fund for future capital needs, and there was no net impact on the budget.

Smith indicated that he understood – the county had more money than it anticipated, “so we had to put it in some fund.” He further clarified that Dill would be discussing how those funds would be used during a working session presentation on March 21. [Dill's recommendations, presented on March 21 as part of the county's "space plan," included demolishing the former juvenile center and redeveloping the vacant Platt Road site, as well as renovating and remodeling several other county facilities.]

Smith said he wanted to draw the board’s attention to the fact that the money in this line item hasn’t yet been spent. The board has discussed other priorities for the organization, he added, and they need to carefully weigh the appropriateness of making an investment in the county physical infrastructure against some of the programmatic cuts that have been made – such as support for nonprofits, or to offset the impact of sequestration.

Andy LaBarre, who chairs the board’s working sessions, noted that in addition to the space plan update, the March 21 working session would include a presentation by Mary Jo Callan, director of the county’s office of community & economic development, about the impact of sequestration. [.pdf of sequestration impact on county departments] [.pdf of sequestration impact on OCED programs]

Outcome: This was not a voting item.

County Land Bank

Commissioners were asked to form a committee that will explore the feasibility of creating a land bank. A resolution on the March 20 agenda also named three people to the committee: Commissioner Ronnie Peterson (D-District 6), county treasurer Catherine McClary, and Mary Jo Callan, director of the county’s office of community & economic development. The committee is directed to report back to the board by Aug. 7, 2013.

A land bank is a mechanism for the county to take temporary ownership of tax- or mortgage-foreclosed land while working to put it back into productive use. “Productive use” could mean several things – such as 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 board has made attempts in the past to start a land bank, and actually formed one in the summer of 2009. But after commissioners were unable to resolve issues related to governance and funding, they voted to dissolve the land bank in March of 2010. Only three current commissioners were on the board at that time: Ronnie Peterson, Rolland Sizemore Jr. and Conan Smith.

At its Sept. 1, 2010 meeting, the board voted to revive the land bank. However, the board never took the next step of funding it or getting approval from the state.

On March 20 it was current board chair Yousef Rabhi who brought forward the land bank resolution. At the board’s Feb. 20, 2013 meeting, Rabhi had announced his interest in this effort.

For additional background, see Chronicle coverage: “Banking on a Land Bank” (July 8, 2009 board meeting); and discussions during the county board meetings on March 17, 2010, July 7, 2010 and Aug. 4, 2010.

Outcome: Without discussion, commissioners voted to form the land bank exploratory committee.

New Jobs in Water Resources, IT

Two new jobs – in IT support and water resources – were on the March 20 agenda for initial approval.

A new water resource specialist will work in the county’s office of the water resources commissioner, Evan Pratt. The job is authorized at a salary range between $30,515 to $40,253. According to a staff memo, the position is needed due to heavy drain construction activity and an increase in soil erosion application inspections. The job is described as a revenue-generating position, bringing in an estimated additional $41,337 in each of the first three years, and a minimum of $15,000 annually after that. The staff memo indicates that the office has identified reductions within its budget to offset the increased cost of the position.

New Jobs in Water Resources, IT: Board Discussion

Commissioner Dan Smith (R-District 2) expressed hesitation to add to the county’s payroll, but said he understood the need in these cases.

Evan Pratt, Washtenaw County’s water resources commissioner.

Evan Pratt, the county’s water resources commissioner, attended the March 20 meeting and spoke briefly, beginning his remarks by joking: “Long-time listener, first-time caller.” [He was first elected to this position in November of 2012.] Pratt said the construction activity is primarily in the city of Ann Arbor, which is paying for the work and has made at least a three-year commitment. “Existing staff was doing the work, but getting pretty far behind,” he said. He added that he had challenged his staff to figure out a cost-effective way to handle this without hiring part-time staff. The strategy includes shifting some clerical and accounting work to existing front-office staff.

Yousef Rabhi (D-District 8) said he appreciated that Pratt would be hiring a full-time position, rather than using temporary or part-time workers.

Pratt said he wished he didn’t have to come before the board with this request while they were dealing with labor negotiations, and he didn’t want people in the public to think the county was sending a mixed message. Pratt indicated that he was sensitive to Dan Smith’s concerns, but thought this was the most cost-effective way to proceed, by shifting some responsibilities elsewhere within his office. “We see it as budget neutral,” Pratt said.

The IT system support technician was authorized at a salary range between $37,464 to $52,355. According to a staff memo, the new position is needed to provide back-up for the IT help desk and other staff support. It will be funded from IT contracts and a structural reduction of $32,647 in the tech plan appropriation.

