From left: Commissioner Dan Smith (R-District 2), county treasurer Catherine McClary, and commissioner Conan Smith (D-District 9). The treasurer’s office is instrumental in a new approach to helping local municipalities pay off bonds backed by the county, which received initial approval on Sept. 18. (Photos by the writer.)

Even so, a wide range of resolutions were passed – mostly with no discussion. The absence of three commissioners also led to non-votes on two items originally on the agenda, out of concern that there would not be sufficient support to pass them.

During the meeting, the board postponed a final vote on a countywide micro loan program for small business. Under the county board rules, a resolution requires votes from “a majority of the members elected and serving” in order to pass – that is, five votes. Supporters of the resolution weren’t certain they could achieve that number. A resolution regarding the state’s “Stand Your Ground” law had been pulled from the agenda earlier in the day for the same reason.

Opponents of the “Stand Your Ground” resolution – which called on the state legislature to repeal the law enacted in 2006 – had been expected to appear at the meeting in force, prompting county administration to add extra security. However, after the resolution was pulled, only a handful of people attended to speak against it, as did one supporter.

In another resolution that addressed a statewide issue, commissioners voted to direct staff to explore options – including possible legal action – to help set cleanup criteria in Michigan for the carcinogen 1,4-dioxane. In part, the item relates to a 1,4 dioxane plume stemming from contaminants at the former Gelman Sciences plant, west of Ann Arbor.

Dan Smith (R-District 2) stated “present” during that vote, rather than voting for or against the resolution – because board rules do not allow for abstention. After the meeting, corporation counsel Curt Hedger told The Chronicle that he’d be looking at the board rules to determine how Smith’s vote will be recorded. Hedger pointed out that the resolution needed five votes to pass, which it garnered even without Smith’s vote.

Commissioners also gave initial approval for a new approach to paying off debt incurred from bonding – typically for public works projects in local municipalities. The proposal would allow local units of government to repay bonds early via the county’s delinquent tax revolving fund (DTRF), which is administered by the county treasurer. The intent is to reduce interest rate payments and the county’s debt burden. In a related resolution, commissioners gave initial approval to restructuring debt held by Bridgewater Township, using this new approach.

Several items that received initial approval at the board’s previous meeting on Sept. 4 were passed in a final vote on Sept. 18 with minimal discussion, including: (1) strengthening the county’s affirmative action plan, as well as other nondiscrimination in employment-related policies; (2) authorizing a range of grants administered by the county’s office of community & economic development, as well as a resolution that would give blanket approval in the future to nearly 30 annual entitlement grants received by the county; (3) adding three new full-time jobs for stewardship of the county nature preserves; (4) adding a new 10-bed treatment program for female teens in the county’s youth center that will create a net increase of 5.46 jobs; and (5) budgets for the county’s public health and community support & treatment service (CSTS) departments.

And after postponing action on Sept. 4, the board voted to create a 13-member community advisory group to look at options for the county-owned Platt Road site in Ann Arbor. The Sept. 18 resolution was much more general in its direction than the one that was debated on Sept. 4, stripping out most of the details related to a previous focus on affordable housing.

Also on Sept. 18 as an item of communication, Yousef Rabhi updated the board on plans to fill a vacancy on the county road commission, which will result from the recent appointment of current road commissioner Ken Schwartz as Superior Township supervisor. Applications for the road commissioner job are being accepted until Sept. 25, with the county board likely making an appointment at its Oct. 2 meeting.

1,4 Dioxane Cleanup

A resolution on the Sept. 18 agenda gave direction to the county staff to explore options – including possible legal action – to help set cleanup criteria for the carcinogen 1,4-dioxane in Michigan.

Map of Pall-Gelman 1,4-dioxane plume, by Washtenaw County. Black arrow added to indicate baseball field at West Park. The yellow region is the estimated plume area where the 1,4-dioxane concentration is greater than 1 ppb. That area encroaches well into the city of Ann Arbor and extends outside the well prohibition zone (red border).

In addition to its broader implications, the resolution is meant to address the 1,4 dioxane plume stemming from contaminants at the former Gelman Sciences plant in Scio Township, which is now closed. [.pdf of county resolution]

The Ann Arbor city council passed a resolution on Sept. 3, 2013 related to the 1,4-dioxane issue. However, the city council resolution makes no mention of legal action.

In contrast, the resolution passed by county commissioners includes passage that:

…directs the County Administrator, Corporation Counsel and other appropriate county staff to work in collaboration with the County Water Resources Commissioner to explore other actions available to the County, including but not limited to legal action, meeting with and petitioning the MDEQ and EPA to aid in setting appropriate cleanup criteria for 1,4-dioxane in Michigan, including the Pall-Gelman plume and without site specific criteria for the Pall-Gelman plume and to cooperate with other local units of government to ensure protection of public health and the environment; …

The history of Gelman Sciences and its 1,4-dioxane contamination goes back 40 years. The company was based in Scio Township and later acquired by Pall Corp. The Michigan Dept. of Environmental Quality’s current 1,4-dioxane generic residential drinking water cleanup criterion was set at 85 parts per billion (ppb). But an EPA criterion set in 2010 was for 3.5 ppb.

The MDEQ was supposed to re-evaluate its own standards by December 2012, based on the EPA’s 2010 toxicological review. It missed that deadline, and is anticipated to miss a new deadline set for December 2013.

There was no board discussion on this item.

Outcome: Five commissioners voted in support of this resolution, so the resolution passed. When his name was called in the roll-call vote, Dan Smith (R-District 2) responded by saying “Present.” Three commissioners – Felicia Brabec (D-District 4), Rolland Sizemore Jr. (D-District 5) and Ronnie Peterson (D-District 6) – were absent.

Responding to queries from The Chronicle after the meeting, Pete Simms of the county clerk’s office – who is responsible for recording votes and keeping the board’s official minutes – indicated that he would need to consult with corporation counsel Curtis Hedger about how to record Smith’s response. Hedger told The Chronicle that he would be looking into the question.

The board rules – adopted on Jan. 2, 2013 – state, in relevant part:

O. VOTING:
Every member who shall be present, including the Chair, when a motion is last stated by the Chair, and no other, shall vote for or against the motion unless the member has a conflict of interest, in which case the member shall not vote.

Dan Smith has been an advocate for allowing board members to abstain on certain votes. He was successful in adding a new rule in February 2012 that stated: “Commissioners may abstain from voting on resolutions that express support or opposition and otherwise take no action.” The question of abstaining from votes has related primarily to resolutions on state or federal issues, over which the county board has no control.

However, the composition of the board changed in the November 2012 elections, which also reflected redistricting that decreased the number of commissioners on the board from 11 to 9. And on Jan. 2, 2013, Conan Smith proposed an amendment to delete the rule that allowed commissioners to abstain. After debating the issue, the board voted 5-4 in favor of Conan Smith’s amendment – so abstaining from a vote is no longer allowed.

New Approach to Bond Debt

A proposal for a new way to pay off debt incurred from bonding – typically for public works projects in local municipalities – was on the Sept. 18 agenda for initial approval. The proposal would allow local units of government to repay bonds early via the county’s delinquent tax revolving fund (DTRF), which is administered by the county treasurer. The intent is to reduce interest rate payments while posing no financial risk to the county, according to a staff memo.

The maximum amount of the advance would be $1 million, with a term of 10 years or less. The action would require approval by both the treasurer and the board of commissioners. Several other criteria for using a DTRF advance are proposed:

• The approval of an advance would be considered only for the county’s own indebtedness, and would result in a reduction in the County’s bonded indebtedness.
• The local unit receiving the benefit agrees to contribute at least 10% of the outstanding principal amount of the debt toward the reduction of the bonded debt and to amend its contractual agreement with the county to include a new payment schedule and new interest rate(s).
• A refunding bond analysis must be performed to examine the potential for savings by selling refunding bonds.
• The estimated cost of issuance for a refunding bond is 25% or greater than the estimated interest savings from the refunding bond sale.
• The local unit has a bond rating in the top two tiers of a standard rating service, or if the local unit is too small to warrant a rating, a review of the most recent audit of the local unit shows that they are not experiencing fiscal stress.
• The interest rate of the advance will be determined by the county treasurer and will exceed the rate of return received by the county treasurer in her/his pooled accounts.
• The amended contract with the local unit will provide a process by which the county treasurer can adjust the interest rate.

In a related resolution, commissioners were asked to give initial approval to restructuring debt held by Bridgewater Township. The township owes $585,000 on $1.095 million in bonds issued in 2004 to fund a sewer system. County treasurer Catherine McClary has agreed to lend the township money to pay off the bonds. The township will repay the treasurer’s office at a lower interest rate than it was paying for the bond debt, which was averaging 4.1%. The rate will provide a greater rate of return than the treasurer is currently getting on investments, according to a staff memo.

The amount of the advance from the treasurer’s office is $430,000, loaned to Bridgewater Township over nine years at a starting interest rate of 2%. The township will use an additional $172,000 to pay down the existing principal on its bond debt. The transaction will cost about $6,000 in legal fees, which the township will pay. [.pdf of staff memo on Bridgewater Township debt]

New Approach to Bond Debt: Board Discussion

Deliberations were brief. Regarding the broad policy resolution, Dan Smith (R-District 2) noted that every year, the county’s auditor tells the board that an audit means something very specific. So Smith proposed amending out the phrase “the most recent audit” and substituting in the phrase “recent financial reports.” It was considered a friendly amendment.

Ron Smith, Bridgewater Township supervisor, received a round of applause from commissioners for his work on a new approach to paying off debt.

Yousef Rabhi (D-District 8) thanked everyone involved in developing this proposal. It’s a very creative way of reducing the county’s debt as well as the debt load for other local units of government.

He thanked the officials of Bridgewater Township for their leadership, as well as county treasurer Catherine McClary, public works director Dan Myers, and water resources commissioner Evan Pratt. Rabhi noted that this proposal was reviewed at length at the board of public works, on which he serves.

Alicia Ping (R-District 3) also thanked staff and officials for their work. She noted that sometimes the out-county townships don’t feel that they get a lot of attention or service from the county. “This is one way that the county is able to step up and help out,” Ping said.

Outcome: Both resolutions were unanimously given initial approval, to be considered for a final vote on Oct. 2.

Platt Road Advisory Committee

After postponing action at its Sept. 4, 2013 meeting, commissioners considered a new resolution on Sept. 18 to create a 13-member advisory group to look at options for the county-owned Platt Road site in Ann Arbor, where the old juvenile center was located.

The original resolution brought forward on Sept. 4 was developed with guidance from commissioner Andy LaBarre (D-District 7), who represents the district where the property is located. It called for a nine-member committee with the following composition:

• 2 county commissioners
• 1 Ann Arbor city councilmember
• 2 residents from the adjacent neighborhood
• The executive director of the Ann Arbor Housing Commission [Jennifer L. Hall]
• The director of Washtenaw County parks & recreation [Bob Tetens]
• The director of the Washtenaw County office of community and economic development [Mary Jo Callan]
• The Washtenaw County infrastructure management director [Greg Dill]

During deliberations on Sept. 4, the committee structure was amended to include four additional Washtenaw County residents, including at least one with real estate experience.

The idea of an advisory committee to help with the dispensation of this property – at 2260 and 2270 Platt Road – was first discussed at the board’s July 10, 2013 meeting. It was included in an overall strategic space plan for county facilities, which proposed demolishing the former juvenile center and exploring redevelopment of the site for affordable housing, alternative energy solutions, and county offices. Details of how the advisory committee would be appointed, as well as the committee’s formal mission, was an item to be worked out for a board vote at a later date.

Andy LaBarre (D-District 7) talks with Bob Tetens, director of Washtenaw County parks & recreation.

On Sept. 4, a debate on the advisory committee proposal lasted about an hour, with concerns raised about the resolution’s focus on affordable housing. A staff memo listed several elements that would be explored, including: (1) affordable rental housing by the Ann Arbor housing commission; (2) an affordable housing green demonstration pilot project; (3) connection to the adjacent County Farm Park; (4) ReImagine Washtenaw Avenue design principles; and (5) other identified community priorities, such as geothermal, solar panels or community gardens.

According to that staff memo, this visioning work will be funded by $100,000 in grants from the U.S. Department of Housing and Urban Development and the Michigan State Housing Development Authority, with funds to support the development of affordable housing. The money was part of a $3 million federal grant awarded to the county in 2011 and administered by the county’s office of community & economic development (OCED).

On Sept. 4, several commissioners expressed interest in exploring a broader set of options, beyond affordable housing – including the possible sale of the property. Ultimately, the item was postponed. Board chair Yousef Rabhi had directed Greg Dill, the county’s infrastructure management director, to work with commissioners and staff to bring forward an alternative resolution on Sept. 18.

However, when the Sept. 18 agenda was posted online, the resolution remained unchanged, aside from the amendment made on Sept. 4.

A couple of hours prior to the start of the Sept. 18 meeting, LaBarre emailed commissioners and The Chronicle with a substitute resolution that he brought forward during the meeting. It was much more general in its direction, stripping out most of the details related to the affordable housing focus. In addition to the composition of the community advisory committee (CAC), the new resolution’s main directive was stated this way:

BE IT FURTHER RESOLVED that the Board of Commissioners directs the CAC to provide recommendations to the Board of Commissioners relative to disposition, including an alternatives analysis; and preferred methods of community engagement for the Board of Commissioners to undertake during the disposition process;

The resolution also set a deadline of Dec. 31, 2013 for the committee to deliver its analysis and recommendations to the board. [.pdf of substitute resolution]

Platt Road Advisory Committee: Board Discussion

There was scant comment on this item. Conan Smith (D-District 9) thanked LaBarre for the new resolution, saying that it reflected the concerns that had been raised on Sept. 4.

Outcome: The resolution passed unanimously.

The appointments to this committee have not yet been made. In conversation with The Chronicle after the Sept. 18 meeting, LaBarre and Rabhi indicated that they were in the process of identifying possible participants. It’s unclear whether the appointments will be made by Rabhi, as board chair, or whether he will nominate members to be confirmed by the board as a whole. The resolution indicates that the appointments will be made directly by the board chair. This differs from the typical appointment process, which entails nominations by the chair, followed by a confirmation vote of the board.

Non-Discrimination Policy

Commissioners were asked to give final approval to reaffirm and update the county’s affirmative action plan, as well as other nondiscrimination in employment-related policies. [.pdf of staff memo and policies] The primary change adds a prohibition of discrimination on the basis of gender identity, gender expression, and sexual orientation.

During public commentary on Sept. 4 – when an initial vote was taken – community activist Jim Toy and Jason Morgan, a board member of the Jim Toy Community Center, had spoken in support of the changes. No one from the public addressed the issue during the Sept. 18 meeting.

The resolution’s three resolved clauses state:

NOW THEREFORE BE IT RESOLVED that the Washtenaw County Board of Commissioners reaffirms its intent to prohibit discrimination in Washtenaw County against any person in recruitment, certification, appointment, retention, promotion, training and discipline on the basis of race, creed, color, gender, gender identity, gender expression, sexual orientation, national origin, age, handicap, veteran status, marital status, height, weight, religion and political belief.

BE IT FURTHER RESOLVED that the Washtenaw County Board of Commissioners shall strive to promote a workforce that welcomes and honors all persons and that provides equal opportunity in employment.

BE IT FURTHER RESOLVED that the Washtenaw County Board of Commissioners directs the Human Resources / Labor Relations Director to update the Affirmative Action Plan, as well as policies Prohibiting Discrimination in Employment, Sexual Harassment, and the County’s Statement of Equal Employment Opportunity to reflect the Boards commitment and reaffirmation described herein.

Non-Discrimination Policy: Board Discussion

Yousef Rabhi (D-District 8) made a minor amendment, which was accepted as friendly, to add in the word “sex” in the list of categories that cannot be discriminated against. He said it had been inadvertently edited out in the initial resolution.

Outcome: Changes to the non-discrimination policy were given final approval in a unanimous vote.

Change to Grant Approval Process

On the Sept. 18 was resolution that gives blanket approval in the future to nearly 30 annual entitlement grants received by the county totaling an estimated $8.8 million, beginning in 2014. Currently, each of those grants requires separate annual approval by the board. The item – one of several resolutions related to the office of community & economic development, which administers these grants – had been given initial approval on Sept. 4, 2013.

