Also at Wednesday’s meeting, commissioners authorized the issuance of up to $405,000 in bonds for a porous pavement project on Sylvan Avenue in Ann Arbor – the Ann Arbor city council had approved a construction contract for the project at their April 19 meeting. The city is working with the county’s water resources commissioner on this effort. If successful, it could pave the way for more porous resurfacing of local roads.

In the category of the local agricultural economy, the board honored the Horning family of Manchester for their work as progressive dairy farmers – Earl Horning in turn invited the public to a June 26 “Breakfast on the Farm” event. “We’d like our city friends to come and visit us,” Horning told commissioners.

Equalization Report

At the board’s April 14 administrative briefing, when commissioners got a first look at the April 21 meeting agenda, county administrator Bob Guenzel gave them some good news: The much-anticipated equalization report would show a decrease in the equalized (assessed) value of property in the county, but the decrease would be less than forecast. That is, their budget forecast was on target – they wouldn’t have to make additional cuts in 2010 due to less-than-expected tax revenues.

Last Wednesday, Raman Patel – director of the county’s equalization department – delivered the news officially. A 7.2% drop in equalized value was not as bad as the 7.5% decrease that county officials had budgeted. The approved 2010 general fund budget projected revenues of $62.9 million – in fact, revenues will be closer to $64.67 million, Patel told commissioners. They’ll have about $1.7 million “extra to play with,” he said.

How the Equalization Process Works

The state-mandated equalization process runs throughout the year, as both the county and local assessors within each municipality examine the value of land and other property, such as buildings. Local assessors turn their findings over to the county, which then conducts independent assessments based on sales studies and physical appraisals. Next, the county’s equalization staff looks at how their findings compare with the local assessors’ findings. (The county has authority to request that local assessment rates be altered, if it considers them to be too high or too low.)

Chart showing Washtenaw County equalized and taxable values. (Links to larger image)

After this “equalization” occurs, the local municipalities send out notices to each property owner in their jurisdiction, stating each property’s assessed value as well as its taxable value. If property owners disagree, they can appeal that assessment. After appeals are ruled on, the county uses that data for its equalization report.

Taxable value is a state-mandated formula, and is the lower of two figures: (1) a parcel’s equalized (assessed) value, or (2) a capped value calculated by taking last year’s taxable value minus any losses (such as a building being torn down), multiplied by 5% or the rate of inflation (whichever is lower – this year inflation is 0.997%), plus the value of any additions or new construction.

If the property changes hands, taxable value is reset at its equalized value.

Taxable value is used when calculating taxes for the county, as well as its various municipalities and other entities that rely on taxpayer dollars, including schools, libraries and the Ann Arbor Transportation Authority, among others.

Details of the 2010 Equalization Report

On Wednesday, Patel noted that this is the county’s 52nd equalization report – he has assisted with 39 of them. [.pdf of equalization report]

This year, Patel and his staff are recommending that the county’s equalized value be set at $16.253 billion – a drop of $1.2 billion, or -7.22% from 2009. The taxable value is calculated at $14.496 billion, a drop of $815.522 million or -5.33%.

Other highlights from this year’s report:

• The assessed value of residential property – which accounts for 64.4% of all property in the county – dropped by 5.69%, while commercial property values fell 4.09%. The most staggering decline came in the industrial classification, which dropped 37.29%.
• All jurisdictions are seeing declines in taxable value. The city of Ypsilanti and Ypsilanti Township took the hardest hit, with taxable value falling 10.93% and 12.26%, respectively. The smallest drops were in Ann Arbor Township (-0.85%) and York Township (-0.08%).
• The value of taxable new construction has fallen sharply over the past five years – from $613.8 million in 2006 to $328.6 million this year.

Patel also noted that the gap between equalized and taxable values is narrowing. This is important because when equalized value and taxable value are the same for a property – and if that property’s assessed value continues to fall – then its taxable value falls in tandem with that assessed value. And that means lower revenues for local municipalities.

Equalization: Commissioner Comments

Leah Gunn said that “even though it’s bad news, it’s good news.” She recommended setting aside the additional funds, rather than spending them. Barbara Bergman agreed, saying “let’s put it in the bank.”

Mark Ouimet said the report is pretty much what he expected, and that they’ll likely see negative numbers for years to come. Responding to a question from Ouimet, Patel said the decrease in commercial property value will likely continue for several years. Ouimet described a scenario in which property owners refinance: If the appraisal for their refinancing comes in lower, then neighboring property owners will use that as a comparable to challenge their own property’s assessed value, hoping to lower their taxes, too.

Patel reported that there are currently appeals pending from last year at the Michigan Tax Tribunal on $900 million in property values – the assessed value is being challenged by the owners. Every year, he said, appeals will no doubt continue.

Ouimet speculated that residential values have likely bottomed out, but commercial properties will probably continue to decline in value. Patel agreed, but said that Washtenaw County was in better shape than others, thanks to the universities and hospitals. Ypsilanti and Ypsilanti Township were hurting because of the GM plant closure – the eastern side of the county is also influenced by what’s happening in Wayne County, he said.