Outcome: Both positions received unanimous approval from commissioners in an initial vote at the ways & means committee meeting. The items will be considered for a final vote on April 3.

Public Health Plan

The Washtenaw County public health plan – mandated by the state of Michigan – was on the agenda for a final vote. The board gave initial approval at its meeting on March 6, 2013. [.pdf plan of organization]

State law requires that the county submit a plan of organization every three years to the Michigan Dept. of Public Health. The 103-page document outlines the county health department’s legal responsibilities and authority; the department’s organization, vision, mission and values statement; community partnerships; services, locations and hours of operation; reporting and evaluation procedures; and procedures for approving the county’s health officer and medical director. In Washtenaw County, the health officer is Dick Fleece. Alice Penrose serves as medical director.

Approval of the health plan is part of the state’s accreditation process for public health departments, which was put in place in 2004.

There was no discussion on this item.

Outcome: Commissioners unanimously approved the county’s public health plan.

Water Quality Training Fee

A $75 fee for Washtenaw County’s training course to certify drinking water operators was on the agenda for final approval. The board had given initial approval at its meeting on March 6, 2013.

Entities with drinking water supplies or places that use certain water treatment processes – like factories or schools – are required by the state to have certified operators. Until the end of 2013, the Michigan Dept. of Environmental Quality (MDEQ) reimbursed local health departments that offered these training courses, paying $75 for each certified operator who attended. Those funds will no longer be provided. The Washtenaw County public health department plans to continue offering the courses, but now needs to charge for this service.

The new fee will take effect on April 1, 2013.

Outcome: With no discussion, commissioners gave final approval to set the training course fee at $75.

Communications & Commentary

During the evening there were multiple opportunities for communications from the administration and commissioners, as well as public commentary. Here are some highlights.

Communications & Commentary: Regional Transit Authority

Conan Smith (D-District 9) highlighted the fact that the southeast Michigan Regional Transit Authority board has now been fully appointed, and will convene on March 28 for an orientation meeting. He suggested that the two Washtenaw County representatives – Richard “Murph” Murphy and Liz Gerber – come talk to the board about what the county’s interests and priorities are. “The earlier we weigh in, the more systemic the impact of our comments are going to be,” he said. “If we don’t talk to them until they’ve already made decisions, then it’s going to be too late.”

The city of Detroit and counties of Wayne, Macomb, Oakland and Washtenaw are included in a regional transit authority created by state legislation passed on Dec. 6, 2012.

Rolland Sizemore Jr. (D-District 5) said he’s been getting emails from people in the community who are interested in opting out of the RTA. He wanted to have a working session soon to talk about the RTA, “before we get too far down the tubes, to find out what our options are.”

Smith responded, saying there are no opt-outs allowed for the RTA under state statute. He thought Sizemore might be talking about the countywide effort that “AATA and the locals were trying to put together.” As far as the RTA, legally no one can opt out, he said. Sizemore replied that he still wanted a working session on it.

By way of background, the RTA was created by the legislature in December of 2012 to coordinate regional transit in the city of Detroit and counties of Wayne, Macomb, Oakland and Washtenaw. Conan Smith has been a strong advocate for Washtenaw County’s participation in the RTA. He lobbied the legislature to include Washtenaw County in the RTA, and accelerated the appointment process so that he could make the county’s two appointments to the RTA board before his term as board chair expired at the end of 2012.

However, other local leaders are concerned about the impact of the RTA on the Ann Arbor Transportation Authority, which primarily serves Ann Arbor and Ypsilanti. At a special meeting on Dec. 10, 2012, the Ann Arbor city council unanimously passed a resolution objecting to the inclusion of Washtenaw County in the RTA. There was subsequent lobbying to urge legislators to amend the law so that Washtenaw County would be excluded from the RTA – but that hasn’t happened.

Separately, the AATA has been meeting with representatives of the county’s “urban core” communities to discuss possible expanded public transit within a limited area around Ann Arbor. This follows last year’s derailed effort to build a countywide transit system. The AATA is hosting a meeting on March 28 to go over details about where improvements or expansion might occur, and how much it might cost. [See Chronicle coverage: "Costs, Services Floated for Urban Core Transit."]

Communications & Commentary: Healthy County

Alicia Ping noted that Washtenaw County has been ranked among the healthiest counties in the state. She congratulated the staff for their work.