According to a staff memo, the entitlement grants are awarded on a reoccurring basis based on pre-existing state or federal allocation formulas. They require board approval as individual items, which “ends up consuming a significant portion of Board and staff time throughout a given year, as formula grants are on a variety of different fiscal years, and are awarded at several different points throughout the year. Furthermore, the piecemeal nature of the resolutions does not provide a holistic overview of the continuum of services provided to the community by OCED,” the memo states. [.pdf of staff memo regarding blanket grant approval]

There are several categories of grants that will continue to require a board vote, even with this blanket approval. Those categories include:

• competitive grants;
• grants that are not based on pre-established federal or state funding formulas or entitlement formulas;
• new grants, or ones that have not been previously awarded to or administered by OCED;
• grants that would require a county general fund appropriation in excess of the amount approved by the county board in the budget;
• grants that would require a change in OCED position control;
• grants more than $100,000 or 10% more than the anticipated amount, whichever is greater.

There was no discussion on this item.

Outcome: Commissioners gave final approval to authorize blanket approval for entitlement grants.

Federal & State Grants: Office of Community & Economic Development

Several items on the Sept. 18 agenda related to funding for programs managed by the county’s office of community & economic development, totaling nearly $2 million. They had been given initial approval on Sept. 4:

• $88,263 from the federal dislocated worker training (DWT) national emergency grant [.pdf of staff memo for DWT grant]
• $16,277 in federal funding for the Michigan Works! Service Center Operations [.pdf of staff memo for Michigan Works funding]
• $50,000 in federal Trade Adjustment Assistance (TAA) employer-based training foundation funding [.pdf of staff memo for TAA funding]
• $287,860 in federal Dept. of Energy weatherization funding [.pdf of staff memo for weatherization funds]
• $274,792 in federal Emergency Solutions Grant funding. The total program budget is $412,188, which includes $137,396 of in-kind matching contributions. The program supports the Housing Access for Washtenaw County (HAWC) partnership between Salvation Army, the Shelter Association of Washtenaw County and the Interfaith Hospitality Network of Washtenaw County. [.pdf of ESG staff memo]
• $516,156 in federal Community Services Block Grant (CSBG) funds [.pdf of CSBG staff memo]
• $21,828 in discretionary funds from the federal Community Services Block Grant (CSBG) to provide free income-tax preparation for low-income residents [.pdf of discretionary CSBG staff memo]
• $703,214 in federal funding for a senior nutrition program, with a total budget of $873,372. Additional funding comes from a USDA reimbursement of $100,001 and in-kind contributions of $70,157. [.pdf of senior nutrition memo]

There was no discussion on any of these items.

Outcome: All resolutions related to these grants were given final approval.

Staff for Natural Areas Stewardship

Final approval authorizing three new full-time jobs for stewardship of Washtenaw County’s nature preserves was on the Sept. 18 agenda.

Evan Pratt, Washtenaw County water resources commissioner.

The positions include: (1) a park laborer with a salary range of $31,507 to $41,766; (2) a park associate/principle planner with a salary range of $40,253 to $61,195; and (3) a stewardship coordinator, with a salary range of $43,373 to $56,586.

The additional jobs reflect a change approved by the county board nearly a year ago. At their Sept. 19, 2012 meeting, commissioners voted to amend the Natural Areas Ordinance No. 128, which established the county’s natural areas preservation program in 2000. The change removed a previous restriction that only 7% of millage funds could be used for management or stewardship. The goal was to use $600,000 per year for management and stewardship. Of that, roughly $240,000 would be used for ongoing stewardship activities, and $360,000 would remain to be invested in a dedicated reserve for long-term land stewardship.

According to a staff memo, the county’s parks system manages more than 4,500 acres of land in 13 parks and 22 preserves. In addition to the 556 acres of property already “actively” managed in the nature preserves, the staff also have active stewardship responsibilities for another 372 acres of prime natural areas within the county parks system. Overall, staff has identified 1,868 acres – or roughly 42% of the system’s current total acreage – as core conservation areas.

Funding for these new positions would be paid for entirely from the countywide natural areas millage, which was initially approved by voters in 2000 and renewed in 2010. The current 0.2409 mill tax raises roughly $3.5 million in annual revenues, and runs through 2021.

There was no discussion among commissioners about this item.

Outcome: Final approval was given to create these stewardship jobs.

CSTS Budget

Commissioners were asked to give final approval to the 2013-14 budget for the community support and treatment service (CSTS) department, from Oct. 1, 2013 through Sept. 30, 2014. The $34.96 million budget includes $29.598 million in revenue from the Washtenaw Community Health Organization (WCHO), which contracts with CSTS to provide services for people who are mentally ill and developmentally disabled. Other revenue comes from the Haarer bequest ($165,192), a contract with the county sheriff’s office ($246,846), smaller contracts with other entities, and fee-for-service billing. [.pdf of CSTS budget]

The budget calls for putting six full-time positions and two part-time jobs on “hold vacant” status. Those positions are currently unfilled.

The resolution also authorized county administrator Verna McDaniel to approve a service agreement with the WCHO, which is a separate nonprofit that’s a partnership between the county and the University of Michigan Health System.

Initial approval was given on Sept. 4, and there was no discussion about this item on Sept. 18.

Outcome: Commissioners unanimously voted to approve the CSTS 2013-14 budget.

Public Health Budget

The Sept. 18 agenda included a resolution giving final approval to the public health department’s $10.796 million budget for 2013-14, from Oct. 1, 2013 through Sept. 30, 2014. The budget includes $3.553 million in an appropriation from the county’s general fund, and $243,226 from the department’s fund balance. [.pdf of staff memo regarding public health budget]

As part of the budget, the public health department is proposing a net increase of 1.5 full-time equivalent positions. That results from eliminating 4.5 FTEs and creating 6 new positions. In addition, 5 positions will be put on “hold vacant” status, effective Oct. 1.

The resolution also included a proposed fee schedule for vaccines and clinic visits. [.pdf of proposed fee schedule] The minimum fee is proposed to be raised from $30 to $40.

There was no discussion of this item. Initial approval had been given on Sept. 4.

Outcome: The board unanimously gave final approval to the public health budget and fee schedule.

Trial Court Child Care Fund

The board was asked to give final approval to 2013-2014 state child care fund expenditures of $9,425,785 for the trial court’s juvenile division and county dept. of human services. About half of that amount ($4,712,892) will be eligible for reimbursement from the state. [.pdf of budget summary]

According to a staff memo, the child care fund is a joint effort between state and county governments to fund programs that serve neglected, abused and delinquent youth. Part of this year’s funding will support a new 10-bed treatment program that will be housed in the county’s youth center facility, opening in November of 2013. From the staff memo:

The treatment program in its initial phase will exclusively provide treatment services to females aged 12-17 using an integrated therapeutic treatment model. The program will offer a short-term 90 day option as well as a 6 to 9 month long-term treatment option. The second phase of treatment programming will expand services to males aged 12-17.

The new program is expected to generate revenue from out-of-county treatment referrals.

The expenditures will result in a net increase of 5.46 jobs. A total of 10.46 full-time equivalent positions will be created, and 5 FTEs will be eliminated.

Commissioners did not discuss this item, which had been given initial approval on Sept. 4.

Outcome: The board gave final approval to the trial court child care fund.

Stand Your Ground Repeal

A resolution urging the state legislature to repeal Michigan’s “Stand Your Ground” law was part of the Sept. 18 online agenda that had been posted on the county’s website on Friday, Sept. 13. But in a phone conversation with The Chronicle on the morning of Sept. 18, board chair Yousef Rabhi confirmed that he had decided to pull the resolution from the Sept. 18 meeting agenda.

Rabhi expected that at least two commissioners on the 9-member board – Felicia Brabec (D-District 4) and Rolland Sizemore Jr. (D-District 5) – would be absent. [It turned out that Ronnie Peterson (D-District 6) also did not attend the meeting.] And Rabhi expected that three other commissioners would vote against the resolution. Because of that, it would likely only garner four votes in support. Under the county board rules, a resolution requires votes from “a majority of the members elected and serving” in order to pass. With an anticipated 4-3 vote, it would fall short of achieving the 5-vote majority needed.

The resolution urged state legislators and Gov. Rick Snyder to repeal Public Act 309 of 2006 and Public Act 319 of 1990, and “to adopt common-sense gun regulations such as improved background checks, strengthened gun-free zones, and limits on the sale of high-capacity magazines.” [.pdf of proposed resolution originally on the Sept. 18 agenda]

A few opponents of a resolution to repeal the Michigan “Stand Your Ground” law attended the Washtenaw County board’s Sept. 18 meeting.

It was similar to a resolution passed by the Ann Arbor city council on Aug. 8, 2013. Activists have been calling for the repeal in the wake of a Florida verdict in the Trayvon Martin case that was handed down in mid-July. Three people had spoken at the county board’s Sept. 4 meeting, urging commissioners to take action.

However, opponents rallied after hearing about the proposed resolution. Michigan Open Carry Inc., an advocacy group based in Lansing, encouraged people who live near Ann Arbor to attend the Sept. 18 meeting and protest the resolution. A post on the group’s Facebook page stated: “We understand the County Building does not contain a court, but we have not verified this. If it is indeed not a court, open or concealed carry would be lawful and the county building would be covered under preemption.” There is no court in the building where county commissioners hold their meetings, at 220 N. Main St. in downtown Ann Arbor.

There were reports that buses would be transporting protesters to the meeting, and the county administration ordered extra security. Two sheriff’s deputies were on hand before the start of the meeting, as was an Ann Arbor police officer, whose patrol car was parked in front of the county administration building.

Having heard about the decision to pull the resolution off the agenda – the county administration posted a notice on its website earlier in the day – only a few opponents showed up to the meeting.

Stand Your Ground Repeal: Public Commentary

A resident from Manchester told commissioners that research by John Lott and others shows that when there are more responsible gun owners, there is a decrease in crime. Just the mere presence of a weapon can be a deterrent, he said, adding that he speaks from first-hand experience in Detroit. The resolution proposed by county commissioners isn’t in the best interest of the public, he said, and he urged them to vote against it.

George Lawrence of Whitmore Lake asked when the resolution would be brought back for a vote. Alicia Ping (R-District 3), who was chairing the ways & means committee meeting, indicated that it’s unclear when that will happen. “Don’t bring it back,” Lawrence told the board.

Robert Dick disputed some of the claims made in the resolution. It states that “Stand Your Ground” laws increase murder rates, but he pointed to a substantial decrease in murders since 2006, when the Michigan law was enacted. He provided a handout to commissioners with an analysis relevant to the issue, saying that after they read it, they might not be as happy to have their names associated with the resolution.

A resident of Lodi Township disputed the resolution’s assertion that Michigan’s “Stand Your Ground” law puts an unreasonable burden on prosecutors. He said that if Michigan repeals the law, the criminal justice system will operate on the “duty to retreat” legal doctrine, which he argued violates civil and constitutional rights. “Duty to retreat” also imperils citizens, he said, because it mandates that a citizen give ground to an attacker, “elevating the criminal’s rights above the victim’s rights.” It also denies the victim’s rights to be or remain in any legal location, he said. Therefore, the “duty to retreat” doctrine violates a citizen’s 14th Amendment rights to life, liberty and equal protection under the law.

“Duty to retreat” also requires citizens to tell police, prosecutors and juries why the fear of imminent death, great bodily harm or sexual assault was honest and reasonable, which violates a citizen’s 5th Amendment right to remain silent, he said. It also assumes a citizen is guilty until proven innocent, which violates the 4th Amendment right to due process. He argued that “duty to retreat” endangers citizens, if they have to pause and evaluate possible escape routes rather than focusing on how to survive an attack. If the victim does survive the attack, they’ll find themselves attacked later by the prosecutor. “Duty to retreat” adds insult to injury, he said, but Michigan corrected that injustice with a “stand your ground” law. He urged commissioners not to cede the public square to violent criminals, nor to ask Michigan to violate its citizens’ rights.

Judy Bonnell-Wenzel of Ann Arbor was the only person who spoke in support of the resolution on Sept. 18. By and large, she said, it’s the color of your skin that makes people think they should be afraid of you. Unfortunately in America, “there’s something in the air” that needs to be eradicated from our collective psyche, she said, “and that is racism.”

Stand Your Ground Repeal: Commissioner Follow-Up

Every agenda includes a slot for commissioner follow-up to public commentary. Andy LaBarre (D-District 7) thanked Judy Bonnell-Wenzel for coming to the meeting and speaking out. He said she’s a constituent of his and someone he’s known for several years, who is active in a lot of causes that he believes in.

Yousef Rabhi (D-District 8) also thanked Bonnell-Wenzel as well as all the other residents who’d come to the meeting. It’s always good to hear from citizens on any issue, he said. Rabhi clarified that the “Stand Your Ground” resolution had been removed from the agenda and therefore wouldn’t be debated during the meeting.

It’s unclear when the item will be brought forward again. Initially, Rabhi had indicated that he would put the resolution on the Oct. 2 agenda. However, that night the board will be presented with a draft budget for 2014-2017, which is expected to be the focus of the meeting.

Micro Loan Program for Small Business

The Sept. 18 agenda included a resolution on a new countywide micro loan program for small businesses. The item had received initial approval on Sept. 4, 2013, and was on the agenda for a final vote on Sept. 18.

Commissioner Alicia Ping (R-District 3) and county administrator Verna McDaniel.

The resolution would authorize the county’s office of community & economic development to contract with the Center for Empowerment and Economic Development to manage this program. CEED already handles a smaller micro loan program focused on the eastern side of the county. [.pdf of CEED micro loan proposal]

Micro loans would range from $500 to $50,000, for businesses that can’t get conventional financing. CEED has a $5 million borrowing capacity from the U.S. Small Business Administration, and expects to make $300,000 in micro loans in the next two years in Washtenaw County. The county would provide $45,000 out of revenues from levying the Act 88 millage. Of that amount, $35,000 would be used to seed a loan loss reserve fund and $10,000 would be designated for initial operating costs.

To be eligible for a micro loan, businesses must be based in Washtenaw County and have been turned down by two financial institutions for loans over $20,000. Other requirements include: (1) a business plan for businesses that are less than 3 years old; (2) a marketing plan for businesses that are 3 years or older; (3) two years of financial statements and tax returns; and (4) a personal financial statement.

The county is allowed to levy up to 0.5 mills under Public Act 88 of 1913, but currently levies a small percentage of that – 0.06 mills, which will bring in $696,000 this year. It’s used for programs run by the county’s office of community & economic development, and to fund the county’s MSU extension office. Act 88 does not require voter approval. It was originally authorized by the county in 2009 at a rate of 0.04 mills, and was increased to 0.043 mills in 2010 and 0.05 in 2011.

Last year, Conan Smith (D-District 9) of Ann Arbor proposed increasing the rate to 0.06 mills and after a heated debate, the board approved the increase on a 6-5 vote. [See Chronicle coverage: "County Board Debates, OKs Act 88 Tax Hike."] Increasing this tax was one of several revenue options that the county commissioners discussed at their Aug. 8, 2013 working session, as part of a broader strategy to address a projected $3.9 million budget deficit in 2014. [See Chronicle coverage: "County Board Eyes Slate of Revenue Options."]

The county has identified economic development as one of its main budget priorities.

Micro Loan Program for Small Business: Board Discussion

Andy LaBarre (D-District 7) made a motion to postpone the item until the board’s Oct. 2 meeting.

He did not state a reason during the meeting and there was no discussion on the item.

Outcome: Commissioners voted to postpone a final vote on the micro loan program until Oct. 2.

When queried after the meeting by The Chronicle, LaBarre indicated that with three commissioners absent – Felicia Brabec (D-District 4), Rolland Sizemore Jr. (D-District 5) and Ronnie Peterson (D-District 6) – it was unclear whether there were sufficient votes to pass the measure. Under the county board rules, a resolution requires votes from “a majority of the members elected and serving” in order to pass – that is, five votes. The resolution regarding the state’s “Stand Your Ground” law had been pulled from the agenda for the same reason.

When an initial vote was taken on Sept. 4, Dan Smith (R-District 2) had cast the only dissenting vote against this program. He objects to using taxpayer dollars for a program where funds are allocated without the opportunity for input at public meetings, and believes there are other avenues that small businesses can use for financing.

