The abbreviated discussion was the result of the fact that a motion to table – as contrasted to a motion to postpone to a date certain – is not debatable. So once the motion was made, the council immediately voted. The motion to table was made by Eaton, who said it could be taken up off the table at a future meeting when SPARK’s job retention, attraction and creation numbers could be reconciled.

Paul Krutko, CEO of Ann Arbor SPARK, stayed at the meeting until the rest of the council’s business was finished, which was around midnight. He was then invited to the podium to answer questions, and the ensuing debated by councilmembers lasted about 30 minutes. They did not reconsider their earlier vote to table the funding, however.

At its May 19, 2014 meeting, the council spent roughly five hours of deliberations on amendments to the FY 2015 budget, and just under 30% of that time was spent on two amendments involving SPARK – neither of which were approved by the council.

Ann Arbor city council budget deliberations FY 2015: 4 hours 45 minutes by amendment topic.

SPARK is also the entity with which the local development finance authority (LDFA) contracts for business accelerator services. One of the proposed amendments to the FY 2015 budget would have decreased the amount of funding to SPARK from the LDFA, resulting in an increase to the amount the LDFA would have reserved for future infrastructure projects. The second budget amendment debated on May 19 would have eliminated $75,000 in the FY 2015 budget for the contract that the council was asked to approve on June 16.

Ann Arbor SPARK also receives money from other governmental units in Washtenaw County. In 2013, the $75,000 paid by the city of Ann Arbor to SPARK accounted for more than half of the $132,888 total contributed by all governmental units besides Washtenaw County. The county levies a tax under Act 88, and out of that levy, last year the county contributed $200,000, according to the information provided to the city by SPARK. [.pdf of 2013 "return on investment" from Ann Arbor SPARK] [.pdf of 2013 Ann Arbor SPARK projects] [Ann Arbor SPARK 2013 annual report] [21st Century Jobs Trust Fund 2013 Annual Report]

During public commentary on June 16, three people spoke about the SPARK contract. Kai Petainen read a statement about apparent discrepancies in two reports that provide jobs figures. [Petainen public comment] [Ann Arbor SPARK 2013 annual report] and [21st Century Jobs Trust Fund 2013 Annual Report] Jeff Hayner said that SPARK has misrepresented its results, and he suggested revising the resolution to reduce the $75,000 to just 10% of that figure. And Dave DeVarti, a former councilmember, asked the council to deny or table the funding. He pointed out that $75,000 could go a long way for a human services agency. He asked that the council hold Ann Arbor SPARK to the same kind of standards as it does the human services agencies it has contracts with.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.

The meeting and the letter came after SPARK had declined several previous requests for its financial statements – from rank-and-file residents, journalists as well as elected officials. SPARK’s previous decision not to release past statements became moot when Ann Arbor resident Kai Petainen received the past records on request from the state of Michigan Attorney General’s office.

Ann Arbor SPARK contracts with the city’s local development finance authority – an entity that’s funded through tax increment financing (TIF) – to operate a business accelerator. SPARK also receives grants from several public bodies, including the city of Ann Arbor and Washtenaw County. [.pdf of SPARK's 2006-10 audited statements]

Based on Krutko’s letter, it now appears that SPARK will itself be providing past as well as future financial statements on its own website.

Krutko’s letter was included in a message that Rabhi sent to an online group – called “aa better local politix” – with a positive update on what he described as his efforts to increase SPARK’s financial transparency. Rabhi described the Nov. 25 SPARK board meeting as tense, but was positive about the nature of the board’s conversation and the outcome. From Rabhi’s message:

By the end of the meeting, staff were empowered by the board to develop a comprehensive recommendation on how to move forward and to begin with initial implementation. In my perception, staff actually seemed energized by the way in which I framed up the issue and the ensuing discussion at the board table.

Krutko’s letter to Rabhi and Powers cites specific steps that SPARK will now be taking:

• We have posted our most recent financials on our website.
• We are developing a “Frequently Asked Questions About SPARK” summary to be posted on our website.
• We are preparing to post our 2013 Financial Statements upon completion by our Auditors in Spring 2014.
• We are requesting your help in being placed on an upcoming Board of Commissioners and City Council agenda at that time to answer any questions in these public forums about our financial statements.
• We will develop a Use of Funds Quarterly Report to elected officials, on activities supported by public funding provided to SPARK.
• As we have done in the past, we will continue to respond to specific questions from elected officials at any time.

[.pdf of Dec. 4, 2013 letter from Ann Arbor SPARK's Paul Krutko] [.pdf of Dec. 4, 2013 message from Yousef Rabhi]

Janis Bobrin, Washtenaw County’s water resources commissioner, attended the Oct. 3, 2012 county board meeting to present environmental excellence awards. She received a standing ovation from commissioners. She is not running for re-election, and will leave office later this year after more than two decades in that position. (Photos by the writer.)