Kristin Judge asked about new classification guidelines, which shifted 259 parcels in the county from the industrial to the commercial classification. The value of properties in the industrial classification plummeted 37.29%, with losses from the closing of the Pfizer site, the GM plant in Ypsilanti Township and other businesses. Judge asked whether the loss to commercial value was actually greater. Yes, Patel said – if those 259 properties had remained classified as industrial, the drop in commercial value would have been a lot worse.

Conan Smith said the lower-than-expected decline was great news, showing they had been appropriately conservative on the revenue side. But it’s only half the picture, he cautioned – they still have to accrue all of the savings they forecast on the expense side of the 2010 budget. Already they’ve learned from the county treasurer that interest income is significantly down, he said. Departments within county government were asked to forecast their expenses, “but that’s a prediction,” Smith said, and could turn out to be too optimistic.

Smith cited ongoing negotiations with townships and the sheriff’s department over the police services contract, and the shortfall they still have to deal with related to added staffing for the jail expansion, which opens this summer. There’s also the looming loss of state revenue sharing, he noted, which could wipe the extra revenue off the map, he said. He urged the board to approach this “slight windfall” with caution.

Porous Pavement for Sylvan Avenue

Commissioners voted on a resolution authorizing the issuance of up to $405,000 in bonds, backed by the county’s “full faith and credit,” for a project to install porous asphalt pavement on Sylvan Avenue in Ann Arbor. It’s part of the Allen Creek drain project, and water resources commissioner Janis Bobrin was on hand to take questions from the board.

This project was previously discussed at the Oct. 5, 2009 meeting of the Ann Arbor city council. From Chronicle coverage:

Pulled out of the consent agenda for individual consideration by the council was an expenditure for $54,271 to pay for engineering services (from Fishbeck, Thompson, Carr & Huber, Inc.) connected to the Sylvan Avenue permeable pavement project. Permeable pavement allows storm water to filter straight through the surface. The surface parking lot where the old YMCA building stood at Fifth Avenue and William is paved with permeable pavement.

Sylvan is a short one-block-long street running east-west, nestled into the upside down ”V” formed by State and Packard streets, near Yost Ice Arena. Nick Hutchinson, who’s a civil engineer with the city, fielded questions from Margie Teall (Ward 4) in whose ward Sylvan Avenue is located.

The reason Sylvan was chosen, he said, was that it had suitable soil underneath, it was flat, and there were existing drainage problems. He was asked first by Teall about maintenance, a question that was followed up with a specific question from Mayor John Hieftje about the possible need to vacuum the pavement to maintain its permeable properties. Hutchinson explained that it was more a matter of running a street sweeper an extra time per year over the street as opposed to vacuuming it. He also noted that during the winter, no sand – just salt – should be spread on the street.

The extra cost of permeable pavement, he explained, came mostly from the extra cost of the asphalt itself, not from the street reconstruction activity. So the extra cost for this project, he said, was not significant, given the 800-foot length and narrowness of the street.

The project should be finished, Hutchinson said, in spring 2010.

More recently, at its April 19 meeting, the Ann Arbor city council also approved a construction contract with ABC Paving Co. for $343,875. The project’s budget is $481,245, funded by the city’s street reconstruction millage ($159,983) and the stormwater maintenance fund ($321,442). The stormwater funding portion of the project will be repaid from the bonds secured by the office of the county’s water resources commissioner.

At Wednesday’s meeting of the county board, Jeff Irwin characterized it as a great project, and asked how these kinds of things get initiated. There’s a lot of talk around Ann Arbor about porous pavement, he said, and he wondered how this particular project got picked. He got a laugh by saying how he often sees the implementing of porous pavement by neglect – referring to potholes.

Bobrin said the Sylvan Avenue project was part the broader Allen Creek stormwater initiative, which includes work underway at West Park and Pioneer High School property. [See Chronicle coverage: "West Park Renovations Get Fast-Tracked" and "Drilling for the Drains"] The idea was to take a comprehensive approach to managing an “ultra-urban” creek, Bobrin said.

Working with the city of Ann Arbor road engineers, they chose Sylvan in part because it’s a short street, Bobrin said. The technology is new, and engineers wanted to see how well it would work. She said if it goes well – in terms of longevity and maintenance – they’d likely see more porous pavement used.

Though this project was government-initiated, Bobrin pointed to a project on Easy Street that was prompted by residents there. That road was repaved with paving cobbles, and was more expensive than porous asphalt.

Leah Gunn noted that the porous pavement on the Fifth & William parking lot was a project of the Downtown Development Authority. [Gunn is a DDA board member.] There’s a sign on the lot that explains the benefits of the material, she said, “so stop by and take a read!” Bobrin said it was amazing to see it on a rainy day, as the water drains through the pavement. It also makes the lot less icy in the winter, because there’s no standing water.

Wes Prater wondered about the soil under the pavement – if it’s not designed well, in the winter the water might get trapped and frozen just beneath the pavement, he said. Bobrin agreed that the design is crucial. They’ll have a sand under-drainage base so the water won’t get trapped, and additional water quality treatment beneath that. [According to a cover memo accompanying the resolution, the base will include an underlying sand filter and swirl concentrator to remove oils, sediment and phosphorus from runoff in the road.]