Hearing for Indigent Veterans Services Tax Hike

No one spoke at a public hearing held on Sept. 18 to get input on a proposed increase to the Washtenaw County tax that supports services for indigent veterans and their families.

The current rate, approved by the board last year and levied in December 2012, is 0.0286 mills – or 1/35th of a mill. The new proposed rate of 1/30th of a mill would be levied in December 2013 to fund services in 2014. It’s expected to generate $463,160 in revenues.

The county is authorized to collect up to 1/10th of a mill without seeking voter approval. That’s because the state legislation that enables the county to levy this type of tax – the Veterans Relief Fund Act – predates the state’s Headlee Amendment. The county first began levying this millage in 2008. Services are administered through the county’s department of veterans affairs.

Increasing this tax was one of several revenue options that the county commissioners discussed at their Aug. 8, 2013 working session, as part of a broader strategy to address a nearly $4 million projected budget deficit in 2014. See Chronicle coverage: “County Board Eyes Slate of Revenue Options.”

The board will likely take an initial vote on this tax increase at its Oct. 2 meeting.

Appointments

There was one appointment on the Sept. 18 agenda: April Baranek, representing Washtenaw County on the Southeast Michigan Regional Energy Office (SEMREO) Community Alliance for a term ending Dec. 31, 2014.

Conan Smith (D-District 9).

Conan Smith (D-District 9) thanked board chair Yousef Rabhi (D-District 8) for making the nomination. He described the alliance as a collaboration of six local units of government that work together on energy financing for local government projects and for community energy-efficiency projects. It took a long time to create the alliance, he said. The bylaws had to be reviewed by the state attorney general’s office and authorized by the governor’s office, which happened over the summer. He felt that the alliance would do great work.

Outcome: The appointment of April Baranek was approved unanimously.

By way of background, this alliance dates back to 2010. The county board voted initially to join the Southeast Michigan Regional Energy Office (SEMREO) – a separate entity from the SEMREO Community Alliance – at its March 17, 2010 meeting. At the time, SEMREO was a division of the Michigan Suburbs Alliance, a Ferndale-based nonprofit that’s led by Conan Smith. Smith abstained from the March 17, 2010 vote, following conflict-of-interest concerns raised by other commissioners. SEMREO later split off from the Michigan Suburbs Alliance as a separate organization, but Smith serves on its board of directors.

Washtenaw County became involved in the SEMREO Community Alliance in 2011. On Aug. 3, 2011, the county board voted to join the SEMREO Community Alliance and approved the original interlocal agreement. The alliance was created in order to pursue certain grant funding that’s not available to municipalities directly. It includes six partners: Washtenaw County, and the cities of Lathrup Village (in Oakland County); Sterling Heights and Roseville (in Macomb County); and Lincoln Park and Southgate (in Wayne County). [.pdf of original interlocal agreement] Smith was absent from the Aug. 3, 2011 meeting when the Washtenaw County board voted to join the alliance.

At the county board’s Feb. 6, 2013 meeting, Smith was also absent for the vote to amend the SEMREO Community Alliance interlocal agreement, arriving at the meeting after the vote had been taken. However, he asked the board if he could record affirmative votes for all items that he had missed – which included the SEMREO Community Alliance item. None of the other commissioners objected.

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: Road Commission

Dan Smith (R-District 2) asked board chair Yousef Rabhi (D-District 8) for an update on the Washtenaw County road commission.

Rabhi reported that Ken Schwartz, a former county commissioner who currently serves as one of the three county road commissioners, has been appointed by the Superior Township’s board of trustees to replace former supervisor Bill McFarlane, who resigned recently because of health issues. The appointment was made at the township board’s Sept. 16, 2013 meeting.

According to a post on the township’s website, Schwartz’s term as supervisor begins Oct. 1 and ends at noon on Nov. 20, 2014. The elected office will be on the ballot for the August 2014 primary and the November 2014 general election.

Although the township notice indicates that trustees had interviewed three candidates – Schwartz, current trustee Alexander Williams, and Evert Van Raden – the decision to appoint Schwartz had been anticipated. In an email sent to county commissioners on Sept. 6, Rabhi wrote that he had directed staff to prepare a notice for the potentially vacant seat on the road commission, if Schwartz were appointed supervisor. [.pdf of Rabhi's email] That notice was posted on the county’s website on Sept. 17.

Applications for the road commissioner job are being accepted until Sept. 25, 2013, with the county board likely making an appointment at its Oct. 2 meeting. The position would be for the remainder of a six-year term, through Dec. 31, 2018. Applications – including a letter of interest and resume, with a home address – should be sent to Peter Simms of the county clerk’s office, P.O. Box 8645, Ann Arbor, Michigan 48107. Applications can also be submitted via email to simmsp@ewashtenaw.org, or via fax to 734-222-6528.

In his Sept. 6 email, Rabhi indicated that several members of the community had already expressed interest in the road commissioner job, and that he had received one formal letter of interest. He wrote: “I urge you to keep an open mind and give each qualified candidate that applies full consideration.”

Other current road commissioners are Doug Fuller and Fred Veigel, who also is a member of the county’s parks & recreation commission. The salary for road commissioners, which is set by the county board, is $10,500 annually.

At the Sept. 18 county board meeting, Rabhi said he hoped to bring forward a nomination at the board’s Oct. 2 meeting.

Alicia Ping (R-District 3) asked whether the board was definitely going to fill the vacancy. Rabhi said he’d like to replace Schwartz, and didn’t think that would preclude the board from discussing whether to expand the number of road commissioners or absorb the road commission into the county operations. “But I’d like to view that as a separate process,” Rabhi said.

Dan Smith suggested talking about this more at length when the vacancy is actually in effect – after Oct. 1. However, he said, he’d be a little concerned about confirming someone to fill a partial term that’s more than three years, without more clarity about the board’s future direction regarding the road commission.

Conan Smith wondered what the process would be for commissioners to ask questions of the candidates. Rabhi suggested contacting the candidates directly.

Communications & Commentary: Hiring Freeze

During public commentary at the start of the meeting, Doug Smith reminded commissioners that at their Sept. 5, 2013 working session, he had urged the county to implement a hiring freeze until Jan. 1, 2014. He said he’d also asked commissioner Felicia Brabec (D-District 4) to put an item on the Sept. 18 agenda about that issue for discussion, “but she apparently has decided not to do that.” [Brabec was absent from the Sept. 18 meeting.]

From left: Commissioner Kent Martinez-Kratz (D-District 1) and Doug Smith.

Vacancies don’t need to be filled before Jan. 1, he said – it’s the fiscally responsible thing to do. He has a friend who works for the county, who told him that her supervisor wants to fill all the vacancies in the department before Jan. 1 “because it would be unfair to the new employees to miss out on the pension plan.” Those supervisors should be looking out for the taxpayers well-being, Smith said.

By way of background, current employees participate in a defined benefit pension plan, which will be closed to new employees at the end of 2013. Employees hired starting Jan. 1, 2014 will be part of a defined contribution plan instead. The long-term liabilities of the county’s pension plan and retiree healthcare costs are a concern, and prompted efforts earlier this year to push for a major bond proposal that was ultimately dropped.

During his Sept. 18 public commentary, Smith also asked for an appeal to his most recent request under the state’s Freedom of Information Act. The response given to him by the county’s FOIA coordinator is illegible, he contended. “They need to stop playing games in giving me things that are illegible, that they know are illegible.”

Communications & Commentary: Budget Update

Felicia Brabec (D-District 4), who as chair of the board’s ways & means committee also serves on the county’s budget task force, was absent from the Sept. 18 meeting. Vice chair Alicia Ping (R-District 3) gave a budget update on Brabec’s behalf. The draft budget is in the final stages of preparation, and will be presented to the board on Oct. 2.

The board’s priority committee meetings are completed, with draft outcome statements related to five areas: heath and human services, economic opportunity, mobility and civic infrastructure, environmental impact, and internal labor force. [The work of those committees was reviewed at a board working session on Sept. 19, which will be covered in a separate Chronicle report.]

The administration will also a 2013 third-quarter budget update to the board in November.

Present: Andy LaBarre, Kent Martinez-Kratz, Alicia Ping, Yousef Rabhi, Conan Smith, Dan Smith.

Absent: Felicia Brabec, Ronnie Peterson, Rolland Sizemore Jr.

Next regular board meeting: Wednesday, Oct. 2, 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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In February 2013, county commissioners voted to refinance debt for a sewer system in Lyndon and Sylvan townships, on the county’s west side. The resolution authorized the sale of refunding bonds that would be used to pay the remaining principal on existing bonds that were sold in 2004. That year, the county sold $5.115 million in bonds to help the townships pay for the sewer. Of that amount, $2.225 million remained to be repaid, prior to the refunding. The project built sewers at Cavanaugh, Sugar Loaf, Cassidy, Crooked, and Cedar Lakes. It’s funded through special assessments on property around those lakes and payments by the Sugar Loaf Lake State Park and Cassidy Lake State Corrections Facility.

In March 2013, the county received bids for the refunding, with the lowest bid from Hastings City Bank at an interest rate of 1.749838%. As a result of this refunding, only $695,000 in debt remains on this bond issue. Lyndon Township was able to cash reserves and redeemed all of their outstanding debt for this project.

The contract amendments given final approval by county commissioners on Sept. 4 remove Lyndon Township from any responsibility for debt retirement and reduce the amount of debt for Sylvan Township. All other provisions of the contract remain in place until the bonds are paid off in 2022. Both township boards have previously approved these changes, according to a staff memo.

This sewer system is separate from a controversial water and wastewater treatment plant project in Sylvan Township. For more background on that project, see Chronicle coverage: “County Board OKs Sylvan Twp. Contract.”

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

In February 2013, county commissioners voted to refinance debt for a sewer system in Lyndon and Sylvan townships, on the county’s west side. The resolution authorized the sale of refunding bonds that would be used to pay the remaining principal on existing bonds that were sold in 2004. That year, the county sold $5.115 million in bonds to help the townships pay for the sewer. Of that amount, $2.225 million remained to be repaid, prior to the refunding. The project built sewers at Cavanaugh, Sugar Loaf, Cassidy, Crooked, and Cedar Lakes. It’s funded through special assessments on property around those lakes and payments by the Sugar Loaf Lake State Park and Cassidy Lake State Corrections Facility.

In March 2013, the county received bids for the refunding, with the lowest bid from Hastings City Bank at an interest rate of 1.749838%. As a result of this refunding, only $695,000 in debt remains on this bond issue. Lyndon Township was able to cash reserves and redeemed all of their outstanding debt for this project.

The contract amendments given initial approval by county commissioners on Aug. 7 remove Lyndon Township from any responsibility for debt retirement and reduce the amount of debt for Sylvan Township. All other provisions of the contract remain in place until the bonds are paid off in 2022. Both township boards have previously approved these changes, according to a staff memo.

This sewer system is separate from a controversial water and wastewater treatment plant project in Sylvan Township. For more background on that project, see Chronicle coverage: “County Board OKs Sylvan Twp. Contract.”

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]

Doug Smith, standing, talks with other members of the Washtenaw Watchdogs before the start of the July 10, 2013 county board meeting. (Photos by the writer.)

Several of those who spoke are affiliated with the Washtenaw Watchdogs. The group has raised concerns about the bonding and is prepared to launch a petition drive that would force the proposal to be put on the ballot for voters to approve.

The bond initiative, publicly proposed in May, was intended to cover unfunded pension and retiree healthcare obligations – for the Washtenaw County Employees’ Retirement System (WCERS) and Voluntary Employees Beneficiary Association (VEBA). The original maximum amount for the bonds had been estimated at up to $345 million. But updated actuarial data resulted in a lower estimate of about $295 million.

However, on July 3, board chair Yousef Rabhi (D-District 8) and county administrator Verna McDaniel issued a joint statement announcing a decision not to put bond-related action items on the July 10 agenda. They cited the need to address unanswered questions, including uncertainty about the state approval process. No date has been set to reschedule action, if any, on the proposal.

In addition to the bond proposal hearing, the board held three other public hearings during its July 10 meeting: on two brownfield plans in Ann Arbor – for 544 Detroit St. and Packard Square (the former Georgetown Mall) – and for annexing land from Scio Township into the village of Dexter to accommodate the expansion of Dexter Fastener Technologies, known as Dextech. All items were subsequently approved by commissioners.

The board also gave final approval to a range of infrastructure projects totaling about $5 million for county government facilities – including redeveloping the Platt Road site in Ann Arbor where the old juvenile center was located. An amendment brought forward by Andy LaBarre (D-District 7) called for creating a 9-member advisory committee to guide the dispensation of the Platt Road site, which is located in his district. Ronnie Peterson (D-District 6) raised concerns about the authority of such a committee. He was assured that the board retains control over whether to act on the committee’s recommendations. Details of how the advisory committee will be appointed, as well as the committee’s formal mission, will require approval from the board at a later date.

In other action, the board gave initial approval to a modest increase in staff for the Washtenaw County clerk/register of deeds office – bumping up a staff position from part-time to full-time – primarily to handle an increase in processing passports and concealed pistol license applications. Commissioners also made several appointments to various boards and commissions, nominated by Rabhi as board chair. He announced he wasn’t yet ready to make nominations to the county’s historic district commission.

Also pushed back was a final vote on a notice of intent to eliminate a lump-sum budgeting approach for Washtenaw County’s court system. Initial approval for this action came on a 5-4 vote at the board’s June 5, 2013 meeting. But on July 10, Alicia Ping (R-District 3) – who had originally brought forward the proposal – asked for postponement until the board’s Oct. 16, 2013 meeting, citing communications she’d had with trial court chief judge Donald Shelton. The vote to postpone was 6-2, with dissent from Dan Smith (R-District 2) and Conan Smith (D-District 9). Rolland Sizemore Jr. (D-District 5) was absent.

In addition to feedback about the bonding proposal, commissioners heard from leaders of two nonprofits – Washtenaw Success by 6 Great Start Collaborative and Interfaith Hospitality Network-Alpha House – about the need to support human services funding. Uncertainty about the upcoming budget has caused concern among nonprofits that have been historically funded by the county.

Also during public commentary, two members of the Church of the Good Shepherd in Ann Arbor thanked commissioners and staff for quickly restoring domestic partner benefits to nine county employees, following recent court rulings that enabled the county to reinstate such benefits.

Facial hair got a minor mention at the July 10 meeting, when Rabhi told Dan Smith: “Your beard is epic – congratulations on it.” Smith used the opening to mention that he’s growing the beard for his role as Lazar Wolf in the upcoming production of “Fiddler on the Roof.” The show runs from July 19-21 at the Whitmore Lake High School Theater. He received a round of applause from the board. Peterson joked that he was glad for the explanation – Peterson had been prepared to reach out to Smith with the name of his barber.

Bond Proposal & Budget

Though a controversial bond proposal had been pulled from the agenda the previous week, on July 10 commissioners held the scheduled public hearing for that proposal . The original bonding proposal of potentially up to $345 million was intended to cover unfunded pension and retiree healthcare obligations – for the Washtenaw County Employees’ Retirement System (WCERS) and Voluntary Employees Beneficiary Association (VEBA). The board had set the public hearing at its meeting on June 5, 2013, and had also intended to take initial votes on July 10 on several items related to the bonding.

However, on Wednesday, July 3, board chair Yousef Rabhi and county administrator Verna McDaniel issued a joint statement announcing a decision not to put the bond-related items on the July 10 agenda. They cited the need to address questions and concerns that had been raised by commissioners and the public, as well as uncertainty related to the state approval process that’s required for this type of bonding. [See Chronicle coverage: "County to Push Back Vote on Bond Proposal."]

Some commissioners have also asked whether alternatives to a bonding approach might also be viable, but the administration has not provided other options, other than a list of major cuts to programs and services. The original plan put forward by the administration was to bond for up to $345 million, although officials believed the amount would be lower than that, pending an updated actuarial report.

The printed agenda for the July 10 meeting still included the bond-related items, though the items had been removed from the agenda before the meeting. The printed agenda listed the proposed bonding amount at $295.115 million. That’s the figure that Rabhi reported in a phone interview with The Chronicle on July 3.