The annual rankings are published by the University of Wisconsin Population Health Institute and the Robert Wood Johnson Foundation, looking at counties across the U.S. Dick Fleece, Washtenaw County’s public health officer, told commissioners that there are two categories: (1) health outcomes, based on morbidity and mortality; and (2) health factors, including health behaviors (tobacco use, diet and exercise, alcohol use and sexual activity), access to care and quality of care, social and environmental factors, and physical environment.

Washtenaw County ranked first in Michigan for health factors, Fleece reported, and fifth for health outcomes.

Communications & Commentary: Thomas Partridge

Only one person spoke during public commentary at the meeting. Thomas Partridge told commissioners that it was nearly the eve of Good Friday and Easter, and he wondered what Jesus would advocate if he were here today. Partridge thought Jesus would want everyone to be treated in a kind, respectful manner – despite differences of opinion. Commissioners need to work toward affordable, accessible housing and transportation, among other issues to help the most vulnerable residents of Washtenaw County.

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, April 3, 2013 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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From left: Ken Nieman, AADL associate director of finance, HR and operations, with Ann Arbor Public Schools trustee Glenn Nelson at the June 9, 2012 library forum. (Photos by the writer.)

The board faces an Aug. 14 deadline to put a millage on the November 2012 ballot, if they decide to seek tax funding for a bond that would support a new downtown library. The current structure, at the northeast corner of South Fifth and William, was built in the 1950s, with expansions and renovations in the mid-1970s and early 1990s. AADL director Josie Parker joked that one of the building’s boilers is “the same age as I am – I just hope it lasts as long as I plan to last.”

Several years ago, board members and library staff had worked on similar a building project, but suspended the effort in late 2008 because of declining economic conditions. Board members revisited the topic in 2010 as part of their strategic planning process. One of the strategic goals emerging from that process directly related to the downtown building: “Renovate or replace the downtown library with attention to the condition of the existing building, tax base, revenue stream, development of surrounding properties and demographics.”

In November 2011, the board voted to provide $45,000 in funding for consultants to help resume the process, and earlier this year a special facilities committee was appointed to oversee the effort and make a recommendation to the full board. That recommendation is expected to be presented at the board’s July 16 meeting.

At the Saturday morning forum, Parker told the group that the library had commissioned a survey by the Lansing firm EPIC-MRA, which she said “asked questions that we were afraid to ask.” [.pdf of survey results] The survey, conducted in March of 2012, showed that if a vote were taken now – on funding a $65 million renovation or new construction project with a property tax increase of 0.69 mills – 45% of survey respondents would vote yes, and another 15% would lean toward a yes vote. That compares with a total 37% who said they would either vote no or lean toward no. Results indicated even stronger support for a scaled-back project.

The forum provided an opportunity for questions. Topics covered the board’s decision-making process, financial considerations, design and operational issues, and whether the library was coordinating with efforts to develop surrounding properties – such as the Ann Arbor Downtown Development Authority’s Connecting William Street project.

In addition to library staff, about a dozen people attended the forum. Many of them – including former mayor Ingrid Sheldon and Ellie Serras of the Ann Arbor Main Street Business Improvement Zone – are already supporters of the library and will likely be part of a millage campaign, if the board decides to pursue that option. Four of the seven library board members also attended the forum: Rebecca Head, Margaret Leary, Barbara Murphy, Jan Barney Newman.

Two additional public forums will be held this month: on Tuesday, June 12 from 7-9 p.m.; and Wednesday, June 20 from 7-9 p.m. The June 20 forum will be held in the downtown library’s basement multi-purpose fourth-floor conference room at 343 S. Fifth Ave. in Ann Arbor. In addition, public commentary is open at the library board’s monthly meetings – upcoming meetings are on June 18 and July 16 starting at 7 p.m. in the fourth-floor conference room of the downtown building. Comments or questions can also be emailed to downtown@aadl.org. A video of the June 9 forum is posted on the AADL website, along with other information related to this effort.

Background and Overview

Board president Margaret Leary introduced the forum by highlighting the library’s strategic plan, which runs through 2015. The plan had been informed by the board’s vision and mission statements, which Leary read. Each word had been carefully selected by the board for its particular meaning, she noted.

Vision Statement: The Ann Arbor District Library provides collections, programs, and leadership to promote the development of literate and informed citizens through open and equal access to cultural, intellectual, recreational, and information resources.

Mission Statement: The existence of the Ann Arbor District Library assures public ownership of print collections, digital resources, and gathering spaces for the citizens of the library district. We are committed to sustaining the value of public library services for the greater Ann Arbor community through the use of traditional and innovative technologies.