Prater also said he’d heard that this technique reduces road noise – was that true? Bobrin thought so, but said she wasn’t sure, since that’s not an aspect of the project that she’s examined. [Reduction in road noise was a benefit of porous pavement touted by a resident during public commentary at the Ann Arbor city council's April 19, 2010 meeting.]

Outcome: Approval of the bonding authority passed unanimously.

Drug Discount Program

Commissioner Jessica Ping proposed a resolution authorizing the county to enter into a contract with CVS/Caremark for their drug discount program, which would be made available to residents. This program has been discussed for several months and has been a contentious issue for some commissioners.

From Chronicle coverage of the board’s Sept. 2, 2009 meeting:

In July, three commissioners – Kristin Judge, Jessica Ping and Wes Prater – attended a conference of the National Association of Counties (NACo) in Nashville. While there, they learned of a drug discount program offered by CVS/Caremark, and they asked a representative of that business to make a presentation about the program to the full board.

At Wednesday’s meeting, Steve Rohm from CVS/Caremark told commissioners that 1,250 counties nationwide participate in the drug discount program. If Washtenaw County participates, cards would be offered to any resident not covered by insurance – there’s no enrollment, fee or registration required, no age limitations or limits on usage. Residents would take the card to participating pharmacies to get some type of discount on their prescription drugs. The discounts would be set by each pharmacy – Rohm said that consumers typically get around a 22% savings. Pet prescriptions are also covered, he said.

Responding to a query from commissioner Jeff Irwin, Rohm said that for each prescription filled using the discount card, CVS/Caremark receives a small transaction fee that’s been pre-negotiated with the pharmacies. He said he did not know the amount of that fee.

Kristin Judge said that she had checked with Ellen Rabinowitz, executive director of the Washtenaw Health Plan, to see if the discount drug card would in any way negatively impact the county’s current plan, and found that it would simply give residents another option. She said that at the NACo conference, she asked commissioners from other counties that were already participating in the plan whether there was a downside to the program – they all told her it was a great benefit. There’s a new kind of person who needs help, Judge said – people who have worked all their lives and never relied on government aid, but who now find themselves out of a job. They’re still reluctant to ask for help, so this discount card, which doesn’t require registration, would be perfect for them, she said.

Commissioner Jessica Ping said that the city of Saline is already participating in the program, through its membership in the National League of Cities. She said her sister, Alicia Ping, who’s a member of the Saline city council, would be willing to answer any questions they might have about the program.

Judge said she’d be supporting the county’s participation in the drug discount program. She also indicated that NACo would be offering similar programs for dental and vision coverage in the future.

On Wednesday, Ping said the program would be a great asset to the community, and urged commissioners to support it.

Leah Gunn began the discussion by reading a statement that outlined her objections to the plan. [.pdf file of Gunn's statement] She cited concerns over reports of deceptive business practices and violations of HIPPA (the Health Insurance Portability and Accountability Act). Gunn said she hasn’t seen a copy of the contract, and based on news reports that she’s read, she doesn’t want the name of Washtenaw County associated with the program in any way.

Barbara Bergman, who’s been a vocal critic of the plan, also read a prepared statement, laying out many of the same concerns. [.pdf file of Bergman's statement] She asked for an update from Curtis Hedger, the county’s corporation counsel, on questions she’d asked him to pursue with NACo and Oakland County, which already offers the drug discount program.

Hedger said he’d spoken with Oakland County’s legal counsel, who’d told him they thought CVS/Caremark was a good company and they’d made no changes to the contract used by NACo. Hedger was unable to reach anyone at NACo, but said his research showed the organization had started it as a pilot program in 2004. At that time, NACo had issued a request for proposals (RFP), and ultimately awarded the bid to Caremark. The program was offered initially to 17 counties, then offered to all NACo members in 2005. Caremark was acquired by CVS in 2007.

Wes Prater said he’d heard a lot of rhetoric, but hadn’t seen one iota of information from other commissioners that had anything to do directly with the drug discount program. The savings for residents were considerable, he noted, and many counties nationwide already offer it. The county wasn’t going to incur any cost, he added, saying “Come on, folks – let’s be reasonable.” It was important to offer help to low-income residents without health insurance, he said.

Rolland Sizemore Jr. asked a series of questions, eliciting the fact that there was no limit on the number of residents who could use the card, that most large drugstores and many independents accept it, and that the county would be able to terminate the contract. Hedger said that they can terminate it by giving 60 days notice before the end of the contract’s term, at the end of May. An initial one-year contract would be automatically renewed for one-year increments, unless the board took action to terminate.

Hedger also explained that the county wouldn’t be charged for a “basic” marketing plan provided by CVS/Caremark, but there would be a cost if the county chose to customize its marketing. It wasn’t clear exactly what kind of customization was offered, or what the cost would be.

Ping said nothing that had been presented was sufficient to prevent the board from moving forward to offer this plan. It won’t cost the county, she said, and if they don’t like it, they can pull it. One of the reasons that the county is a member of NACo is because of programs like this, she said, and they should take advantage of it.