Responding to a follow-up query from The Chronicle on July 16, McDaniel said the $295 million figure was based on updated preliminary estimates for unfunded actuarial accrued liabilities (UAAL) totaling $272.999 million for both WCERS and VEBA. Interest and fees on that amount for bonding is being recalculated, she reported, but it will likely be a week or two before the new calculations are completed.

After the July 10 board meeting, the county administration released an updated “experience study” from Buck Consultants, the actuarial firm used by the county. An experience study is the basis for the final actuarial report, which has not yet been completed. [.pdf of 2013 experience study report] A preliminary report on this study was presented at a special joint session of the WCERS and VEBA boards on June 25. The 7-member WCERS board includes county commissioners Dan Smith and Conan Smith, county administrator Verna McDaniel and county finance director Kelly Belknap. Conan Smith also sits on the 5-member VEBA board, which is chaired by county accounting manager Pete Collinson.

Buck Consultants had recommended adopting a 10-year amortization schedule for the county’s unfunded actuarial accrued liabilities (UAAL), in order to cover those liabilities as quickly as possible. The county administration had originally expected to pay an estimated $30 million contribution toward the WCERS and VEBA obligations in 2014, if bonding did not occur. That amount was based on the 10-year amortization schedule.

At the June 25 special meeting, however, the WCERS and VEBA boards voted to adopt a longer, graduated amortization schedule for the UAAL of 27 years (WCERS) and 26 years (VEBA), with the amortization schedule decreasing annually by a two-year period. This change will lower the UAAL contributions county will need to make to cover its obligations each year.

In an email to The Chronicle on July 16, McDaniel indicated that revised estimates for the 2014-17 budget will be reported at the county board’s July 24 ways & means committee meeting. She estimated the amount for 2014 is now expected to be about $26 million, instead of $30 million.

The final actuarial report by Buck Consultants is expected to be delivered to the WCERS and VEBA boards later this week. Those boards have set a joint meeting for Tuesday, July 30 to review the material. The meeting starts at 10:30 a.m. in the boardroom of the county administration building, 220 N. Main St. in Ann Arbor.

Bond Proposal & Budget: Public Commentary & Public Hearing

The first public hearing on the bond proposal had been held on June 5. That public hearing drew four people who all expressed caution about the possible action, as some attendees suggested a millage or additional budget cuts to cover the retiree obligations – instead of bonding.

On July 10, more than a half dozen people spoke at the public hearing as well as during two opportunities for public commentary. Many of the speakers were affiliated with a group called the Washtenaw Watchdogs, which has raised concerns about the bonding and is prepared to launch a petition drive that would force the proposal to be put on the ballot for voters to approve. In addition to the speakers, several other members of the Washtenaw Watchdogs – many of them wearing the group’s T-shirt – attended the meeting.

The back of a T-shirt for the Washtenaw Watchdogs.

Doug Smith, one of the group’s organizers, spoke at both opportunities for public commentary, as well as at the bond proposal’s public hearing. He told commissioners that he’d watched presentations at the board’s last working session on June 6, and noted that the projections all assume that the bonds could be sold at a 4% interest rate, while the market returns would be about 6 or 6.5%. The proposal ignores the millions of dollars it would cost to initiate an intermediate trust and to sell the bonds, he said, as well as the cost of managing the trust. The bonds would be taxable, and could be recalled early, Smith said – which is good for the county, but makes the bonds less attractive to investors. Current rates for taxable municipal bonds are rising, and will likely to continue to increase, he noted.

Smith suggested looking at the county’s current pension trusts to gauge possible investment returns, and the cost of managing those investments. The WCERS trust has earned an average 8.2% since it was formed in 1981, he noted, but most of the higher returns were in the 1980s and 1990s, when inflation and interest rates were much higher than now. The country was also going through a tech revolution at the time, he said, and it’s unlikely the markets will see another period like that. Since 2000, the net gains for the WCERS trust have been 2%. The VEBA trust has an average 3.5% net gain since it was formed in 1997, and since 2000 the net gain is 2.4%. The trusts are paying more than $1 million in expenses to financial managers that are underperforming, he said.

Smith also pointed to the actuarial risk – what if retirees live longer than expected? If the county ends up needing to pay more to retirees while it also repays the bonds, that’s a money crunch. “But all of you will be long-gone from the board by then,” he said. It’s also possible that the bonds will be sold at up to 5.5% interest, and that the return on investments from those funds will be lower, he noted – that’s not an unrealistic scenario.

He then described two scenarios for possible outcomes of the bond’s investment trust. If the county borrows $300 million and invests it in the stock market, in one scenario the investment return might be 10% ($30 million) in the first year. But if the required contribution that year to the retirement trust is $29 million, and the investment expenses are $1 million, you end the year with the same $300 million. Smith described a second scenario in which the county loses 10% ($30 million) in the first year, but still has to make the $29 million contribution to the retirement trust and the $1 million in expenses. So the county ends the year with only $240 million. All future years would reflect that initial loss, he said.

In 2008, the WCERS fund lost 33% on its equity investments, Smith noted. Though there might not be a worse year in the future, he said, it’s likely there will be another financial meltdown of some sort in the next 25 years. Bond counsel John Axe and the Eastern Michigan University professor who made a presentation at a board working session earlier this year made rosy projections, he said. But those projections don’t consider that funds must be paid out every year to the WCERS and VEBA trusts, Smith said. The payouts make the timing of losses important, and the county might never recover from early losses.

Smith also pointed out that most experts feel the market is currently overvalued. And because there’s an inverse relationship between the bond market and stock market, the county might be putting taxpayer money into the stock market at just the wrong time, he said. What will happen if the intermediate trust runs out of money before the bonds are paid off? The county would have to pay off the bonds as well as contribute to the retirement trusts. “That’s going to be a much worse cash flow problem than you’re now facing.” He asked commissioners not to approve the bonding proposal, or at the very least to let the voters decide.

If the board votes to move ahead with the bonding, Smith said, he and others are prepared to gather the required signatures to put the proposal on the ballot as a voter referendum. They need only 15,000 signatures, he noted, and they already have about 25 volunteers to circulate petitions. The Washtenaw Watchdogs will have a booth at the Ann Arbor art fairs on Liberty Street near Division, and they’ll be going to other events and canvassing neighborhoods as well. He also encouraged potential volunteers to visit the group’s website.

Ray Williams asked how many commissioners would mortgage their house to play the stock market. That’s what the county is planning with this bond proposal, he said. “If you are not prepared to do the same with your own money, why is it a good idea for the taxpayers of Washtenaw County to do the same thing?” He didn’t want Washtenaw County to be like other counties that had made risky investments and that were now bankrupt. It’s hard to believe the county can’t find ways to eliminate its deficit without bonding, he said. The decision will affect citizens for the next 25 years, Williams said, and it should be put on the ballot so that taxpayers can decide. If the board votes to bond, Williams said he’d do everything he could to help collect the 15,000 signatures needed to force a ballot referendum.

Thomas Partridge also spoke at both opportunities for public commentary, as well as during the public hearing. He expressed concern over the proposed bonding, and urged the board not to do it. The county’s ability to bond should instead be used to build affordable housing and to provide other services for this area’s most vulnerable residents. He criticized the fact that most of the county’s revenues come from property taxes, which he characterized as a 19th century concept that gives property owners more influence in the political process. He accused Democratic commissioners of supporting a totalitarian state administration that aims to limit the role of government, even though there are homeless people outside the door of the county administration building, he said.

Judy Bloss began by saying she didn’t pretend to understand the complexities for the bonding proposal. She could understand the desire to have her children take care of her, but she had questions about the county’s bond counsel, John Axe, having his daughter profiting from that deal. [Axe & Ecklund provides a 15% discount on its fees if the county also hires Municipal Financial Consultants Inc. (MFCI) as the financial consultant on the bonding deal. Although it wasn't disclosed at public meetings about the proposal, MFCI president Meredith Shanle is Axe’s daughter.]

During her second turn at public commentary, Bloss told commissioners that she’s experiencing some unfunded liabilities in her own life, related to medical expenses. However, she’s not planning to borrow money from her home equity line of credit to pay those bills and to invest in the stock market, hoping to realize a profit. It’s not the job of county government to borrow money and invest it to make a profit, she said. Bloss noted that about 70% of the county budget funds mandated expenses, but the rest is discretionary. She suggested as a starting point to cut taxpayer funding for Planned Parenthood, which she accused of killing babies. She didn’t want blood on her hands.

A man from Webster Township told commissioners that they were elected to spend the money that the county collects from him and other taxpayers. But now, the board is looking to borrow money on behalf of the taxpayers. In the past, the county has borrowed for things like the jail and civic improvements, he said. It’s a noble reason to pay for retiree pension and health care, but the county would be borrowing against the fiscal well-being of its residents. It’s disrespectful if commissioners don’t put it on the ballot for voters to decide, he said. The July 4th celebration was initially based on the issue of rebelling against taxation without representation, he noted. And even though the bond proposal isn’t direct taxation, he concluded, it’s still a burden on the community.

Les Heddle referred to the information about the bonding proposal that’s posted on the county’s website. Many pertinent questions are still unanswered, he said, including the fact that the county is using data that’s 18 months old. It’s hard to believe that there isn’t a way to get more current data, he said. He believed current data would show a much lower level of unfunded liabilities. He also didn’t understand how the board had been ready to vote on this proposal when the staff hadn’t provided all of the necessary information regarding the state requirements. Who’s doing the due diligence? he wondered. It’s an egregious error and lack of judgment by the staff. He said he was trying not to get angry, because he had a lot of friends on the board. He indicated that if this had happened in the private sector, it would not be acceptable. “There should be some accounting for that, all the way up and down the line,” he said.

Heddle said that in his business, if he doesn’t live up to his clients’ expectations, they can take their money elsewhere. [Heddle is a financial advisor with Edward Jones in Ypsilanti.] He again questioned why the county administration wasn’t able to provide a proposal based on more up-to-date information. The board needs to get an answer from the administration about why they’re using data that’s so old. It might give some insight into why the county is in its current situation, Heddle said. He also criticized the county’s bond proposal website for not being updated regularly.

From left: County financial analyst Tina Gavalier and finance director Kelly Belknap.

During the public hearing, Heddle addressed several issues related to the list of answers to Frequently Asked Questions on the county’s bonding website. For example, one of the FAQs asked what will happen to the proceeds if the intermediate trust outperforms the bond payments, he noted, but it doesn’t ask what happens if the trust underperforms. Heddle said it’s difficult to find useful, up-to-date information, or anything that indicates what will happen if the bonding doesn’t work as planned.

Stephen Ranzini suggested an alternative to the current bonding proposal, which he called misguided. He indicated that although interest rates are low, the stock market is overvalued and that will result in future substandard performance. The short-term benefit from the “financial engineering” that the bond deal promises will turn into future losses. He told commissioners that in 1988 when he was 23 years old, Bank One lent him $3.2 million to buy a tiny bank that’s today is known as University Bank. The loan for this leveraged buyout was made because “I’d figured out something the sellers didn’t know – that the bank’s pension fund was overfunded.” After buying the bank, he terminated and defeased the bank’s pension plan by buying an annuity from a triple-A-rated life insurance firm. The extra funds from that deal – about $800,000 – were used to fund an employee stock ownership plan, he said, which purchased common stock in the bank holding company and paid down the loan to Bank One.

In a similar way, Ranzini said, the county could defease its retirement plan by buying an annuity from a top-rated insurance firm. It would require taking on debt, he noted, but this approach would lock in today’s low interest rates and eliminate future investment risk. Because insurance companies are “hungry” for these types of long-term annuities, he added, it would likely cost less than the bond proposal. The downside is that the county would lose control over its pension fund dollars, but it’s no great loss if the county doesn’t intend to use those funds for local economic development, Ranzini argued: “In fact, it prevents possible future mischief.” He recommended this same approach to all local units of government.

Wes Prater, a former county commissioner from York Township, noted that the county’s No. 1 guiding principle – as posted on the county administrator’s website – is to ensure long-term fiscal stability. He believes in that principle, and there’s a lot of work to be done. Since 2007, the county’s long-term liabilities have increased over $15 million each year, he said. Some of those liabilities don’t show up on the balance sheet, he noted. At the end of 2012, the county had net assets of $230 million, Prater said, compared to $446 million in long-term liabilities, including between $250 million to $300 million for pension and retiree health care. The board needs to look at what has happened in the past, Prater said, and at how the county has arrived at its current situation. He said he was willing to step forward and work on a committee to research how to address these issues.

Prater also wondered when the updated actuarial report and the independent financial analysis of the bond proposal would be completed. How do citizens get the information they need to make informed decisions? he asked. Prater also wanted to know how the intermediate trust fund would work. There are several issues that need to be cleared up, he concluded.

Bond Proposal & Budget: Board Discussion

Ronnie Peterson said he appreciated the delay in voting on the bond proposal. He noted that advocates for human services programs are interested in the impact on their funding if the county doesn’t bond. [Two leaders of nonprofits that the county funds – Washtenaw Success by 6 Great Start Collaborative and Interfaith Hospitality Network-Alpha House – spoke during public commentary, urging continued support of human services.] He assured these groups that he will advocate for them. Peterson asked for the board chair or administrator to explain what will happen next regarding the bond proposal. He vowed that the county would honor its obligations to retirees, regardless of whether the board decides to bond.

Board chair Yousef Rabhi responded, first by describing the public outreach that had been done related to the bond proposal, including public hearings, coffee hours, a press conference and public forum. None of that had been required, he said, but the board believes in engaging citizens in these decisions. The delay is due in part because of a recognition that more questions need to be answered, he said. Several commissioners had raised concerns that need to be addressed, he added, and the state still is figuring out the process for this kind of bonding.

Two months ago, Rabhi said, when the bonding proposal was first publicly floated, it wasn’t known how long the state approval process would take. So it’s not necessarily the case that the staff was remiss in getting information, he said, it’s just a new process. “I don’t want anybody to blame anybody.”

The fact that residents showed up that night to address the board is a testament to the fact that this has been an open process, Rabhi said. The public has been engaged and has asked questions.

Moving forward, he said, the county must have a balanced budget for 2014 by the end of this year, independent of any decision to bond. The board has held discussions at its meetings and retreats about the budget, he noted, but now it’s time to really focus on priorities and engage the community on that. The board will be moving into an intensive process now, delving into the budget and providing guidance to the administration, he said. Rabhi said he feels optimistic about the process, and that the county is emerging from the recession and looking at better times ahead.

Later in the meeting, Dan Smith asked for clarification about the process by which the board will explore other alternatives to the bonding proposal. He said he wasn’t asking about specific alternatives at this point, but wanted to know how various alternatives would be discussed and vetted by the board.

From left: County commissioner Yousef Rabhi (D-District 8) and Andy Brush, the county’s IT manager.

Rabhi replied that any alternatives would be brought forward as part of the budgeting process. Felicia Brabec will be leading the budget process for the board, he said, including a discussion at the board’s July 11 working session. Dan Smith noted that until now, the board has generally discussed the budget and the bonding proposal separately, although he observed that obviously the topics are intertwined. Now, he said, it seems those discussions will be brought more closely together than previously.

Peterson asked whether the discussion would revolve around a four-year budget. When Brabec noted that the board had authorized the administration to move forward in developing a four-year budget plan, Peterson pointed out that he had voted against that action. [The board had taken that vote at its May 1, 2013 meeting, over dissent from Peterson and Rolland Sizemore Jr.] Peterson said he would vote against a four-year budget if it’s presented. Multi-year budgets sometimes result in problems getting pushed back, he said, or in borrowing a lot of money to deal with the county’s obligations.

Andy LaBarre, who chairs the board’s working sessions, noted that the following night there would be a discussion of budget priorities, and he implored everyone to attend. Peterson reported that he had a previous commitment and would not be present.

LaBarre also responded to a remark made by Doug Smith during public commentary. LaBarre noted that the EMU economics professor mentioned by Smith was Jens Stephan, who LaBarre said gave up about 4.5 hours of time to talk with commissioners at the June 6 working session. Stephan wasn’t advocating for any particular approach, LaBarre stressed, and was simply showing commissioners a tool they could use in making their decisions. “I want to make sure that’s on record, that he did us a public service,” LaBarre said.