Earlier this year, the board embarked on a “restarting” of a process that they had halted in 2008 because of the bad economy, Leary said. They’re following the part of the strategic plan that relates to physical facilities, which identifies two goals: (1) Renovate or replace the downtown library with attention to the condition of the existing building, tax base, revenue stream, development of surrounding properties and demographics; and (2) Maximize the efficiency and utilization of meeting rooms and other facilities.

The purpose of these forums, Leary said, is to find out what people think about the library, and to give people the chance to interact with key library staff.

There’s a timing issue to consider, Leary noted. If the board decides opts for a renovation or new building requiring more revenues than AADL’s existing millage would support, that would require a bond to be funded by an additional millage. August 14 is the deadline for putting such a proposal on the November ballot.

Leary also introduced the three other board members who attended the forum: Rebecca Head, Barbara Murphy, Jan Barney Newman.

Josie Parker, AADL director.

AADL director Josie Parker also addressed the group, introducing some of the other people who had come to the forum. Parker noted that retired librarian Bette Thompson, who had worked at AADL for more than three decades, was in the room. Thompson is ”absolutely someone who can talk about change as a constant,” Parker said.

Two leaders of the Friends of the Ann Arbor District Library – FAADL president Pat McDonald and former treasurer Sally Allen – were also introduced. Parker described FAADL as a major player in the library’s success. The nonprofit runs a used bookstore in the lower level of the downtown library, and donates proceeds to AADL. Also attending the forum was Glenn Nelson, a trustee with the Ann Arbor Public Schools board of education. Parker said she appreciated the cross-interest of AAPS, even though the library was now a separate entity. [Until 1995, the library was part of the school system.]

[Others at the forum included former Ann Arbor mayor Ingrid Sheldon, Ellie Serras of the Ann Arbor Main Street Business Improvement Zone, and consultant Betsy Jackson. They are among an very informal group that's likely to work on a millage campaign, if the board votes to pursue that option. Others involved in the informal group, according to Sheldon, are local entrepreneur Dug Song, and Debbie and Norm Herbert.]

Parker explained that the library had commissioned a survey by the Lansing firm EPIC-MRA, which “asked questions that we were afraid to ask.” She said the hardest for her had been a question asking if the Internet had made the library irrelevant. The results – of 400 responses – indicated that 50% felt the library had the same importance, and 34% responded that the library was even more important now. [.pdf of survey results] She noted that technology is integrated into everything that the library does, “like water and light.”

In giving a brief history of the library system, Parker noted that it was formed in 1866 by the Ladies Library Association, located in private homes. The first public library opened in 1907, in a structure built with a Carnegie Foundation Grant. Part of that building’s facade is still visible on the University of Michigan’s North Quad, facing Huron Street. The city didn’t want responsibility for the library, Parker said, so it became part of the public school system.

The downtown building was constructed in 1957-58. Parker joked that “there’s a boiler down there that’s the same age as I am – I just hope it lasts as long as I plan to last.” Later additions were completed in the mid-1970s and in the early 1990s. The infrastructure won’t support additional levels on the current structure, she said.

Since 1866, the community has done a great job in supporting the kind of library services it needed, Parker said. Today, ”what we need is a 21st century library so we can deliver 21st century services.”

Feedback on Services, Programming, Finances

Part of the forum was devoted to gathering feedback on specific aspects of the library: Children’s services, quiet reading rooms, meeting/gathering spaces, research/archives, and finances. In addition, three staff members were on hand to give tours of the downtown facility, taking people behind the scenes to show the building’s condition.

The library staff had identified challenges and opportunities associated with each topic. Those were listed on signs positioned around the room, where staff members were on hand to answer questions, provide additional information, and gather input. After about 45 minutes, the forum reconvened and each staff member reported out regarding the feedback they’d received.

Feedback: Children’s Services

Challenges cited by library staff for the downtown children’s area include: (1) limited opportunities for interactive learning in the current space; (2) the existing story corner can accommodate events or play, but not both; and (3) size and capabilities of the space limit the ability to meet the needs of different ages.

Opportunities cited by library staff for a new or renovated facility include: (1) a room designed around flexible, upgradable interactive exhibits and play surfaces; (2) dedicated capacity for simultaneous play, events, and tours; and (3) a set of planned zones that support the varying developmental needs of kids at all ages.

Sherlonya Turner, manager of youth & adult services and collections, gave the report for this topic. Conversations she’d had with forum participants focused on the possibilities for serving the needs of children at different times of their lives, she said. Every kid needs different things at different times. Right now the downtown facility can’t accommodate all of those services and activities at the same time, because of the physical space constraints.