Kristin Judge said for her, it was about the residents: “I’m going to do anything I can to help the residents of Washtenaw County.” Commissioners she’d talked with in other counties that already offered the program described it as a “no brainer” and wondered why Washtenaw County hadn’t done it sooner. If the board approves it, Judge said she’d personally deliver cards to schools, libraries, doctors’ offices, homeowner associations and other venues to make sure residents had access to the program. She said she appreciated the concerns of other commissioners, but that she had spent considerable time researching the program and felt it was worth offering.

Jeff Irwin had some lingering questions. He wondered whether CVS/Caremark could collect personal information from a customer’s prescription, when they used the discount card to fill it. Hedger said he’d talked with the CVS/Caremark attorney, who told him that information was collected in aggregate – that is, none of the individual prescription information is given to CVS/Caremark. Reports from pharmacists indicate how many prescriptions of a certain type are filled, for example, but not the names of customers.

Irwin said he wasn’t sure he was comfortable signing off on a program that collected even aggregate information, given the company’s track record of mishandling personal information. He wasn’t sure the discounts outweighed that concern. He also didn’t like the fact that CVS/Caremark required exclusivity, aside from grandfathering in the county’s existing health plan. He said he wasn’t thrilled with the termination clause either, but the exclusivity arrangement was more onerous. What if another program came along that offered an even better deal?

Irwin offered an amendment that would allow the county to offer other plans in the future, if they wanted.

Hedger clarified that the exclusivity applied only to programs that the county might offer, not to other discount programs like those offered by the Ann Arbor Area Chamber of Commerce.

Prater said Irwin’s amendment seemed designed just to draw out the process. According to the county’s health department, he said, an estimated 11% of the local population doesn’t have health insurance. That equates to about 33,000 people who need relief, and he urged his colleagues to support the program.

He moved to call the question on the motion to amend – a parliamentary move that requires eight votes. The motion to call the question failed, gaining support only from Prater, Judge, Ping, Ouimet and Sizemore.

Irwin returned to the question of exclusivity, saying he thought it was “weird” that the CVS/Caremark representative, Steve Rohm, had told the board that the company would require exclusivity, but wouldn’t enforce it. He felt it indicated a willingness on the part of CVS/Caremark to soften its demands. It’s not in the county’s interest to agree to exclusivity – it’s only in the interest of CVS/Caremark, Irwin said. If they can get a better deal out of the company, they should try.

Citing the bad economy, Sizemore said he wanted to get the program started.

Judge said she’s spent many hours researching the program, and couldn’t imagine that within another year – the term of the contract – a better program will come along. “It’s only one year for a contract that cost the county zero dollars,” she said. The energy spent on opposing the CVS/Caremark program could have been spent finding a better one, Judge added, but that didn’t happen.

Judge also pointed out that the county surely has other exclusive arrangements with businesses – like Verizon, for the county’s cell phones. Bergman responded, saying she assumed that contracts with companies like Verizon went through an RFP process, with competitive bids. That was not the case with CVS/Caremark, she said.

Bergman also thanked Judge for the time she put into researching this program, but noted that it was Judge’s choice to do so. Bergman took offense at the suggestion that other commissioners didn’t work as hard, saying that was disingenuous.

Outcome: The amendment to change the contract language failed, supported only by Barbara Bergman, Leah Gunn, Jeff Irwin, Ronnie Peterson and Conan Smith.

Speaking to the main motion – authorizing the contract with CVS/Caremark – Smith said he’d vote against it. He was uncomfortable with the company’s business practices, and didn’t want to support something that had caused such consternation among commissioners. He was concerned that the business didn’t disclose its profit model, that a disproportionate amount of funds go toward CEO compensation, and that some of the county’s professional staff have expressed discomfort with the deal. He didn’t like the exclusivity requirement, and he didn’t like ceding the county’s authority to NACo in selecting the company.

More importantly, Smith said, was that there are times when the benefit to the individual is outweighed by the harm to the community – WalMart is an example of that, he said. And with the federal health care reform that’s recently passed, there may be relief on the way. All of these factors “suggest to me that we should let this one go.”

Prater said he took issue with the fact that so many county residents are being ignored – some are going without their next meal, and commissioners really should have more compassion for them.

Bergman allowed that perhaps the county should be more aggressive in marketing its own drug discount plan. She said a better strategy would be for CVS/Caremark to simply slash its prices across the board. The drug discount program is a way to get people into their store, where they’ll buy other things, she said.

Outcome: The resolution authorizing approval of the CVS/Caremark contract for a Washtenaw County drug discount program passed, with dissent from Barbara Bergman, Leah Gunn, and Conan Smith. Commissioners will take a final vote on the resolution at the May 5 board meeting.

Drug Discounts: Public Commentary

Eric Sturgis told commissioners that he previously lived in Oakland County and had taken advantage of the CVS/Caremark program, which had saved him about 20% off prescriptions. He understood the concerns that had been raised, but felt that those concerns should be weighed against what’s best for the individual. If a better program comes up, they should pursue it. As Democrats, he said, anytime they can help people, they should do it. He said he was glad to see that the Republicans were on board this one time. [Commissioners Ping and Ouimet are the only Republican commissioners.] He said he knew all commissioners worked hard.