Rabhi also provided a phone number that residents can call to give input on the bonding proposal via voicemail: (734) 222-6666. He also requested that the staff update the website with answers to the questions that had been raised during public commentary and the public hearing.

Peterson wanted to know that if the county changes its plan for the bonding proposal, would the board hold another public hearing? Rabhi replied that none of the public hearings were required by law. But if commissioners feel the need for more public participation, they can certainly schedule more public hearings, he said. Peterson felt it would be respectful to citizens to hold another public hearing, if the proposal changes in any way.

It’s unclear what actions might be taken next regarding the bonding proposal. The administration has previously stated that the bonding proposal was crucial to developing a four-year budget from 2014-2017. The administration has set a goal of identifying $6.99 million in structural reductions for the overall 2014 general fund budget, based on the assumption that the bonding would take place. Without the bonding, the county had expected to pay an estimated $30 million contribution toward these obligations in 2014, with additional amounts varying in subsequent years. That amount will likely be lower – estimated by McDaniel at around $26 million – based on updated actuarial information and recent decisions by the WCERS and VEBA boards.

Commissioners had previously voted to hold an extra meeting this month, on July 24. That meeting will be held as planned, but instead of bonding, the main topic will be a discussion of budget priorities.

Outcome: This was not a voting item.

Brownfield Plans

Two brownfield plans – for projects located in Ann Arbor – were on the agenda for both initial and final votes of approval, following public hearings on each plan. The projects are at Packard Square (the former Georgetown Mall) and 544 Detroit St. The Ann Arbor city council had signed off on the plans at its June 17, 2013 meeting.

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.”

Both plans had been recommended for approval by the county’s brownfield development authority at its June 6, 2013 meeting.

Brownfield Plans: 544 Detroit St.

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.

According to a staff memo, up to $698,773 of local and state taxes will be captured for eligible activities, administrative costs, and the Washtenaw County brownfield redevelopment authority local site remediation revolving fund over an estimated 25-year period. The county’s annual millage revenues on that site are estimated to increase from about $277 now to $6,150 after the period for brownfield tax increment financing is completed. [.pdf of 544 Detroit St. brownfield plan]

At a July 9 working session of the Ann Arbor planning commission, city planning manager Wendy Rampson had reported that the site was more contaminated than the developers originally thought. Although it was clear that the site was contaminated, she said, “I don’t know that they knew how much it would cost to remediate it.”

At the county board’s July 10 public hearing on this project, two people spoke. Thomas Partridge criticized the board for not providing sufficient information about items on the agenda. He called on the owners of these sites to explain how the sites became contaminated, and asked that the current developers explain why the site can’t be developed without governmental assistance. That assistance could better be spent on other programs for the public benefit, like Head Start and affordable housing, he said.

Bret Stuntz spoke briefly on behalf of the developer – 544 Detroit Street LLC – saying he was there to answer any questions. Stuntz is a project manager at AKT Peerless Environmental & Energy Services.

Brownfield Plans: Packard Square

For Packard Square – the former Georgetown Mall site at 2502-2568 Packard St. – approval related to an 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 also 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. The project entails building more than 200 apartments and 20,000 square feet of commercial space.

Equipment at the Packard Square site. Buildings at the former Georgetown Mall have been demolished.

The amendment to Packard Square’s brownfield plan would add two eligible activities that qualify for brownfield tax increment financing: 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. According to a staff memo, TIF-eligible activities total $3,582,222. Over the 14-year period of the plan, up to $5,840,557 of local and state taxes will be captured for eligible activities, administrative costs, and the Washtenaw County brownfield redevelopment authority local site remediation revolving fund. This amount is unchanged from when the plan was initially adopted.

County millage revenues from the property are estimated to increase from about $8,701 annually to $64,138 after the period for brownfield tax increment financing is completed. [.pdf of Packard Square brownfield plan amendment]

The developer of this project is The Harbor Companies of Bloomfield Hills, via Harbor Georgetown LLC.

Ann Arbor city planning manager Wendy Rampson had updated planning commissioners about the status of Packard Square at the commission’s July 9 working session. The good news was that the buildings have been demolished and the contaminated soil has been removed, she reported. But heavy rains had compromised a retaining wall on the northwest side of the site, adjacent to the neighboring property, and the wall had to be shored up. Rampson also reported that EQ – the company that was doing the remediation work under contract with the developer – had “demobilized” from the site because they hadn’t been paid. She indicated that the financing situation was tenuous. “We’ll see – it’s still early,” she told planning commissioners. “But it’s possible that this may be where the project ends.” [Representatives of the development told The Chronicle at the county board's July 10 meeting that the project was moving ahead.]

Two people spoke at the county board’s July 10 public hearing for Packard Square. Thomas Partridge said he was concerned about the practice of local governments applying for federal or state funds simply because those funds are available. In this case, public funds are being used to remove toxic substances and contaminated soil from these sites, so the need for those funds should be substantiated at a public meeting, he said. Partridge was concerned about the possibility of contaminated soil being spread around the neighborhood. Developers should be able to finance these projects without public assistance, he concluded.

John Byl introduced himself – he works for the law firm Warner Norcross & Judd, which is working on the Packard Square project. He thanked Nathan Voght and other county staff for their work, and thanked the board for considering the brownfield plan amendment. The maximum amount is unchanged, he noted, but a couple of categories are being added to the list of things that can qualify for TIF. Byl thanked the Ann Arbor city council and county brownfield authority board for approving the plan. He noted that Bruce Measom, representing the developer, was on hand to also answer any questions that commissioners might have.

During a break at the July 10 meeting, Byl and Measom told The Chronicle that the project was moving ahead.

Brownfield Plans: Board Discussion

The public hearings reported above were held at the board meeting, which takes place after the meeting of the ways & means committee, on which all board members serve. But the brownfield items were first considered at the ways & means committee for an initial vote, prior to the public hearings.

As the board reached the brownfield agenda items at its ways & means committee meeting, Thomas Partridge spoke up from the audience, saying he wanted to comment. Felicia Brabec, who chairs the ways & means meetings, told him that it wasn’t an appropriate time to address the board, but that there would be a public hearing on these items at the regular board meeting that night.

Ronnie Peterson (D-District 6).

Their exchange prompted commissioner Ronnie Peterson to raise some procedural concerns about the approval process. He felt the public hearing should be held prior to the initial vote at the board’s ways & means committee meeting. So he thought that Partridge’s interruption had been appropriate.

When Brabec told Peterson that the public hearing would happen at the board meeting, he protested, saying “I’ve been around this track a few years” and he found it out of the norm. “This is backwards,” he said, and disrespectful to the public. He apologized to Partridge. The board was being asked to take action without knowing how the public feels, he said. [For agenda items that require public hearings, those hearings are generally held at the regular board meeting, just prior to a final vote on the item. There is typically not a public hearing before the board takes its initial vote at the ways & means meeting.]

Peterson objected to taking the final vote on the same night as the initial vote, even though it was the summer schedule. [Typically, an initial vote is taken at the ways & means committee, followed by a final vote at the regular board meeting two weeks later. For most of the year, the ways & means committee and regular board meetings are held every two weeks, in back-to-back sessions on the same night. During the summer, those meetings are usually held only once a month.]

Andy LaBarre clarified with the county’s corporation counsel, Curtis Hedger, that there would be an additional public commentary time at the start of the board meeting, as well as the public hearing – two additional opportunities for input. Hedger said that under law, since the public hearing comes before the final vote, there is adequate opportunity for public input. In a perfect world, he added, it would be better to hold the public hearing on a different day, and then take an initial vote at ways & means on one date, and a final vote at the regular board meeting two weeks later. But an accelerated approach has been taken in the past, he noted, especially during the summer months when agenda items often receive an initial and final vote on the same night.

Peterson responded, saying “Expediency sometimes gets you in a lot of trouble.” He wanted to take the time to be cautious. He said he’d be voting no on this item because he didn’t feel there had been adequate public input, adding that it’s no reflection on the projects. He called his record “99 and a half percent voting pro-business.”

Conan Smith said he wanted to clarify the history of this process. A brownfield plan goes through the county’s brownfield authority, and any plan for property in Ann Arbor also goes to the city of Ann Arbor. There are public commentary opportunities at both the county brownfield authority board and at the city council. Then there’s public commentary at the county board’s ways &  means committee meeting before the initial vote, followed by another general public commentary time at the start of the board meeting, and a public hearing on the brownfield plan itself. [Partridge had spoken at the ways & means general public commentary prior to this discussion, but did not talk about the brownfield plan at that point.]

Smith argued that the public hearing can’t be scheduled before the regular board meeting, because the item hasn’t been properly brought before the board until then. [After consulting with Hedger later in the meeting, Smith retracted this statement. When an item is on the ways & means committee agenda, it is considered to be before the board. The ways & means committee is a "committee of the whole," meaning that all board members serve on it.]

There’s been abundant opportunity for public participation, Smith said. He also pointed out that action on the Packard Square plan is an amendment to change the scope of the project, but it doesn’t change the brownfield investment. He characterized it as a “ministerial” change. There has already been a robust public process for that Packard Square plan, Smith said.

Yousef Rabhi noted that he serves on the county’s brownfield development authority board. He praised the 544 Detroit St. project, saying it would be a great addition to the neighborhood and will clean up a contaminated site.

The Packard Square project is in his district, Rabhi said, and he asked Nathan Voght – an economic development specialist with the county – to give an update. Voght described how the board had authorized applying for a $1 million state grant two years ago, which had been received last year. The part of the project covered by the grant started in late May of 2013, and included demolishing the buildings and cleaning up contaminated soil. That’s been done, he said, and there will be a slight period of “demobilization” as the developer puts in place all of the financing and development plans.

Peterson clarified that he had no problems with the plans or the staff, calling the projects “outstanding.” He felt the board needed to follow proper procedures, and suggested that the summer schedule should be reconsidered.

Regarding 544 Detroit St., Dan Smith said he has nothing against the project. But he noted that the board continues to approve various TIF programs – for brownfields, downtown development authorities (DDAs) or local development finance authorities (LDFAs) – without a plan for the outcomes of those investments. “We pretty much rubber stamp these programs. We don’t really have any criteria to evaluate them against,” Dan Smith said, adding that anyone who votes against any particular project would be perceived as being against that specific project or community. He said he wanted to raise that concern again.

Outcome: To protest the process, Ronnie Peterson cast the sole vote against both brownfield plans on the initial vote at the ways & means committee meeting, but joined all other commissioners in supporting the plans in the final vote at the board meeting.

Strategic Plan for County Facilities

Commissioners were asked to give final approval to a range of infrastructure projects totaling about $5 million for county government facilities – including redeveloping the Platt Road site where the old juvenile center was located. Commissioners had given initial approval to the overall proposal – called the “strategic space plan” – at their June 5, 2013 meeting.

In addition to the Platt Road site, other projects in the plan include:

• 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.
• 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. 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.

Strategic Plan for County Facilities: Board Discussion

Andy LaBarre proposed a two-part amendment. One part directed staff to use the county’s existing vendor pool for work on these projects, whenever feasible.

The amendment also called for the creation of a 9-member community advisory committee to guide the dispensation of the Platt Road site, which is located in LaBarre’s district. The space plan proposes demolishing the former juvenile center and exploring redevelopment of the site at 2260 and 2270 Platt Road for affordable housing, alternative energy solutions, and county offices. Details of how the advisory committee will be appointed, as well as the committee’s formal mission, will need to be worked out and will require approval from the board at a later date.

LaBarre said that his amendment was intended to address some of the issues that had been raised when commissioners discussed this item on June 5.

Regarding the advisory committee, Ronnie Peterson said the proposal was a “total surprise” to him, and it seemed to be giving control over a $1 million property to an entity other than the county board. There are procedures for dealing with the dispensation of county property, he said, and he wondered what authority the committee would have.

Corporation counsel Curtis Hedger clarified that the committee is advisory only. It has to report back to the board, he added, and the board can either accept the committee’s recommendations or not. “Ultimately, it’s still up to the board as to what they want to do, collectively, with the Platt Road site,” Hedger said. The intent of the committee is to have citizen input.

Peterson indicated that the board has dealt with other controversial proposals, like the jail expansion, without this kind of committee. He said he wasn’t against the advisory committee or citizen input, but he was concerned about setting a precedent. Peterson wondered if they could postpone action until there were more details about how the process would work. Hedger replied that a more detailed resolution would be required at a future meeting to appoint the members and approve the committee’s charge.

At the request of LaBarre, Hedger drafted a revised version of that portion of the amendment to address Peterson’s concerns:

Be it further resolved that the board of commissioners create a nine-member Platt Road community advisory committee to review and develop a recommendation for the disposition of the county’s Platt Road site. The composition and charge of the advisory committee will be determined by the board of commissioners at a later date, provided however that the board of commissioners shall have the authority to ultimately determine the disposition of the Platt Road site.

Board chair Yousef Rabhi clarified that he would be nominating people to the committee, who would then be confirmed by the full board. Alicia Ping felt the process should follow the board’s normal process for other boards and commissions, with people submitting applications for the positions. Rabhi indicated that as an ad hoc committee – not a standing committee – the process would be different, but that applications can be solicited if commissioners wanted to handle it that way. Ping encouraged that approach.

Regarding the vendor pool portion of the amendment, Ping asked for more background about why this direction was necessary. Dill replied that any of the county’s capital projects use the vendor pool to help augment outside professional services that are hired. The pool allows the county to be more efficient and cost effective, he said, in terms of keeping up with a project’s timeline. Every company that’s part of the vendor pool has already gone through the county’s procurement process, he noted, and has been vetted by the purchasing department.

Ping wondered if the county had a sufficient number of companies in the vendor pool to match all of the needs for upcoming capital projects. No, Dill replied. But using the vendor pool would allow projects to use some companies that have already gone through the RFP (request for proposals) process, rather than issuing RFPs for every aspect of a project.

Ping clarified that for larger projects, the work goes out for a competitive bid. Dill said that when a project goes over a certain dollar amount, the county moves away from using the vendor pool and uses a competitive bidding process. The strategic space plan encompasses several smaller projects, he added.

Conan Smith noted that the amendment is worded in such a way that could lead to a very large piece of work being handled by a firm in the vendor pool, rather than going out for a competitive bid. He proposed amending LaBarre’s amendment to designate using the vendor pool for projects under $100,000. His suggestion was accepted as a friendly amendment.

Outcome: Commissioners unanimously gave final approval to the strategic space plan, as amended.

County Courts Budget

A proposal to postpone the final vote on a notice of intent to eliminate a lump-sum budgeting approach for Washtenaw County’s court system was on the July 10 agenda.

The board had voted last month 5-4 to give initial approval to the notice – at its June 5, 2013 meeting. The proposal had been brought forward by commissioner Alicia Ping. The move caught some commissioners by surprise, though for several weeks during budget deliberations Ping had expressed concerns over the county’s approach to funding the court system. Voting in favor of initial approval on June 5 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 had noted that her goal wasn’t necessarily to cut funding for the courts, but rather to be more transparent about where the money goes. Giving  notice to terminate the agreement would have provided the board the option to end the agreement.

No court officials had attended the June 5 meeting, because the proposal had not been on the published agenda. However, Donald Shelton, chief judge of the trial court, subsequently spoke with several commissioners, including Ping, about their intent. The courts have historically been in favor of a lump-sum approach – rather than the line-item budget provided by most other units of county government.

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] 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.

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]

County Courts Budget: Board Discussion

Ping reported that she and Dan Smith had met with Shelton, who had provided a detailed document regarding the court’s budget from 2008. [.pdf of trial court budget document] She said Shelton had indicated a willingness to meet with commissioners and the administration about this issue. Shelton had wanted to make clear to the public that the courts submit a line item budget to the county board, she said. However, Ping noted, “they can submit to us whatever they want, and then they can do with it whatever they want, according to current law.”

She said she wanted to give commissioners time to digest the additional information, and to hear the county administrator’s budget proposal for the general fund, which is expected in October. If the board decides to move forward with terminating the memorandum of understanding, it would still give the courts enough time to prepare for the next budget year (2015).

Outcome: On a 6-2 vote, commissioners postponed the item until the board’s Oct. 16, 2013 meeting. Dissenting were Dan Smith (R-District 2) and Conan Smith (D-District 9). Rolland Sizemore Jr. (D-District 5) was absent.