Feedback: Quiet Reading Room

Challenges in this category include the fact that there’s no room for dedicated, quiet work and reading space in the downtown building. There’s poor lighting, bad acoustics, and insufficient access to power and online connections. In contrast, new branch reading rooms are comfortable, useful, and welcoming – there’s a need for a similar destination downtown.

The goal would be to create a comfortable, quiet reading room with ample seating, working/reading space and a welcoming atmosphere, with energy-efficient lighting and natural daylight, and ample access to power and access to online services.

Diane Dahlem, AADL’s circulation manager, reported that most people she talked with agreed that a quiet space is needed at the downtown location. Suggestions included windows for natural lighting, as well as good lighting at night; digital connectivity; work tables; and a mix of seating, including comfortable chairs for reading or reflection.

Feedback: Meeting/Gathering Spaces

Several challenges were identified by the library in this category. Currently, there are insufficient individual and group study/meeting rooms to meet demand. Library events are limited by the availability and capacity of downtown rooms, and event attendees frequently have to tolerate cramped, uncomfortable rooms with poor sightlines.

Tim Grimes, AADL's community relations and marketing manager, records feedback on meeting spaces at the June 9 library forum.

A new or renovated facility would provide opportunities to develop a diverse set of meeting and study rooms with ample electrical, data, and equipment access. Event venues could be designed to support a broad range of library and public event needs. One possibility would be to create a space within the downtown library that could comfortably handle large turnouts.

Tim Grimes, AADL’s community relations and marketing manager, reported that his discussions with forum participants had centered on the different types of meeting spaces that are needed – from tutoring sessions to large events. Availability is also an issue, as people can only reserve rooms a limited number of times each year.

Grimes also pointed out that the number of events held at the downtown library is growing. For larger events, the lower level multi-purpose room often can’t accommodate the turnout, so some of the people have to watch a simulcast of the event from the fourth-floor conference room. It would also be nice to have a separate outside entrance, for events that end after the rest of the library has closed.

Feedback: Research/Archives

The main challenge in this area relates to the Ann Arbor News archives, which are currently housed in rented space in a Green Road office complex. There’s limited-to-no access for downtown patrons, researchers or staff, and it’s difficult to integrate the content of the archives into ongoing projects. [For additional background on the AADL newspaper archives, see Chronicle coverage: "Ann Arbor Library Set to Publish 'Old News'"]

With a renovated or new downtown facility, there could be space to appropriately house and display the archives collections. It would enable public access to the archives, possibly in conjunction with a new reading room. Another possibility would be to develop research stations that allow for the safe use of these collections.

Andrew MacLaren, a production librarian who’s been working on the archives, said his conversations at the forum had been about giving people access to these historical collections. The value would be for informational purposes, he said, but also for “cool purposes” – engaging an 8-year-old with a physical bound volume rather than a computer, for example. Providing more access would also allow librarians to have conversations with people while they’re looking at the material, which would help guide the staff in setting priorities for digitizing the collection.

Feedback: Finances

The category of library finances was not framed as challenges. Instead, the library staff provided a brief description of the AADL’s financial position. It’s a taxing authority that is independent of the city of Ann Arbor or Ann Arbor Public Schools. Since July of 2009, the library has levied 1.55 mills – 81% of the voter-approved 1.92 mills. Property taxes account for over 90% of the library’s income. [The roughly $12 million annual budget for fiscal 2012-13, beginning on July 1, 2012, was approved by the board at its May 21, 2012 meeting.]

The staff noted that the three new branch libraries – Malletts Creek, Pittsfield and Traverwood – were opened on time and on budget, using a total of $24 million in revenues generated from the operating millage.

Regarding opportunities, a $65 million bond – funded with an 0.69 mill tax increases – would provide funds to improve the downtown library, while allowing AADL to continue to function within the existing operating millage. The library staff provided this chart to show how much a property tax increase of 0.69 mills would cost taxpayers, based on the value of their property:

Chart showing what taxpayers would pay annually with a 0.69 mill increase, based on property values.

Ken Nieman – AADL associate director of finance, HR and operations – reported that in addition to queries about how much money it would take to build or renovate, most of the questions he fielded had to do with process: When and how will be board decide what to do? He said he thought the financial issues were easy to understand.

Feedback: Infrastructure

Infrastructure challenges related to the age and design of the downtown building, starting with its construction in 1957, and subsequent additions and renovations in 1974 and 1991. The different parts of the building don’t work together efficiently – the heating and cooling systems are inefficient and expensive to operate, and require expensive service and maintenance, according to AADL. All three building phases pre-date the Americans with Disabilities Act (ADA). There is only one ADA-accessible restroom in the building, and on the third floor there are no public restrooms or drinking fountains. The building also poses challenges in safety and supervision of space.