Audrey Tisdale, who works for the county, said that Washtenaw United Way offered a drug discount program – called FamilyWize – that doesn’t require signing a contract. She urged the county to look into that as an alternative.

Drug Discounts: Commissioners Followup

Judge said she never stated that other commissioners didn’t work hard – she knew that they did.

Irwin responded to the comment about pursuing a better program if it came along. There already is a better program, he said – the county’s own prescription plan, which offers deeper discounts. The only difference is that you have to sign up for it, and it doesn’t cover pet medications. Other than that, it all comes down to marketing, he said. If the county eventually decides to put money into marketing a drug discount plan, he hoped the county would spend it on the plan that saves more money.

Bergman noted that there was someone who typically spoke during public commentary time who had not been there for several weeks. She said she wished him well, for whatever reason he was absent, adding, “I frankly look forward to seeing him again.” [She was referring to Thomas Partridge, who is a regular speaker during the public commentary time at meetings of the county board, Ann Arbor city council, AATA and other public entities.]

Smith jokingly told Sturgis that the Republican caucus was planning to hold a puppy killing later that night to make up for their support of the drug discount program.

Road Commission Expansion

Conan Smith moved a resolution setting a public hearing on May 19 on expanding the Washtenaw County Road Commission from three members to five. He told his colleagues that it wasn’t a decision on whether to expand – setting the public hearing was just a way to start the conversation. [The county board is responsible for appointing the road commissioners to six-year terms. Currently serving are David Rutledge, Douglas Fuller and Fred Veigel.]

Commissioners Leah Gunn, Barbara Bergman and Jeff Irwin all supported the resolution, saying they were also in favor of expanding the road commission.

Wes Prater, who has previously served as a road commissioner, said he opposed the resolution. It would add to the cost of the commission, he said, with no increase in revenues. In fact, roads are deteriorating because the commission is operating at revenue levels that are as low as they were in 2001, he said. State legislators need to find a way to adequately provide funding for roads – he noted that five local communities are now paying for road repair on their own, either by levying new taxes or taking money from the general fund.

The road commission still had issues, he said, but relationships between management and the unions have improved, and things are on the right track. He noted that the road commission expects to be certified soon to ISO 9000 and ISO 9001 standards – the first road commission in the state to do that. Overall, the commission is doing good work, Prater said.

Kristin Judge weighed in, saying she thought the road commission should eventually be expanded to five members, including representation from the western part of the county and Pittsfield Township. However, she was concerned about the timing. She wanted more discussion about how they’d handle the cost of additional salaries, for example. Judge described herself as being a strong critic of the road commission before she was elected, but since then she’d seen the entity be more responsive to her constituents’ concerns, and she appreciated that.

Jessica Ping echoed Judge’s comments, and said she didn’t think the timing was right. She also praised the road commission’s responsiveness to issues raised in her district.

Saying he wasn’t opposed to expansion in principle, Ken Schwartz said he thought that setting a public hearing was putting the cart before the horse. He moved to table the motion until the board’s May 19 meeting.

Outcome: The motion to set a May 19 public hearing on possible expansion of the road commission was tabled, with dissent from Bergman, Irwin, Ouimet and Smith.

Road Commission: Public Commentary, Commissioner Response

Eric Sturgis spoke briefly, thanking Smith for proposing the public hearing and saying he didn’t see anything wrong with that.

Responding to his comment, Judge said they should have the public hearing after they get more information on the proposed change.

Smith noted that state law requires that they hold a public hearing first – the intent is to get information and gauge interest from the public before setting policy. It’s a lengthy process from hearing to appointment, he said.

At this point, Prater charged that Smith was speaking out of order. Smith said he was responding to a citizen who spoke on the issue during public commentary, which is allowed. He continued by saying that if they want to engage in this process and not defer to the next board, they needed to start the process. [There will be at least some turnover on the board this year – commissioners Mark Ouimet and Jeff Irwin are not running for re-election, and are vying instead for seats in the state House of Representatives.]

Misc. Reports, Presentations, Public Hearing

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Dairy Farmers of the Year

The Horning family of Manchester were honored for their work as “progressive dairy producers.” They were recently named Michigan State University Dairy Farmer of the Year. Their six-generation family dairy business, which started in 1877, now has 360 milk cows, 410 head of young stock and 700 acres of cropland.

Earl and Diane Horning were on hand to accept the board’s resolution of appreciation – it was read by Jessica Ping, who represents District 3, which includes Manchester in southwest Washtenaw County. Earl Horning said it was a humbling experience to work with the state’s dairy farmers. He noted that they had been featured in a Kroger commercial, and that the grocery chain was a very friendly company. The Hornings also invited commissioners to attend a June 26 Breakfast on the Farm event they’ll be hosting, which shows people how the farm operates. “We’d like our city friends to come and visit us,” Horning said. The farm is located at 11855 E. Pleasant Lake Rd. in Manchester.

Following the presentation, Conan Smith remarked that he had grown up next to a farm, and that his first jobs were baling hay and milking cows. He suggested that all commissioners should be made to do farm work.