Dextech Property Annexation

Commissioners were asked to give final approval to the annexation of land from Scio Township into the village of Dexter. They had taken an initial vote at their June 5, 2013 meeting.

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 stated 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 Dexter’s largest employer.

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]

Dextech Property Annexation: Public Hearing

Four people spoke at a public hearing on the annexation. Thomas Partridge said the proposal reflected 19th century politics, and he urged all the townships, villages and cities in Washtenaw County to combine resources into one metropolitan authority under one government, with shared tax revenue and shared purpose. He indicated that such an approach would provide resources for health care, transportation, education, food and other needs.

Dexter village president Shawn Keough thanked commissioners for putting it on their agenda in a timely fashion. He called Dexter Fastener Technologies a wonderful business in the community. As the largest business in the Dexter area, the firm provides a lot of taxpayer dollars to the village, Scio Township and the county, he said. He asked for the board’s support.

Wes Prater said he’s a member of the state boundary commission. The village of Dexter has been working steadily for about two years trying to become a city, he said. There was some difficulty in getting everything done, he added, but the communities worked together, and the outcome will be good overall. He joked that he and Keough “have had our differences, but it’s all worked out.”

A representative of Dextech told commissioners that the firm needs to expand to meet the needs of its customers, which are primarily in the automotive industry. He said the firm doesn’t take this move lightly, and company officials appreciate the cooperation of Scio Township and Dexter to come up with a plan that’s beneficial to all concerned.

Dextech Property Annexation: Board Discussion

Ronnie Peterson expressed support for economic development, and joked that the firm should visit the county’s east side. “You will find it’s a little quicker and easier to develop on the eastern side of the county,” he said, adding that he’d love to show the firm some sites. [Peterson represents District 6, which includes the city of Ypsilanti and portions of Ypsilanti Township.]

Dan Smith wondered how the boundary change would affect Dexter’s attempt to become a city. Dexter president Shawn Keough responded, saying that it has a very small impact procedurally at this time. After the village receives cityhood status for its current boundaries, an additional boundary modification would be required to bring in that parcel.

Outcome: Commissioners voted unanimously to approve the annexation.

Staff for County Clerk’s Office

On the agenda for initial approval was a modest increase in staff for the Washtenaw County clerk/register of deeds office, primarily to handle an increase in processing passports and concealed pistol license applications.

The change involves creating a full-time administrative coordinator position from a job that’s currently part-time (an 0.64 full-time equivalent position). The total cost for that full-time position is estimated at $56,902 – or an additional $15,631 in general fund support. It’s expected that a decrease in the need for temporary workers will help offset the payroll increase, as will a projected surplus in license and permit revenue. According to a staff memo, that revenue is expected to exceed projections by at least $33,824.

From left: Ed Golembiewski, the county’s director of elections, and county clerk/register of deeds Larry Kestenbaum.

Until mid-2008, the office had 5 full-time employees (FTEs) in the elections and administration division, which handles passport applications and concealed pistol licenses (CPL). The economic downturn and subsequent restructuring dropped staffing levels to 3.64 FTE positions.

CPL applications increased 140% between 2009 to 2012, to an average 2,091 applications per year compared to 870 in 2009. This year is expected to set a record for CPL applications. For the first quarter of 2013 there were 1,168 applications, compared to 540 in the first quarter of 2012. [.pdf of application data from 2004-2013] [.pdf of approved licenses from 2008-2013]

If the total number of applications in 2013 reaches projections of at least 3,225, then that will generate revenue of $83,824 to the general fund – above the original 2013 budget amount of $50,000.

In addition, on July 10 commissioners were asked to give initial approval to shift support for one full-time position in the clerk/register of deeds office back into the general fund, at a cost of $56,117. That position – a records management specialist – is currently funded by revenues from the office’s “automation fund.” Until 2008, that position was paid for out of the general fund.

The automation fund gets revenue from a $5 surcharge on every deed that’s processed, and is a statewide authorized fee that pays for technology related to the work of the clerk/register of deeds office. It pays for digitizing the county’s land records from 1824 through 1958, which are currently available only on paper. The goal is to relocate the paper records and clear out space in the lower level of 200 N. Main Street, as part of the county’s “space plan.” Digitization will also allow the public to quickly search and retrieve county records electronically, which will generate usage revenues for the general fund. Revenues for online usage increased from about $220,000 in 2010 to about $323,000 in 2012.

According to a staff memo, the number of documents recorded by the county clerk/register of deeds office has increased from fewer than 53,000 documents in 2008 to more than 85,000 documents expected in 2013. Revenues from the office to the general fund have grown from $2.248 million in 2011 to $3.198 million in 2012. Those revenues are expected to continue growing as the local real estate market recovers.

Staff for County Clerk’s Office: Board Discussion

Dan Smith pointed out that this is the third time in 2013 that the board has been asked to approve an increase in staffing. In isolation, each increase makes sense, he said. But as the headcount changes over time, it’s troubling.

County clerk Larry Kestenbaum responded, saying: “This doesn’t change headcount at all.”

Felicia Brabec asked Kestenbaum to elaborate and explain why it doesn’t change the headcount. Kestenbaum said the change entails moving a position from part-time to full-time. That’s based on the need to cover the tremendous increase in applications for concealed weapon licenses. The other change is to shift the funding source for an existing position into the general fund. As the land economy has improved, the number of associated transactions handled by his office has increased, Kestenbaum said. It’s important to keep up with those transactions to avoid delay, he added.

Kestenbaum also noted that his office is giving up its space in the lower level of the administration building at 200 N. Main, as part of the strategic space plan for county facilities. The documents stored there are being digitized, and he wasn’t expecting the move to happen on such an accelerated schedule. Money for this digitization process comes from the automation fund, he noted. By shifting the funding for one employee out of the automation fund and into the general fund, it frees up more funds from the automation fund to pay for digitizing documents. He noted that the paper documents will still be stored, but not at that location. He also reminded commissioners that the increased general fund revenue that’s generated by his office will more than cover the cost of the employee.

Outcome: Commissioners unanimously gave initial approval to the requested changes for the clerk/register of deeds office. A final vote is expected at the board’s meeting in August.

Appointments

Appointments to five Washtenaw County boards and commissions were on the July 10 agenda.

Board chair Yousef Rabhi made the following nominations:

• Police services steering committee: Scott Cooper, representing non-contract areas for a term ending Dec. 31, 2014.
• Washtenaw County/City of Ann Arbor community corrections advisory board: Tori Noe for a term ending Dec. 31, 2013.
• Food policy council: Seema Jolly, filling a slot representing a nutritionist, for a term ending Dec. 31, 2013.
• Workforce development board: Renee Adorjan for the community-based organization slot for a term ending Dec. 31, 2014; and Fred Pittman for the veterans slot for a term ending Dec. 31, 2015.
• River Raisin watershed council (alternate): Evan Pratt.

Rabhi said he planned to hold off on making nominations to the county historic district commission.

Outcome: All nominations were confirmed unanimously without discussion.

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: Human Services Funding

During public commentary, two people spoke about the importance of funding human services organizations. Margy Long, director of Washtenaw Success by 6 Great Start Collaborative, thanked commissioners for their support of human services in this community. She described the importance of investing in early childhood programs. Success by 6 has one goal, she said – to ensure that every child in Washtenaw County reaches kindergarten in good health and ready to succeed in school.

Margy Long, director of the Washtenaw Success by 6 Great Start Collaborative, talks with county commissioner Andy LaBarre (D-District 7).

As many as two out of four kids don’t meet that goal at this point, she said, and there are over 40 organizations collaborating to find ways to improve that number. Research has shown that the first five years of a child’s life are critical to their success in learning throughout their life, she said. Long pointed to the return on investment that comes from support during those early years of childhood, including an increased likelihood in graduating from high school and earning a higher income later in life, and less likelihood of criminal activity.

Nicole Adelman, executive director of Interfaith Hospitality Network-Alpha House, described the nonprofit as an emergency shelter for children and families experiencing homelessness. Her organization works with families to find employment, increase income, and find affordable housing. She also serves on the board of the HIV-AIDS Resource Center (HARC) and the Washtenaw Housing Alliance. Adelman said she knew she was preaching to the choir for many commissioners, and she thanked them for their support.

IHN-Alpha House receives about $90,000 each year from the county’s office of community & economic development through the coordinated funding approach. Losing that funding would devastate the agency, she said. It doesn’t get much worse than not having a place to live or knowing where your next meal is coming from, she said. The demand already exceeds the available resources, Adelman added. Budget cuts are incredibly hard, she said, but she’s asking the board to dig deeper and find somewhere else to cut. She noted that she’s a 30-year resident of Washtenaw County, and she votes. The county funds services for people who have nowhere else to go. She said she’d bet that the board’s constituents are willing to vote for those who support human services funding. “I know I will,” she concluded.

The county handles its support for human services through a coordinated funding approach managed by the county’s office of community & economic development. The approach involves a partnership of the county, the city of Ann Arbor, the Washtenaw Urban County, the United Way of Washtenaw County, and the Ann Arbor Area Community Foundation. Felicia Brabec, during her report as ways & means committee chair, noted that the International City/County Management Association (ICMA) has selected the coordinated funding program to profile as a best practices case study on social sustainability. [.pdf of ICMA letter]

Communications & Commentary: Benefits for Same-Sex Partners

Cynthia Emerick, a Manchester resident and member of the Church of the Good Shepherd in Ann Arbor, thanked commissioners “for moving so quickly to correct a wrong.” Nine employee families of Washtenaw County government lost health care coverage when the state banned domestic partner benefits for public employees, she noted. [As background, new 10-year labor contracts that the county negotiated earlier this year – to avoid the impact of Michigan's "right to work" law – resulted in the elimination of the county’s healthcare benefits for domestic partners. When the county’s previous labor contracts were opened for renegotiation, that triggered the need to comply with a state law passed in late 2011: PA 297, which restricted public entities from offering domestic partner benefits. For the county, those benefits had been offered to “other eligible adults” who met certain criteria, like sharing the same residence. Nine county employees had been using those benefits, which had been eliminated as of April 1.]

But in late June – soon after a U.S. Supreme Court decision on the federal Defense of Marriage Act (DOMA) – a ruling came down from U.S. District Judge David Lawson in Michigan that blocked the state from enforcing its ban on domestic partner benefits. Emerick noted that board chair Yousef Rabhi and the county administration acted quickly, and in less than one business day, those nine county employees had their health care coverage reinstated. She thanked the county staff and commissioners for their action, saying it affected a lot of people.

Deborah Dean-Ware, pastor of the Church of the Good Shepherd, also thanked the board. She said her church has a long history of supporting the gay/lesbian/bisexual/transgender community, and they are working hard to see marriage equality become reality in Michigan. The county’s work on the domestic partner benefits “is a very powerful statement for justice,” she said.

Communications & Commentary: Head Start

Felicia Brabec reported that the Washtenaw Intermediate School District has received a notice of award from the federal government, designating the WISD as the organization that will take over management of the Washtenaw Head Start program. The county has been administering the program for more than four decades, but last year decided to relinquish that duty. Brabec said that plans are being made for handling the transition.

Present: Felicia Brabec, Andy LaBarre, Kent Martinez-Kratz, Ronnie Peterson, Alicia Ping, Yousef Rabhi, Conan Smith, Dan Smith.

Absent: Rolland Sizemore Jr.

Next regular board meeting: Wednesday, July 24, 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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However, on Wednesday, July 3, board chair Yousef Rabhi and county administrator Verna McDaniel issued a joint statement announcing a decision not to put the bond-related items on the July 10 agenda. They cited the need to address questions and concerns that had been raised by commissioners and the public, as well as uncertainty related to the state approval process that’s required for this type of bonding. [See Chronicle coverage: "County to Push Back Vote on Bond Proposal."]

Another public hearing on the bond proposal had been held on June 5. That public hearing drew four people who all expressed caution about the possible action, as some attendees suggested a millage or additional budget cuts to cover the retiree obligations – instead of bonding. More than a half dozen people also spoke at the July 10 hearing, as well as during two opportunities for public commentary. Many of the speakers were affiliated with a group called the Washtenaw Watchdogs, which has raised concerns about the bonding and is prepared to launch a petition drive that would force the proposal to be put on the ballot for voters to approve. Doug Smith, one of the group’s organizers, told commissioners that the Washtenaw Watchdogs will have a booth at the Ann Arbor art fairs, and is recruiting volunteers.

Some commissioners have also asked whether alternatives to a bonding approach might also be viable, but the administration has not provided other options. The plan put forward by the administration was to bond for up to $345 million, although officials believed the amount would be lower than that, pending an updated actuarial report.

It’s unclear what actions might be taken next. The administration has previously stated that the bonding proposal was crucial to developing a four-year budget from 2014-2017. The administration has set a goal of identifying $6.99 million in structural reductions for the overall 2014 general fund budget, based on the assumption that the bonding would take place. Without the bonding, the county had expected to pay an estimated $30 million contribution toward these obligations in 2014, with additional amounts varying in subsequent years.

The board had also voted to hold an extra meeting this month, on July 24. That meeting will be held as planned, but instead of bonding, the main topic will be a discussion of budget priorities.

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]

County administrator Verna McDaniel, standing, at a June 27, 2013 public forum to discuss a major bonding proposal. Seated from the left are county commissioners Yousef Rabhi and Andy LaBarre, and former Ann Arbor Public Schools trustee Bob Rorke.

A joint statement by board chair Yousef Rabhi and county administrator Verna McDaniel, posted on the county’s website late Wednesday afternoon, cited the need to address questions and concerns that had been raised by commissioners and the public, as well as uncertainty related to the state approval process that’s required for this type of bonding.

Just last week, McDaniel held a public forum to provide information about the bonding process. At the June 27 forum, which was attended primarily by county staff and former or current elected officials, McDaniel presented only two options: (1) issue bonds to cover the full amount of unfunded liabilities, estimated to total more than $250 million, or (2) implement dramatic cuts in county services and programs.

This had been the administration’s approach since first publicly floating the idea in mid-April, and since work started on the plan privately in November 2012. A website devoted to the bond proposal, posted last month, includes a list of potential cuts to discretionary programs if the bonding did not move forward. The cuts include items like the elimination of 12 sheriff deputy road patrol positions and cutting the Washtenaw Health Plan. [.pdf of discretionary cuts] [.pdf of implications for county funding to outside agencies]

A public hearing on the bond proposal was held on June 5, and the board had voted to schedule another public hearing – to be held on July 10. The June 5 public hearing drew four people who all expressed caution about the possible action, as some attendees suggested a millage or additional budget cuts to cover the retiree obligations – instead of bonding.

Some commissioners have also asked whether alternatives to a bonding approach might also be viable, but the administration has not provided other options. The plan put forward by the administration was to bond for up to $345 million, although officials believed the amount would be lower than that, pending an updated actuarial report. A preliminary report, delivered late last month, has set the total of unfunded liabilities at $295,115,000 according to Rabhi.

This is the second time that action has been pushed back. Items related to the bonding proposal were originally slated for the May 15, 2013 agenda, but Rabhi pulled those items from the agenda after concerns were raised that the process was moving too quickly for adequate public input and board deliberation.

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. At this point, the law has a sunset of Dec. 31, 2014.

The county had expected to pay an estimated $30 million contribution toward these obligations in 2014, with additional amounts varying in subsequent years. The county administration was looking for ways to manage those payments as it develops a four-year budget proposal for 2014-2017. The administration has set a goal of identifying $6.99 million in structural reductions for the overall 2014 general fund budget, based on the assumption that the bonding would take place.

The county’s bond counsel, John Axe, was instrumental in crafting the law that makes this kind of bonding possible. He had been working on the proposal for Washtenaw County since November 2012, and has advocated for bonding for the entire amount of the unfunded liabilities. At the board’s May 2, 2013 working session to discuss the proposal, Axe told commissioners: “If you don’t issue the bonds, you’re going to have horrible budget problems.”

A financial analysis prepared by Municipal Financial Consultants Inc. (MFCI) – led by Axe’s daughter, Meredith Shanle – assumed that the county would pay an average interest rate of 4% on the bonds, or a total of $239 million in interest over the life of the 25-year bond. At that rate, the county would pay a total of $583 million in combined interest and principal, based on bonding for an estimated $345 million. Fees paid to Axe would have been an estimated $485,000. The county planned to invest the funds from the bonds and earn an average return on its investments of 6.5%.