A new or renovated structure could use advances in green building technology to deliver a sustainable, high-capacity downtown library with convenient, accessible restroom facilities throughout the building, according to AADL staff. Spaces could be designed with ceiling heights and column spacing to allow intuitive wayfinding and supervision.

Colin Simpson, an AADL circulation supervisor, had led a tour of the facility and gave some examples of the types of challenges that the tour had highlighted. The computer server room, for example, is a need that didn’t exist when the building was originally constructed and renovated. It isn’t very secure, he said, and has an outdated fire suppression system.

Questions & Answers

The forum included a Q&A facilitated by Sandra Greenstone of Enliven Consulting, who has worked with the board on strategic planning in the past. Questions were fielded primarily by AADL director Josie Parker. This report organizes the exchanges thematically.

Q&A: Other Branches

Parker was asked whether the AADL had considered making its new branches bigger, and whether it would be possible to expand those branches to accommodate some of the needs now served by the downtown building.

From left: Pat McDonald, president of the nonprofit Friends of the Ann Arbor District Library, talks with Sherlonya Turner, AADL manager of youth & adult services and collections.

Parker replied that the branches are as big as they can be on their sites. That’s partly related to parking – you can’t have a neighborhood branch without adequate parking, relative to its size, she noted. A 1995 study commissioned by the library indicated that the AADL system needed a new central location and new branches in the system’s four quadrants, Parker said. Three new branches were subsequently built – Malletts Creek at 3090 East Eisenhower Parkway (opened in 2004), the Pittsfield branch at 2359 Oak Valley Drive (opened in 2006), and Traverwood at the intersection of Traverwood and Huron Parkway (opened in 2008). There’s no new branch on the northwest side – that area is served by the West branch at the Westgate Shopping Plaza.

The branch buildings can’t be enlarged, Parker said – because their structures won’t allow it, and because of parking constraints.

The woman who had posed the original question noted that she visits the Malletts Creek branch, and parking there is tight. She walks, but observed that this isn’t a society that walks everywhere.

Parker replied that the library has taken ownership of those issues. The branches are located in places that people can walk or bike to, and with the exception of the Pittsfield branch, all the branches are on bus routes. When the library bought the land for the Pittsfield branch, a bus ran past that location – the route was later eliminated, Parker said. The library had worked hard to select those locations, she added.

A follow-up query asked for more details about a branch in the northwest quadrant. Parker explained that Scio Township limits development to areas served by water and sewer. Land in those areas is very expensive, she said. At this point, the branch in Westgate serves the western part of the district, and people love it, she said.

Parker noted that when a new branch opens, library use goes up across the system. So even though the branch at Westgate isn’t new, its use has increased over the years. She said it’s interesting to think about what might happen if changes occur to the downtown site.

Q&A: Design, Operational Factors

One person in the audience observed that the downtown building seemed to have higher security needs. Parker agreed, saying that’s true with any library system that has an urban downtown. Ann Arbor isn’t a major urban city, she said, but it’s urban by Michigan standards. Keeping a building secure when it has multiple levels is challenging and expensive, she added. It’s far easier to handle security on a single level, with a clearer line-of-sight. There are also different user groups downtown compared to the branches, Parker noted.

Glenn Nelson, who serves on the Ann Arbor Public Schools board of education, referred to a comment that Parker had made earlier in the meeting – that technology is pervasive throughout the library’s operations. What are the implications of that for renovating the existing building?

It would be very difficult, Parker said. The walls are concrete and ceilings are low, making it difficult to lay cable. They’ve put all the cable they can into the current building, she said. Renovation might be possible, but to do right by the next generation, the type of technology and how to provide it are key questions. It would be difficult to address with a renovation, she said.

Q&A: Environmental Issues

Board member Rebecca Head noted that Ann Arbor is very supportive of environmentally sound policies, perspectives and direction. What savings might the library see from energy and water costs in a new building, compared to the existing one?

From left: AADL board member Rebecca Head talks with former Ann Arbor mayor Ingrid Sheldon.

Parker replied that about five years ago, when the library first began looking into the future of its downtown building, energy savings factored into the decision greatly. And after building three branches that emphasize sustainability, it’s clear that there can be cost savings, she said.