Area Agency on Aging

Barbara Bergman passed out brochures from the Area Agency on Aging 1-B, with information about support services that would help people live on their own, rather than in a nursing home.

Head Start Imagination Library

Kristin Judge invited commissioners and the public to the April 30 kick-off of the county’s Head Start Imagination Library, from 10:30 a.m. until noon. Kids up to five years old who are enrolled in the program receive a free book in the mail each month. Initially, the program will serve children in the Ypsilanti area (within the 48197 and 48198 zip codes). They need to raise another $493,000 to serve the rest of the county, Judge said. She also noted that during the festivities, she’ll be reading aloud from the book, “The Little Engine That Could.” The event will be held at the Washtenaw County Head Start building, located at 1661 Leforge in Ypsilanti.

Aerotropolis

Bob Guenzel reported that the Detroit Region Aerotropolis is up and running – the entity aims to develop the area surrounding Detroit Metro and Willow Run airports in Washtenaw and Wayne counties. Nine governments – including Washtenaw County, Ypsilanti and Ypsilanti Township – have joined, Guenzel said, and they’ve received inquiries from several other communities who might be interested in joining, which he said is positive. He noted that he currently serves as the county’s representative on the entity’s board, and that commissioners will have to appoint a replacement, hopefully at their May 5 meeting. [Guenzel is retiring in mid-May as county administrator.]

Tony VanDerworp serves as staff support for the county’s aerotropolis work, and gave a quick update. The group is working on revisions to its master development plan to include the element of transit, he said. They’ve also issued a request for proposals (RFP) for marketing. They’re hoping that the state legislature passes the Next Michigan Development Act, which would allow the aerotropolis and similar entities to offer tax abatements and set up tax increment financing (TIF) districts. Another committee is working specifically on marketing of the Willow Run Airport.

Rolland Sizemore Jr., the board’s chair, said that he and Verna McDaniel – who’ll be replacing Guenzel – will bring a resolution on a new appointment for the next board meeting.

Ronnie Peterson asked whether the aerotropolis bylaws prevented Guenzel from remaining as the county’s representative – he was told they don’t. In that case, Peterson said, he’d be urging Guenzel to stay on that board. Guenzel knows the history of that effort and has a lot of respect from the other partners involved, he added.

Treasurer Reports

Wes Prater said he’s like to receive monthly reports from the county treasurer, Catherine McClary. The board hadn’t seen a report from the treasurer in quite some time, he said.

Public Hearing on Urban County Annual Plan

The board held a public hearing on the Washtenaw Urban County‘s annual plan for 2010-11, which must be submitted to the U.S. Dept. of Housing and Urban Development (HUD). [See Chronicle coverage: "Urban County Allocates Housing Funds"]

No one spoke at the hearing. [.pdf of Urban County 2010-11 annual plan]

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

Next board meeting: The next regular meeting is Wednesday, May 5, 2010 at 6:30 p.m. at the County Administration Building, 220 N. Main St. The Ways & Means Committee meets first, followed immediately by the regular board meeting. [confirm date] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public comment sessions are held at the beginning and end of each meeting.

The briefing, which previewed items on the March 3 board agenda, drew more than just commissioners and administrative staff. In addition to The Chronicle, two others attended Wednesday’s meeting: A candidate for the 11th District county board seat, currently held by Jeff Irwin; and the county treasurer, Catherine McClary.

McClary was there to answer questions related to two resolutions she had proposed – only one of them made it onto the March 3 agenda. In discussing the resolution that will be considered on Wednesday, McClary noted that delinquent taxes are on the rise, expected to reach around $40 million this year – more than double the amount just five years ago.

Refugee Health Program

Commissioners voiced several concerns over a new refugee health program, funded with $7,800 from the state Dept. of Community Health’s Office of Refugee Services. The program would pay for health screenings at the county health department’s clinic at 555 Towner St. in Ypsilanti.

In briefing the commissioners, Joanna Bidlack of the county administrator’s office reported that about 50-100 refugees settle in Washtenaw County each year, primarily in the Ypsilanti area. Currently they get health screenings from a clinic in Dearborn. The county was approached about this program by the state and the Jewish Family Services nonprofit, which serves as a refugee resettlement agency.

According to a cover memo on the resolution, the proposed medical screenings are designed to identify people with communicable diseases, or whose health conditions may impact resettlement – by affecting their ability to get a job or attend school, for example. The screenings would also identify conditions that might be grounds for exclusion (affecting their refugee status) or that would be significant enough to alert authorities at the relevant consulate.

The county health department currently provides some services to refugees – including tuberculosis screening and immunizations – without reimbursement.

In discussing the program, Wes Prater asked if these refugees are illegal immigrants. “I think we need to know if they’re illegals,” he said. Ken Schwartz said the status of “refugee” was a legal designation. His concern was whether they’d be bringing communicable diseases into the county.

Barbara Bergman raised another issue – if the screenings turned up a medical condition that needed treatment, then what? Who would pay for treatment?

Bidlack said she’d follow up, prior to their March 3 meeting, on the issues raised by commissioners.