Part of the process for issuing this type of bond includes approval by the Michigan Dept. of Treasury. [.pdf of bond application requirements] To date, no other municipality has completed the approval process. Saginaw County was the first to apply, making its application in February.

Several actions related to bonding proposal had been expected to take place at the July 10 meeting, prior to the July 3 decision to delay on a vote. Those actions would have included:

• 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 would have been 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 would have received the bond proceeds, and trustees would have been appointed to oversee the money managers to handle the investments.

The board had also voted to hold an extra meeting this month, on July 24. In a phone interview with The Chronicle on July 3, Rabhi said the July 24 meeting will be held as planned. Instead of bonding, however, the main topic will likely be a discussion of budget priorities.

At this point, Rabhi said, no date has been identified for when a bonding proposal might be back on the board’s agenda.

Here’s the statement from Rabhi and McDaniel, issued late afternoon on July 3:

As all of you are aware, the proposed retiree health care and pension bonding is scheduled for the July 10, 2013, Ways & Means agenda. The opportunities which the County has presented for public input has demonstrated that there are many unanswered questions pertaining to this proposed bonding. In addition, Commissioners still have concerns and questions about the bonding, which we wish to resolve prior to bringing the bonding before the Board for deliberation.

Also, while doing due diligence for Wednesday’s meeting, Finance Director, Kelly Belknap, discovered that the Michigan State Department of Treasury, which must ultimately approve the bonding, still has not developed a template of the items which a local governmental entity must provide to be approved. This matter has been discussed with Board leadership and we have agreed to put a hold on the proposed bonding to give the Board and Administration enough time to explore other options for the County to follow and address its budget needs. The proposed bonding items have been removed from the July 10, 2013, Ways & Means agenda.

If you have any questions or concerns, please contact Washtenaw County Administrative Office at (734) 222-6894, Yousef Rabhi, Chair of the Board, at (734) 548-5159, or email the County Administrator at WCAdministrator@ewashtenaw.org.

Sincerely,

Commissioner Yousef Rabhi, Chair of the Board & Verna McDaniel, Washtenaw County Administrator

For background, see Chronicle coverage: “County Board Debates $345M Bond Proposal” and “County Budget, Bonding Decisions Loom,” and “County Grapples with Court Budget.”

The Chronicle could not survive without regular voluntary subscriptions to support our coverage of public bodies like the Washtenaw County board of commissioners. Click this link for details: Subscribe to The Chronicle. And if you’re already supporting us, please encourage your friends, neighbors and colleagues to help support The Chronicle, too!

According to the staff memo accompanying the agenda item, the first in the series of bonds is expected to be for around $3.8 million and will be sold directly to the Michigan Finance Authority as part of its Drinking Water Revolving Fund program. The bonds will be paid solely from revenues to Ann Arbor’s drinking water system.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]

The step taken by the council was to create a project budget for the proceeds of bonds sold by the city on Jan. 22, 2013 – $8,666,075 total, of which $4,079,743 were taxable and $4,586,332 were non-taxable. The council created the project budget at its Feb. 19, 2013 meeting. The authorization to issue the bonds had come at the council’s Oct. 4, 2010 meeting.

The DDA is committed to covering payments on the roughly $9 million of bonds to support construction of the bottom two floors of the building – which will hold about 240 parking spaces. Of those, 95 will be available for public use. The remainder of the spaces will be used by residents of the 146-unit project, when construction is completed. Before then, the deck will be handed over to the city and the DDA after a certificate of occupancy for the parking deck is received.

As of early February, the construction was on a pace that would result in a certificate of occupancy for the parking deck by March 15. The construction of the entire building is expected to be complete by the end of the summer. [.jpg of view from First and Washington looking east]

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]

Campaign committee members include Ellie Serras (chair), Mike Allemang, (treasurer), Sally Allen, Janis Bobrin, Leah Gunn, Debbie Herbert, Norman Herbert, Pat McDonald, Paul Morel, Omari Rush, Paul Saginaw, Ingrid Sheldon and Robin Wax. The group has already launched a website, Twitter account (@OurNewLibrary) and Facebook group. According to a press release issued this week, the group intends to hold public forums, use social media, speak at community meetings and mail information to residents in support of the bond proposal.

The AADL board is holding a special meeting on Monday, July 30 to vote on the ballot language for the bond proposal. The meeting begins at 7 p.m. in the fourth-floor conference room of the downtown library at 343 S. Fifth Ave.

By deciding to build a new downtown library, the board is picking up on work it began several years ago but halted in late 2008, because of the deteriorating economy. During public commentary at the July 23 meeting, two people urged the board to consider renovation instead of rebuilding, but all board members spoke in strong support of a new building and  unanimously voted for the bond proposal.

Ellie Serras talks with Ann Arbor District Library board member Ed Surovell after the board's July 16, 2012 meeting, when trustees voted to put a 30-year, $65 million bond proposal on the Nov. 6 ballot. Serras is part of a group working to support a bond campaign. (Photos by the writer.)

The issue of renovating had emerged during public commentary near the start of the meeting, when two speakers – Lyn Davidge and David Diephuis – urged the board to support renovation of the existing building rather than a new structure.

But board members all spoke in favor of rebuilding, citing the condition of the existing building and the need for features – like a raked auditorium – that couldn’t be incorporated into a renovated structure. Several trustees pointed to the library’s role as a community gathering place, and said that the building’s current configuration can’t be modified to accommodate the growing number of events, meetings and other activities that resulted in over 600,000 visits to the downtown library last year.

Some board members also noted that a new library building could be a catalyst for other downtown changes. Ed Surovell described the area around the library as an “architectural Sahara” dominated by parking, and said the library has the opportunity to build a monument that would be a centerpiece for the city. The site at 343 S. Fifth is south of a new underground parking garage and across the street from the Ann Arbor Transportation Authority’s Blake Transit Center, which is being rebuilt.

Surovell was also the impetus behind a debate about the term of the bond. The initial resolution proposed by Nancy Kaplan – who serves with Surovell and Prue Rosenthal on a special facilities committee that recommended the bond proposal – included a 25-year term. But Surovell, founder and CEO of Edward Surovell Realtors, argued strenuously for a 30-year term. A longer term would increase the total interest payment over the life of the bond, but lower the millage rate that taxpayers would pay each year – from an estimated 0.59 mills over 25 years, to an estimated 0.56 mills for the longer period. [Details on the interest and millage rates will vary, depending on market conditions when the bonds are issued.]

Surovell’s argument eventually proved persuasive to a majority of board members, and on a 4-3 vote the bond resolution was amended to a 30-year term.

The board also set a special meeting for Monday, July 30 at 7 p.m. to approve ballot language for the bond proposal. The deadline for filing the ballot language is Aug. 14. The board also voted to amend its charge to the special facilities committee. Rosenthal, Surovell and Kaplan will continue to serve on the committee through 2012, making recommendations to the board on issues leading up to the Nov. 6 vote, as well as on next steps after the bond proposal is approved or rejected by voters.

New Downtown Library

The AADL is actually picking up work that it began several years ago, based in part on a 2007 20-year feasibility study for the downtown building. At that time the board had hired Luckenbach|Ziegelman Architects – an Ann Arbor firm that also designed the new city-owned Library Lane underground parking structure – to develop designs for a new downtown library. Skanska was hired as the construction firm for the project.

But as the economy – and the bond market – took a sharp downturn in 2008, the board suspended its effort in November of that year. But the project has remained in the background and is part of the AADL’s 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.

Late last year, the board took action to resume the process, voting in November 2011 to provide $45,000 in funding for consultants to help evaluate the downtown library’s future. The library subsequently commissioned a survey of about 400 local residents, conducted in March of 2012 by the Lansing firm EPIC-MRA. Results of that survey were presented to the board at its April 16, 2012 meeting and indicated voter support for a tax increase to pay for major renovations or reconstruction of the downtown building. [.pdf of survey results]

In June, the board held three public forums. Videos of the three June forums, as well as additional background information, are posted on AADL’s website. For Chronicle coverage of the first forum on June 9, see: “AADL Board: What’s Your Library Vision?” That article describes the history of the downtown building and previous efforts to renovate and rebuild.

New Downtown Library: Public Commentary

Library board meetings typically draw few if any members of the public, but several people attended the July 16 meeting. Three people from a group that’s working to support a bond proposal attended the meeting but did not formally address the board. Those three were former Ann Arbor mayor Ingrid Sheldon, Ellie Serras of the Main Street Business Improvement Zone, and Betsy Jackson, a consultant who helped set up the Main Street BIZ.

Two people spoke directly about the downtown library proposal. Lyn Davidge, who ran for a library trustee position in 2010 but did not win a seat, told the board that when she arrived that evening, no one had signed up to speak during public commentary. She thinks it’s time that people start attending AADL board meetings, and noted that board members have been saying that same thing, too. She noted that she has had a library card since 1945, when the library was still part of the public school system. [Her father, Emerson F. Powrie, served as deputy superintendent for the Ann Arbor Public Schools in the 1970s. At that time, the library was part of the school system, and the library director reported to Powrie.]

Lyn Davidge and David Diephuis talk after the July 16 AADL board meeting. Both spoke during public commentary, expressing support for a renovation rather than a new building.

She said she’s always voted for any library millage, and that was true for her parents before her. But in this case, she doesn’t feel that she has enough information. She’s 99.9% sure that unless something “stupendous” happens between now and Nov. 6, she’ll be voting no on funding for a new building. She said she feels more amenable to a renovation. Even then, her vote would depend on how the ballot language is worded, what the renovations would include, and how much it could cost. At this point, she’s definitely leaning toward the yes column for renovations.

David Diephuis agreed with Davidge – he’s not sure the case has been made for a new building. He noted that he attended the June public forums on the issue, but felt that $65 million is a lot for this project. Diephuis pointed out that just 21 years ago, the library had spent $10 million on an expansion project for the downtown building, which doubled its size. He read from an Ann Arbor News article describing the expansion, which stated that the building was designed for flexibility, future technology needs, and expanded collections. Now, the building is going to be scrapped, he said. How can anyone predict what the library’s needs will be in 25-50 years? Things change fast, Diephuis said, and he hoped the board would consider an extensive renovation rather than rebuilding.

A third public speaker was Alan Haber, who did not directly address the building proposal but talked about the need for the library to get involved in future plans for its “front porch” – the top of the South Fifth Avenue underground parking structure, which is owned by the city and adjacent to the AADL downtown site. He said he definitely supported more people coming to speak to the board, as Davidge had suggested.

Haber noted that supporters of a green space and community commons had held an “Imagine a Park” block party on July 14 to show how beautiful it might be. He said he knows that library officials have anxiety about a community commons, but he urged them to participate in discussions. Even though it’s not their land, it’s intimately connected to the library’s future. [It has been named the Library Lane Parking Structure, a reference to the new road between Fifth and Division, between the library and the parking structure. The parking structure is also designed so that in the future, an underground connection could be made into the library.]

Haber said many people in Ann Arbor want a green space at that location, which could include more events like the one on July 14. There were a few glitches to the event, he said, but people had a great time – kids were somersaulting on the sod that had been temporarily placed there, and it was “pretty neat.” It was nice karma on the edge of the library, and he urged board members to let it permeate their thinking. Haber noted that in New York City, the relationship between Bryant Park and the public library is beautiful. He concluded by wishing them well in their deliberations about the new building, and said he thinks the town can do something beautiful in a volunteer spirit, without putting the parking structure property on the tax roll.

New Downtown Library: Bond Term

Nancy Kaplan, a member of the special facilities committee that was recommending a new building, moved the resolution to place a $65 million, 25-year bond on the Nov. 6 ballot to replace the downtown library at its current location. Margaret Leary, the board president, asked Kaplan to explain how the committee had arrived at the 25-year term for the bond issue.

Kaplan replied that the committee wanted something that would be financially best for both the citizens and the library. She said that 25 years seemed like a financially sound compromise for those who will be paying the millage and for the library.

Leary elaborated, saying she had attended the most recent committee meeting because Ed Surovell – one of the three committee members, along with Kaplan and Prue Rosenthal – hadn’t been able to attend. Leary referred to a chart that the committee had been given with estimates for 20-year, 25-year and 29-year terms. She noted that there are variables that can’t be controlled, like interest rates and property values, which would determine how much revenue is generated from a millage. If property values increase, millage revenues increase, and vice versa.

The committee was trying to strike a balance between two things, Leary said. One is the amount that taxpayers will pay, and the desire to make those payments affordable. The other is the total interest on the debt. She likened it to a mortgage – when you have a longer-term mortgage, you’re paying more interest overall but your monthly payments are lower. The 25-year term is recommended because it diminishes the total interest that would be charged.

Kaplan said it saves the library money.

Jan Barney Newman asked for clarification. Can’t the interest rate be set at a fixed rate? Yes, Leary replied, but not at this point. The interest rate is determined at the time the bonds are sold. If voters approve the bond proposal, the library would likely put out the bonds for sale in January or February of 2013, and wouldn’t know the interest rate until that time. The rate might also depend on the method they use to sell the bonds, she said.

Based on a chart provided to the board, a 25-year, $65 million bond would have an estimated interest rate of 5% and a millage rate of 0.59 mills. A 29-year, $65 million bond had a higher estimated interest rate of 5.25%, but a lower millage rate of 0.56 mills. [The chart did not provide information for a 30-year bond.] The total interest payments would be higher under the longer-term scenario – $64.669 million in interest for the 29-year bond, compared to $51.478 million for the 25-year term. Details on the interest and millage rates will vary, depending on market conditions when the bonds are issued.

Kaplan said the estimated millage for a 25-year term seemed reasonable – at 0.59 mills, which would be lower than the previously estimated 0.69 mills used as an example during a March 2012 survey of voters.

Surovell said he thought he had convinced the committee that a 30-year term would be better, and he was “distressed and disappointed” that a 25-year term had been recommended instead. The period of 25 or 30 years exceeds the life expectancy of everyone on the board, he said. The point for any millage isn’t the total amount of interest that’s paid, but rather the amount that taxpayers must pay on their tax bills. As he pays his taxes this summer, he’ll be looking at the bill – not thinking about how many more years he’ll be paying each millage. He doesn’t care how long because he won’t be here. What’s good for the citizens is the lowest possible payment. That’s true for current taxpayers as well as for those who might not yet be born or who aren’t yet homeowners, but who’ll be paying the millage in 2037 or 2042. They don’t get a vote, but he cares how much they’ll be paying. That’s the board’s responsibility, he said.

Kaplan said the difference in millage rates was minimal – an estimated 0.59 mills for 25 years compared to 0.56 for the longer period. [A mill is equal to $1 for each $1,000 of taxable value for a property. For a hypothetical house worth $200,000, with a state equalized value and a taxable value of $100,000, each mill of tax on that property would generate $100 in revenue.] Thirty years is a very long time for a family to pay the tax, she said.

From left: Ann Arbor District Library director Josie Parker and AADL board president Margaret Leary.

Leary then requested that the board first have a discussion about why they wanted to build a new library, and return to the bond question after that.

Later in the meeting, after a discussion about the rationale for a new library (see below), Surovell moved to amend the motion, changing the bond term to 30 years. The motion was seconded by Rebecca Head.

Barbara Murphy supported the original 25-year term, saying taxpayers would be paying less overall during that period. Surovell argued that virtually no one will be paying the millage for its entire period, “certainly no one in this room,” he added. Murphy joked: “I expect to be here, Mr. Surovell.”

“I wish you all the luck in the world,” Surovell replied. But the fact is that most Americans move every 5-6 years, he said. [Surovell could speak with some authority on real estate issues, as founder and CEO of Edward Surovell Realtors.] Very few homeowners now will be here in 20-30 years. What’s more, many commercial enterprises that will eventually pay the tax haven’t even been built yet, he said, and many people who’ll be paying as homeowners haven’t even been born yet. That’s the principle behind the longer period, he said.

Kaplan said the chart that was provided to the board showed that the library would save $13 million in interest with a 25-year term, compared to a 29-year term. Surovell countered that the library wouldn’t save a penny – it’s not the library that will be saving money, he said, it’s what the citizens will be paying. For most citizens, their period of residence will be shorter than 30 years. The lower annual cost to taxpayers is the most equitable approach, he said, adding that this would be his last word on the matter.