The downtown building has a huge power bill each month – because the windows are single paned, and the building uses forced-air heating and cooling, she noted. The thermostat that regulates heating and cooling in the first-floor children’s section is located on the fourth floor. It can’t be changed easily, so the children’s area gets hot – and staff have to place fans strategically. Meanwhile, on the fourth floor it’s freezing, she said.

Related to operating costs, Parker noted that if the decision is made to rebuild, AADL won’t change its operating millage. More money won’t be needed in the future to operate the library system, she said. [The library could levy a voter-authorized millage of up to 1.92 mills, but for the past few years the board has voted to levy only 1.55 mills for operating costs.]

Board president Margaret Leary said she wanted to press Parker on the issue of renovating versus building a new structure. One of the principles of environmental sustainability is to reuse a building rather than tearing it down: What are Parker’s thoughts on that?

Parker said the staff knows how important it is to consider that question. When they embarked on the branch-building effort about a decade ago, the decision was made not only to meet the city’s code requirements, but to exceed them, she said. The three new branches – Malletts Creek, Pittsfield and Traverwood – were built with that in mind and achieved that goal, she said. The Traverwood branch in particular highlights sustainability building practices. Ash trees on the site were removed using draft horses to minimize impact on the land, for example, and wood from those trees was used for flooring, shelves and support beams.

As for the downtown building, original cost estimates from the previous plans to construct a new building were based on recycling and reusing as much as possible from the old building, Parker said. At that time, the decision to build a new structure was made in part because the cost difference between renovation and rebuilding was relatively small, and it was thought to be the most economically feasible to design and construct a new building. It was not a capricious decision, Parker stressed.

Q&A: Economic Considerations

Another question from the audience related to Parker’s comment about economic feasibility. Coming off of the Great Recession, how does the library sell a millage to the public?

“You can help me with that!” Parker quipped. The $24 million outlay to build the three new branches had come from revenues generated from the library’s existing millage, she noted. AADL incurred no debt for those projects, because the library board has discretion about how much of the voter-authorized 1.92 mills it will levy. To pay for those new branches, the board levied the highest amount – 1.92 mills. When the board realized that, because of the difficult economy, it wouldn’t move forward with a new downtown building, they lowered the millage to its current rate of 1.55 mills.

Today, the economic situation is different than it was when the library first considered a new downtown building, Parker said. It’s not possible for even the maximum rate of 1.92 mills to bring in sufficient funds for a new building, because property values have declined.

So the library commissioned a survey to gauge how voters would feel about supporting an additional millage at different levels, she said: On funding a $65 million renovation or new construction project with a property tax increase of 0.69 mills, or on funding scaled-back efforts with an 0.51 mill increase or an 0.25 mill increase. A mill is equal to $1 for each $1,000 of taxable value for a property. [.pdf of survey results]

For the $65 million option, 45% of survey respondents would vote yes, and another 15% would lean toward a yes vote. That compares with a total 37% who said they would either vote no or lean toward no. The scaled-back levels of an 0.51 mill increase or an 0.25 mill increase also received favorable support (yes or leaning to yes) of 61% and 72%, respectively.

The responses were positive enough to move forward, Parker said. Based on the survey, they have an indication of support, though “no guarantee,” she added. They would sell a millage based on how people respond at these meetings and on the board’s decision, Parker said. It’s why they’re holding these conversations.

Q&A: Coordination with Neighboring Sites?

Omari Rush, education manager for the University Musical Society, asked how the library is factoring in changes near its downtown location. For example, a new road will be opening adjacent to the existing building, running east/west between Fifth and Division. Called Library Lane, it’s being built as part of the new underground parking structure that’s expected to open in July. There are other changes in the area, he noted. The library can’t wait for promises to materialize, but how are those potential changes factored into the library’s plans?

By way of background, the Ann Arbor Downtown Development Authority – acting on direction from city council – has embarked on an effort to explore alternative uses of city-owned parcels now used for surface parking, in a limited area of downtown bounded by Ashley, Division, Liberty and William streets. This Connecting William Street project focuses on these sites: the Kline’s lot (on Ashley, north of William), Palio’s lot (at Main & William), the ground floor of the Fourth & William parking structure, the old Y lot (Fifth & William – across from the downtown library), and the top of the Fifth Avenue underground parking garage, adjacent to the downtown library building.

Betsy Jackson talks with Andrew MacLaren, an AADL production library who's working on the project to digitize the former Ann Arbor News archives.