Funding for Low-Income Families

A nearly $600,000 federal grant that requires $240,000 in county matching funds stirred discussion at Wednesday’s briefing. The board will be voting on a resolution to accept the funding at their March 3 meeting.

This community services block grant, administered by the county’s Employment Training & Community Services (ETCS) department, will help pay for a range of services for low-income families, including food assistance, job training and emergency emergency services.

The funds must be used for families at or below the 125% of the poverty level – for a family of four, they’d need to be making $27,000 or less to qualify, Joanna Bidlack told commissioners. Usually, eligibility is in the 200% or lower range.

“That’s an awfully mean grant,” Barbara Bergman said. Her objection was that the funding was too restrictive, and that perhaps the county’s share could be better used to serve a broader range of residents.

Wes Prater pointed out that the program is designed to help extremely low-income residents. “Other programs do exactly what you say, Barbara,” he added.

For Leah Gunn, the benefit was the matching funds. The county is leveraging its $240,000 into a total of $840,000, she said, and she’d hate to lose that additional funding.

Bergman conceded those points. “I’m really angry at miserly programs like this,” she said. “But half of something is better than all of nothing.”

Borrowing for Delinquent Taxes

Washtenaw County treasurer Catherine McClary attended Wednesday’s briefing – a resolution she’d proposed had been added to the board’s March 3 agenda. But commissioners decided not to add a second agenda item she had put forward.

The resolution that’s on the March 3 agenda permits the treasurer to borrow against the amount of delinquent property taxes in all 80 taxing jurisdictions throughout the county, including cities, townships, schools systems and libraries, among others. After March 1, these jurisdictions turn their delinquent taxes over to the county, and are reimbursed for that amount. The county treasurer then assumes responsibility for collecting these delinquent taxes.

In a cover memo to the board, McClary wrote that delinquent taxes have been increasing. Five years ago, the delinquent amount was $20 million – last year, that grew to $36 million. McClary expects it could reach as high as $40 million this year, and plans to borrow $50 million to hedge her bets. From the memo:

This bond issue is needed more urgently this year than in the past 13 years that I have served as County Treasurer. For the first time last year, we were not able to self fund our delinquent taxes. This year the County is facing cash flow issues more acute than in the past. The County ended 2009 with approximately $29 million dollars in cash in the General Fund of which $24 million represented a transfer in from the Revenue Sharing Reserve Fund. We will need the borrowed funds to operate the first half of this fiscal year.

This is a standard process, and commissioners treated it as such.

But they were not enthusiastic about a second resolution that McClary had put forward – one that corporation counsel Curtis Hedger did not add to the draft agenda for the March 3 meeting. Hedger told commissioners that McClary was requesting that the board appoint the treasurer as a special agent, which would give her certain powers. One of the powers it would give the treasurer is the ability to supplement her salary by up to 20%.

McClary objected to Hedger’s description, saying that the salary supplement isn’t in the resolution she proposed and that she’s made it clear in writing that she wouldn’t be increasing her salary. Hedger noted that the authority rests with the state statute that outlines the authorities of a special agent, not with the resolution granting her that status.

Hedger said the agency resolution is a regular request and that in the 16 years he’s been on the job, the board has never put it on the agenda. Commissioner Leah Gunn said that when it was discussed at a previous briefing, there’d been unanimous consent not to consider it.

Commissioner Jeff Irwin asked McClary what the advantage would be to passing the resolution. It would give the county’s budget office more flexibility, McClary said, to fund the treasurer’s office from the county’s general fund or from the delinquent tax fund.

Commissioners agreed not to put the special agent resolution on the agenda.

Bond Refunding in Sylvan Township

The board is being asked to approve a bond refunding for Sylvan Township, which would restructure the debt, lower the township’s bond payments and save an estimated $485,000 over the life of the bonds.

In 2001, the county issued $12.5 million in bonds for Sylvan Township, which has a contractual agreement with the county to make the bond payments. The township, located west of Chelsea, used the funds to build a water and wastewater treatment plant, intending to serve future development. The plan was to use revenue related to that development – from connection fees to the system – to cover the bond payments. Since then, however, the economy has soured and development hasn’t materialized.

The township hopes to take advantage of interest rates that are lower than they were at the time the bond was issued. In outlining the resolution, Joanna Bidlack of the county administrator’s office noted that timing is important, because a bond payment is coming due soon.

Some commissioners were concerned about whether the county would “get stuck with the bill.” Curtis Hedger, the county’s corporation counsel, said the county was the guarantor and would be required to pay, but they had several options. One of those would include going to court and getting a judgment levy – allowing the county to levy a court-ordered tax on residents to cover the bond payments. Such a tax would be exempt from Headlee rollbacks, he added.

Commissioner Wes Prater noted that this wasn’t the first time they’ve had an issue with Sylvan Township. Ken Schwartz recalled that a developer failed to pay a special assessment a few years ago, which caused problems for the township.

If the board does nothing, Hedger said, the situation will become much more difficult. Another factor: The township is hoping to sell the water and wastewater system, he said. Later, it was clarified that neighboring Chelsea might be the buyer.

Hedger also clarified that the current bond ended in 2023. In the refunding, the county would be putting out a new 20-year bond issuance of $10.4 million, starting this year.