Leary said she’d support Surovell’s amendment, for the reasons he had stated.

Outcome: On a 4-3 vote, the board amended the bond term to 30 years. Voting in favor of the 30-year term were Rebecca Head, Margaret Leary, Jan Barney Newman and Ed Surovell. Voting against it were Nancy Kaplan, Barbara Murphy and Prue Rosenthal – they wanted to keep the 25-year term.

New Downtown Library: Rationale

Prue Rosenthal, chair of the special facilities committee that recommended building a new structure, led off the discussion with highlights from a six-page memo included in the board’s meeting packet. [.pdf of memo from special facilities committee]

Ann Arbor believes that the library is vital to the community, and wants it to remain at its current location, she said. The library is relevant in providing access to a variety of services and activities – over 600,000 visits were made to the downtown location last year. The current building is well-maintained but “failing fast,” she said. Rosenthal also listed several needs that the current building doesn’t address, including: an auditorium; quiet reading rooms; access to the Ann Arbor News archives; cabling for wifi and other technology; ADA accessibility; a better-designed children’s area; and better configuration to address security concerns.

Rosenthal said the difference in cost between renovating and building new is only about 10%. And a new building would be more efficient to operate, so the library’s operating expenses wouldn’t increase. The library is authorized to collect up to 1.92 mills, but currently levies only a portion of that – 1.55 mills. That’s about $1.6 million annually that the library doesn’t collect, Rosenthal noted. Nor would they need additional staff, she said – though they wouldn’t need to cut staff, either.

Rosenthal concluded by saying that they all want a sustainable library that will make them proud. “Clearly, I feel very strongly about it,” she said.

Board president Margaret Leary asked Ed Surovell to provide some historical context, as the AADL’s longest-serving board member.

The history of the downtown building is a history of need, Surovell began. Increasingly, they have to deal with the limitations of a building that’s 58-59 years old, and that suffers from all kinds of problems – deficiencies in its mechanical systems and elevators, the projected cost of maintenance, and areas that don’t meet ADA requirements, among other things. A 1995 study commissioned by the library – known as the Smith report – indicated that the AADL system needed a new downtown facility and new three new branches, he said. The new branches have been built, but not a new downtown library.

A process to evaluate the downtown building began in earnest about six years ago, he said.

[That process included the 2007 Providence report, which provided an outlook for the downtown facility based on needs over the next 20 years. The report was a collaboration of the Providence Associates Library Planners Consultants, Holzheimer Bolek Architects LLC, Cornerstone Design Inc and O’Neal Construction Inc. Among other information, it provided four options with cost estimates. (.pdf of Providence cost estimate options) In August 2008, the construction firm Skanska prepared another report giving cost estimates to renovate or build. (.pdf of Skanska estimate)]

Surovell said the process included looking at the cost of renovating the building down to its shell, compared to rebuilding. The difference was only about 10%, or $6 million, he said. [That figure is based on Skanska's estimate – $65 million to renovate, or $71 million to build a new structure. Both estimates factored in the cost of moving to temporary locations during construction.] The board felt that for the extra $6 million, they’d be building the library of the future, Surovell said, not trying to repair the past. And there was the strong possibility that a renovation wouldn’t have gotten them what they needed or wanted, he said.

In terms of a new building, Surovell recalled that when they first started talking about the downtown library a few years ago, the context was quite different. The YMCA building was across the street, at the northwest corner of Fifth and William – now it’s a surface parking lot. The underground parking structure on the city-owned lot to the north hadn’t been built. The nearby Blake Transit Center was still years away from being re-engineered, he said. At the time, the area was an architectural wasteland, Surovell said – or at least an architectural Sahara. And that’s still the case, he added. The library is surrounded by parking.

The library has a remarkable opportunity to build a monument, Surovell said – a centerpiece for the city. When the board first decided to pursue a plan to renovate or rebuild the downtown building,  a request for proposals as issued that yielded about 13 submissions, including some from the nation’s most noted architects, he said. They received every conceivable vision about what to put on the site. And while the board still left open the possibility to renovate, nothing in their exploration indicated that renovation was the better course, he said.

In the fall of 2008, Surovell continued, a new U.S. president was elected, the stock market crashed, the bond market self-destructed, and Michigan was in the middle of a full-blown recession. More than that, he said – the state was in a desperate situation, reflecting the national economic crisis. So in late November of 2008, the board made a decision not to move forward with the project, he said.

Betsy Jackson, left, talks with AADL board member Prue Rosenthal after the board's July 16 meeting. Jackson is working with a group that supports the bond proposal for a new downtown library.

Now, the state and country are out of that crisis, Surovell said, and last year the board decided to start renewing its discussion about the downtown building. [Although the board officially took action to resume the process in November 2011 when they voted to allocate funds for consultants to help with that effort, Surovell had pushed the board to begin even earlier. That push included remarks from Surovell at a February 2010 board retreat.]

The costs are roughly what they were in 2008, Surovell said, and the board consensus still seems to be to move forward.

Nancy Kaplan then gave her perspective as the newest board member, first elected in November 2010. She said she had to read up on the history of the board’s previous work, but she arrived at the same conclusion – to pull apart the building and move out for renovations didn’t seem financially wise, nor did it give them the product they wanted, she said. Kaplan saw this as an exciting investment in the future of the library and the community. After the Nov. 6 vote, there will be additional public engagement because this will be the community’s library, as it is today, she said. The public will have a say in what’s built, she added, so that they’ll feel vested in it and proud when it’s done.

Jan Barney Newman agreed with everything that had been said – it would be wonderful to have an “architectural delight “to be the focus of the city. She noted that she had served as a representative on the library advisory committee when the library had been part of the school system. When the issue of the downtown building came up in the late 1980s and early 1990s, she said, the library staff at the time indicated that computers would be a passing fancy, and there wasn’t a concern about wiring for the downtown library. Now it’s clear how important that is, she said.

It’s an awkward building to run, Newman said. Cables are in a room running underneath pipes that are aging and that might leak. It’s too bad that there’s no design yet to show people what could be built, she added, but she feels very committed to the project for all of the reasons that had been stated, especially those related to technology needs.

Barbara Murphy wanted to add some comments about the infrastructure. What’s been said is all true, she noted, but a new library is really needed because the downtown library has become a central community gathering place, with 600,000 people visiting there each year. It’s astonishing how the staff can make do with the existing facility, she said, but they need a building that makes it easy to do things like host large events and performances. They need a place that’s welcoming, not one where people are crammed into corners.

Libraries around the world have been turned into community centers, Murphy said, and that’s happening in Ann Arbor, too. It’s not just cables and bathrooms that are needed – it’s the whole structure and function of the current building that’s wrong, and that ”has to be made right.”

Rebecca Head weighed in next, saying she agreed with everyone about the library’s needs. Like other board members, she didn’t think they could renovate to get what they needed. She said she’s a big sustainability advocate and they looked seriously at renovation, but renovation just isn’t possible. There’s no flexibility in the building and the infrastructure ”is just crummy, to use a sophisticated word,” she joked. Many of the board members would have preferred to renovate if it were possible, “but it’s not,” Head concluded. It would have been a band-aid approach, she said.

Newman spoke again, saying that at a recent public forum about the downtown building, she’d spoken with someone who worked for Quinn Evans Architects, which specializes in restoration projects. That person had told her that building new can be more sustainable in the long-run, because of improvements in building materials and equipment, like heating and cooling systems.

Rosenthal noted that the special facilities committee had talked with O’Neal Construction, which had reviewed the materials and estimates from the initial effort toward building a new facility in 2008. O’Neal had indicated that it’s easier to reuse and recycle material when you’re building new, compared to renovating, she said. Murphy added that documents from 2008 indicated that 75% of anything that’s demolished can be reused or recycled, so only 25% would go to a landfill. She found that very compelling.

Leary observed there’d been a lot of discussion of the current building’s inadequacies. She gave an example of something that can’t be fixed: The need for a raked auditorium. At one point in the past, the board had asked the architect Carl Luckenbach to evaluate where such an auditorium could be added to the current building. The answer was that it can’t be done, she said. There’s a crying need for it, Leary said, and events that need such an auditorium have to be held off-site.

She agreed with others who’d mentioned the library is a community gathering place, and that’s important. The library is a “third place,” she said – a place for people to go when they aren’t at work or home. Our culture is woefully deficient in places where people of all classes can gather, she said. We’re divided into our neighborhoods, schools or places of worship, and it’s important for our democracy to have other places where people can come together. The current building can’t do that in the same way that a new facility could, she said.

Leary then addressed the possibility of voters turning down the bond proposal. If it’s not approved, Plan B is “patch, patch, patch,” she said. The building has experienced equipment failures, like the breakdown of an elevator that was expensive to fix  – and inconvenient while it was being repaired. Each year, more of the operating budget will need to be spent in an “unpredictable, unplannable manner,” she said. And when that money is spent, the building won’t be any better. The current building also can’t be made as energy efficient as a new one, Leary said, and that energy savings would be money that could be spent directly  on services.

Construction costs are still low, Leary continued. She recognized that it’s still a tough time for many families, but waiting won’t get the library to a better position than the one they’re in now, she said.

Leary also mentioned the role that a new library could play in the reinvigoration of downtown. Surovell had mentioned that the area is an architectural wasteland, she noted, but it could be turned into a sparkling, startling example of what the downtown could be like. The building could be a catalyst for other downtown changes. If voters approve the proposal, with public engagement ”we’ll be able to create a stunning addition to the downtown,” Leary concluded.

Surovell pointed out that when the University of Michigan demolished its Frieze Building [at the corner of State and Huron, where the new North Quad is now located], you could see the ghost of the old Carnegie library building – the city’s first public library. The Carnegie building had been abandoned by the public school system when that building wasn’t even as old as the current downtown library is, he said. [The library moved to its current location at 343 S. Fifth in 1958. The original part of the building was designed by Alden B. Dow. (.pdf file of AADL building timeline)]

The current downtown library had been designed to be used partly by the public schools, Surovell noted, which at one point had considered using the facility as its headquarters. [Until 1995, the library was part of the Ann Arbor public school system.] The space on the fourth floor – including a boardroom that’s still used for meetings of the Ann Arbor Public Schools board of trustees, as well as the library board – is underutilized, he said, and can’t be utilized, because of its configuration.

Surovell concluded by stating that they need a new library, and he looked forward to an affirmative vote from the board, and an affirmative vote from the citizens in November.

Outcome: The board unanimously voted to put a 30-year, $65 million bond proposal on the Nov. 6 ballot.

New Downtown Library: Special Meeting – Ballot Language

The board was asked to vote on setting a special meeting on Monday, July 30 at 7 p.m. to approve ballot language for the bond proposal. The board’s understanding of the deadline for certifying ballot language was Aug. 14.

Ballot proposals must be 100 words or less and written as a yes/no question. The requirements are specified in the Michigan Home Rule City Act (Act 279 of 1909): The ballot language is set forth by the District Library Financing Act (Public Act 265 of 1988), which must be substantially in the following form: 

Shall the district library, formed by ________ county[ies] of ________, State of Michigan, borrow the sum of not to exceed ________ dollars ($________) and issue its general obligation unlimited tax bonds for all or a portion of that amount for the purpose of ________?
Yes [ ] No [ ]

Coming up with the wording is not easy, Margaret Leary said. The library will consult with a bond expert and legal counsel, she said. “We want the language to be absolutely right.”

Outcome: The board voted unanimously to schedule a special meeting on Monday, July 30 at 7 p.m. for the purpose of approving ballot language. The meeting will be held in the fourth floor conference room of the downtown library at 343 S. Fifth.

New Downtown Library: Special Facilities Committee

Margaret Leary presented a resolution amending the charge to the special facilities committee. The board had voted to form the committee in April of 2012. The original charge was to gather information and make a recommendation to the board about AADL’s facilities, including but not limited to a review of information that was collected in the past regarding the condition of the downtown building.

The amended charge included several additional responsibilities:

a) to continue its work of gathering information about the condition of the downtown facility; and

b) making recommendations to the Board concerning the details of implementing any bond the Board may choose to put before the voters; and

c) to recommend a process for taking the next steps should any bond proposal be approved; and

d) to recommend measures needed to maintain the existing building should a bond to replace the downtown facility fail to pass.

The committee members would serve through 2012 and remain the same three members – Prue Rosenthal (chair), Nancy Kaplan and Ed Surovell.

Leary said it’s important for the public to know “who’s doing what” related to the new building. A lot of decisions will need to be made between now and the election, and planning can be done to prepare for the next steps if the bond passes. If the bond fails, someone will need to oversee a Plan B – the “decline and fall of the current building,” she said – and to make sure it’s maintained to be as safe as possible.

Surovell said if he had written the resolution, he would have left out the “what ifs.” Typically, if a bond proposal fails, the next step is to review your options, which might mean scaling back the proposal in another attempt to get it passed. You don’t automatically go to Plan B. He said he believed the bond proposal would pass. If it doesn’t, their next steps will depend on whether it fails with only 49% of the vote, or if it fails with 80% of voters rejecting it.

Leary said she wouldn’t strongly defend her wording, but she had wanted to ensure that it’s clear how responsibility is being assigned. She noted that the board can dissolve the committee at any time, or amend its responsibilities again. ”You know how I am,” she joked. “I just like to know what’s coming next – the illusion of control.”

Outcome: The board voted unanimously to amend the charge for the special facilities committee.

Financial Report

Ken Nieman, AADL associate director of finance, HR and operations, gave a brief financial update to the board at the July 16 meeting. He noted that the report – for the period through June 30, the end of AADL’s fiscal year – were pre-audit figures. Auditors are coming in early September, he said.

Library’s cash balance stood at $7.929 million, and 99.8% of its budgeted tax receipts for the year ($11.145 million) had been received. Nieman noted that the library has received about $155,000 less in tax revenues than had been budgeted. Part of that is tax receipts that haven’t been received yet, but most of it relates to refunds given as a result of tax tribunal decisions. The state’s tax tribunal handles appeals regarding property tax assessments and other tax disputes. AADL had budgeted $75,000 for tax refunds, but the figure ended up being over $200,000, he said. Last month, he had told the board that tax refunds would be closer to $150,000 for the year.

[A similar situation occurred in the previous fiscal year. At the board's June 2011 meeting, Nieman reported that the library had budgeted to give about $50,000 in tax refunds in fiscal 2011 – refunds that AADL would need to pay primarily due to the outcome of appeals at tax tribunals, or in some cases related to property foreclosures. However, that amount ended up being significantly higher – nearly $194,000. In previous years, $50,000 had been more than enough to cover refunds. ]

AADL showed a surplus of $410,945 as of June 30, with an undesignated fund balance of $8.245 million. [.pdf of June 2012 financial report]

Director’s Report

AADL director Josie Parker reported on several awards and recognitions that the library had recently received, including an honorable mention from the American Library Association for outstanding PR efforts, related to last year’s Ben Franklin exhibit. The library also was awarded the “best story hour” by Ann Arbor Family magazine. Parker noted that if there’s one thing that never changes, it’s telling stories to children.

Parker also highlighted the recent Kids Read Comics event held at the downtown library, which drew the most people that the building has ever held at one time on a Saturday, she said. Parker added that she was pleased about the event as a library director but also as a children’s librarian. At her first job as a children’s librarian 17 years ago, she said she got into trouble because she encouraged kids to read comic books as part of the summer reading program – at the time, she had to defend that decision. “Reading is reading is reading – and we’re about that,” she said.

Parker also showed the board a gift she’d been given by someone who attended the Kids Read Comics event: Two issues of “Josie and the Pussycats.”

Present: Rebecca Head, Nancy Kaplan, Margaret Leary, Barbara Murphy, Jan Barney Newman, Prue Rosenthal, Ed Surovell. Also AADL director Josie Parker.

Next special meeting: Monday, July 30, 2012 at 7 p.m. in the library’s fourth floor meeting room, 343 S. Fifth Ave. The meeting will focus on approving ballot language for the Nov. 6 $65 million bond proposal. The board’s next regular meeting is on Aug. 20 at 7 p.m. in the same location. [Check Chronicle event listing to confirm date]

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