At the June 9 forum, Parker said there’s never been a library board vote on the question of coordinating with other efforts. She noted that the downtown library is what urban planners refer to as an anchor, because it attracts so many people to the area. The downtown library draws over 600,000 visits a year, she said. The only other place to do that is Michigan Stadium, and that happens only over the course of seven weekends. The library isn’t a retail anchor, but it brings people in.

The library can’t wait to see what else might happen in the area, Parker said. In fact, if the board decides to move ahead with a new building, that might be a catalyst for other things to occur around it. What those other things might be are not the library’s decisions, she added.

Parker noted that having the large parking structure nearby was a “huge positive” – especially because the library doesn’t have responsibility for maintaining it, or for security. [The city-owned structure is part of the parking system that's overseen by the Ann Arbor Downtown Development Authority and managed by Republic Parking, under contract with the DDA.]

Library Lane is also a positive thing, Parker said. The DDA has worked hard on the design to accommodate the needs of library users, she noted. Since the downtown library was renovated in the 1970s, there hasn’t been a way to pull up and drop  off someone safely from the passenger side of a vehicle. [The building's main entrance is on the east side of South Fifth Avenue, a one-way southbound street.] Now, with Library Lane soon to open, that drop-off will be possible.

Parker also pointed out that the wall of the first underground level is designed so that it could accommodate an underground entrance from the library, if a new building is designed for that.

All of these things are positives, she concluded, but ”what happens [elsewhere] is not in our control.”

Q&A: Board Decision-Making Process

Margaret Leary explained how the board will go about making a decision on whether to renovate, build or do nothing. The board decided several months ago to take up the question again, she said – about what to do with the downtown building. A special facilities committee was created, with board members Nancy Kaplan, Prue Rosenthal, and Ed Surovell. That committee’s charge is to review AADL’s facilities, gather new information, and make a recommendation to the full board, Leary said. That recommendation is expected to be presented at the board’s July 16 meeting.

The committee is doing several things, Leary said, including holding these public forums. [None of the committee members attended the June 9 forum.] They are also reviewing previously gathered documents from the library’s initial plans to construct a new downtown building, from the 2006-2008 timeframe. At that time there were cost estimates for the project, she said, although that information is now dated. The library also knows more about what the public needs and wants at this point, she said.

There are a lot of variables, Leary said, and the board won’t have to make all of the decisions this summer. But they do need to decide what general action to take, she added – whether to do anything, renovate or build a new structure.

Q&A: Timeline for New Building

Board member Barbara Murphy asked for a timeline, assuming that the board decided to seek a millage in November for a new building, and that the millage won voter approval.

If a millage passed, Parker replied, then the board would need to make several decisions. They’d need to engage an architect and construction management firm, and start talking about what the building would look like, how big it would be, and what would go in it, she said. Developing a schematic design could take about 18 months.

During that time, the library would secure temporary locations at other sites to continue the downtown library’s operations and services, and the existing building would be demolished. Based on the AADL’s experience building other branches, Parker estimated it would take another 18-24 months to build the new structure. The entire process could take four to five years, depending on how long the design phase takes, and on the weather, which is a big factor in Michigan, she said.

Based on prior discussions, Parker said they’d like to keep as much programming as possible, but most of the downtown collection would be stored off-site. Patrons could request items via the AADL website, and pick up materials at any of the other branches. So the library would be moving more materials throughout the system, she said, which will be a huge logistical challenge, but the staff will handle it.

Parker added that there’s no intention of reducing the library’s full-time staff. ”We will not lay anyone off for this,” she said. However, there are part-time employees – referred to as “casual” staff – that are hired cyclically, and there won’t be as much need for those positions, she said. So at times of the year when the library might typically hire more part-time employees, those position wouldn’t be filled.

In response to a query about where the temporary sites might be located, Parker said the staff hasn’t identified locations. They won’t start doing that until they know there’s a need, she said – until a decision is made about the downtown building.

Next Forums

Two additional public forums will be held this month: on Tuesday, June 12 from 7-9 p.m.; and Wednesday, June 20 from 7-9 p.m. Both forums will be held in the downtown library’s basement multi-purpose room at 343 S. Fifth Ave. in Ann Arbor.

In addition, public commentary is a regular part of the library board’s monthly meetings – upcoming meetings are on June 18 and July 16 starting at 7 p.m. in the fourth-floor conference room of the downtown building. Time can be reserved by calling 734-327-8311 by 5 p.m. of the weekday preceding the meeting. Others can address the board following the speakers who have signed up in advance. [It's rare for anyone to speak during public commentary at these meetings.]

Comments or questions can also be emailed to downtown@aadl.org. A video of the June 9 forum is posted on the AADL website, along with other information related to this effort.

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