Schwartz reported that the county’s board of public works, on which he serves, had held a special meeting on Monday – this kind of financing is “just one of the things the county does,” he said. Hopefully in four or five years, he added, the situation will right itself.

Internal Financial Controls

A resolution by Wes Prater to form a committee that would review the county’s internal financial controls was on the March 3 draft agenda. Prater had initially brought up the topic at the board’s Feb. 17, 2010 meeting, but it was tabled by commissioners.

At Wednesday’s briefing, Prater said he wanted to remove the resolution from the March 3 agenda and push it back until the county’s auditors had a chance to make a presentation to the board. County administrator Bob Guenzel had previously suggested scheduling a working session to bring in Mark Kettner of Rehmann Robson and county accounting manager Peter Collinson, to review with commissioners the existing internal controls.

Request for Proposals, Drug Discount Plan

Commissioner Jessica Ping brought up two items for consideration that weren’t on the March 3 agenda.

RFP on Spending Patterns

First, she suggested that the county issue a request for proposals (RFP), soliciting bids from vendors who analyze spending patterns and identify ways for the county to cut purchasing costs. At the board’s Nov. 19, 2009 working session, which Ping chairs, commissioners had heard a presentation about this kind of service from Fred Manuel of Alliance Cost Containment.

Barbara Bergman said she didn’t think the board had decided whether they needed this service. Ping said it was just an RFP, not a decision to proceed. Ping also noted the way the business model works doesn’t have a downside for the county. Alliance Cost Containment, for example, takes a percentage of whatever savings it identifies and implements. “It doesn’t cost us anything,” Ping said. “Why wouldn’t we do that?”

Wes Prater supported the RFP, saying that with this economy, they need to be looking at ways of doing business less expensively, “and this is one of them.”

The consensus was to direct staff to develop an RFP. Issuing an RFP does not require board approval.

CVS/Caremark Drug Discount Program

Ping also wanted to move forward on considering a drug discount program offered by CVS/Caremark. Commissioners discussed the program at their Sept. 2, 2009 board meeting. From Chronicle coverage:

Steve Rohm from CVS/Caremark told commissioners that 1,250 counties nationwide participate in the drug discount program. If Washtenaw County participates, cards would be offered to any resident not covered by insurance – there’s no enrollment, fee or registration required, no age limitations or limits on usage. Residents would take the card to participating pharmacies to get some type of discount on their prescription drugs. The discounts would be set by each pharmacy – Rohm said that consumers typically get around a 22% savings. Pet prescriptions are also covered, he said.

At Wednesday’s briefing, Ping said she knows several people who are out of work, who could use the help but who wouldn’t sign up for a county program because of pride. The CVS/Caremark plan is structured in a way that would be more likely for them to participate, she said.

Ping also noted that because the plan is offered to members of the National Association of Counties – Washtenaw County is a member – “we’re already paying for this.”

Kristin Judge, who was taking part in the briefing by phone, said the savings for county residents would be considerable. “I think it would be wrong of us not to do this,” she said. Ping added that the city of Saline is already participating in the program, and that residents have saved over $50,000 in the last six months.

Leah Gunn asked if it would be limited to CVS, or whether participants could use the plan to get discounts at other pharmacies. Ping clarified that many pharmacies offer discounts through the plan, including independents like Wenk’s.

Barbara Bergman objected to the program. She said it gave an unfair advantage to CVS, since that pharmacy’s name would be displayed on the cards given to participants. Ping said that it wouldn’t be prominent on the cards.

Bergman said it made more sense if pharmacies would just lower their prices in the first place. Ping pointed out that this was a larger issue over which the board had no control.

Curtis Hedger, attorney for the county, reported that CVS/Caremark agreed to grandfather in existing drug discount plans like the one offered by the Washtenaw Health Plan. [The WHP, designed for low-income residents, has reached capacity and is not accepting new participants.]

Other than that, the contract with CVS/Caremark stipulates that the county can’t use competing plans – that was a concern to some commissioners. Jeff Irwin suggested eliminating that item in the contract. He recalled that at the CVS/Caremark presentation in September, Rohm had indicated they wouldn’t enforce that part of the contract. Gunn noted that as long as it was written into the contract, CVS/Caremark could enforce it, if they wanted to.

Hedger wasn’t sure CVS/Caremark would agree to that change. He said he hadn’t reviewed the contract or talked to their representative since October, and that he needed to review it again. Commissioners agreed to put the item on the March 17 meeting agenda for further consideration.

Public Commentary

The bi-weekly briefings of the county board of commissioners, though informal, must conform to the requirements of Open Meetings Act. That means that a representative from the county clerk’s office – deputy clerk Jason Brooks – attends and takes minutes. There’s also opportunity for public commentary, though typically no one from the public attends.

On Wednesday, however, when Joanna Bidlack asked if anyone wanted to speak during public commentary, all eyes turned to Alice Ralph. Ralph noted the attention, but demurred – she said she’s running for the board’s 11th District seat, and was just there to observe. The 11th District is currently represented by Jeff Irwin, who is running for state representative this year.