The board is authorized to levy the tax under Act 88 of 1913 – and it does not require a voter referendum. Voting against the increase were commissioners Ronnie Peterson, Alicia Ping, Wes Prater, Dan Smith and Rob Turner. They cited several objections, including the timing of a tax increase while many taxpayers are struggling because of the economy, and the unlikelihood that the tax will be lowered in the future, when economic conditions improve. Peterson also felt that the Act 88 funds aren’t being used for their original purpose – to leverage matching dollars for economic development – and instead are being diverted to support county operations.” It was never meant to be a piggy bank for county government,” he said.

The final vote to levy the increased tax passed 8-3, with Ronnie Peterson, Wes Prater and Dan Smith voting against it. Alicia Ping has in the past also voted against the Act 88 tax, but supported it this time – though she voted against the amendment to increase the rate. She hoped commissioners would consider reallocating some funding for the western side of the county, pointing out that there are economic development needs there too, including a lack of decent Internet access.

Far less contentious was an initial vote to move control over administering the county’s 5% accommodation tax from the county treasurer’s office to the finance director. Two members of the Washtenaw County Hotel/Motel Association spoke in support of changing the accommodation ordinance in this way. The vote by commissioners was unanimous, though Dan Smith noted that this is the second time this year that the ordinance has been revised, and he hoped it would be the last. He also expressed some concern that all hoteliers aren’t being treated equitably. A final vote and public hearing on the change is set for Oct. 17.

Commissioners also approved a set of recommendations to guide county administrator Verna McDaniel in her negotiations with the Humane Society of Huron Valley for animal control services. The current contract with HSHV ends on Dec. 31. An accompanying report from a policy task force was discussed only briefly – in part because the final version had been sent to commissioners only that day and there had been little time to digest it, and in part because some commissioners wanted to adjourn so that they could watch the first presidential debate, which began at 9 p.m. The board plans to continue discussion of the issue at a future date.

During the meeting, board chair Conan Smith told commissioners that a caucus would be held immediately prior to the next board meeting – on Nov. 7, at 5:30 p.m. – to discuss appointments to various county boards, commissions and committees. Such appointment caucuses are open to the public. [A listing of all vacancies is found on this website. An online application to apply for an opening can be found here.] The news prompted Ronnie Peterson to criticize the process, which he felt was not sufficiently transparent.

Economic/Agricultural Development Tax

On the agenda was a resolution to authorize levying the Act 88 tax to support agriculture and economic development, as well as an amendment that would raise the rate to 0.06 mills, an increase from the current 0.05 mills. A public hearing was also held on this item.

The board was on track to approve the tax last month at the 0.05 mill rate. But after a public hearing, board chair Conan Smith proposed an amendment to raise the rate to 0.06 mills – an idea he’d informally floated at the board’s Sept. 5 meeting. Some commissioners objected to making a change after the public hearing, which led the board to postpone action until Oct. 3, when another public hearing was scheduled.

Smith’s proposal also gave the office of community and economic development (OCED) the authority to distribute the millage funds.

The millage is authorized under the state’s Act 88 of 1913, and has been levied by the board since 2009. That year, it was levied at 0.04 mills. It was raised to 0.043 in 2010 and 0.05 in 2011. Because the Michigan statute that authorizes this millage predates the state’s Headlee Amendment, the board can levy it without a voter referendum.

The rate of 0.06 mills would generate about $838,578 and cost $6 for each $100,000 of a home’s taxable value. It would generate about $145,483 more than the rate of 0.05 mills. The millage proceeds were proposed to be allocated to the following local entities in 2013, with generally the same amounts that the groups received this year: Ann Arbor SPARK ($200,000), SPARK East ($50,000), the county’s dept. of community & economic development ($140, 331), Eastern Leaders Group ($100,000), promotion of heritage tourism ($65,264), Food System Economic Partnership (FSEP – $15,000), Washtenaw 4-H ($82,500), Washtenaw County 4-H Youth Show ($15,000), and MSU Extension, to support economic development in the local food system ($15,000).

Smith proposed that the additional funds from the increase would be used for the Detroit Region Aerotropolis ($50,000), with any remaining balance – about $95,000 – be allocated to the office of community & economic development, for activities related to those authorized by Act 88. It’s likely that the amount would include additional staff for that office.

Economic/Agricultural Development Tax: Public Hearing/Commentary

Shawn Letwin of Webster Township spoke briefly during the first opportunity for public commentary. He noted that when the increase has been discussed, some people have talked about the fact that incomes in the county are increasing. He said that his income has increased about 300% – because he was downsized three times and made only $10,000 last year, compared to about $30,000 this year. There just isn’t the money now for a tax increase, he said. Letwin told commissioners that he has about $200,000 in debt and will have to finance about $68,000 for his child’s college education. He couldn’t afford the tax increase, and hoped the board would be prudent in their decision.

Two people spoke during the official public hearing on the Act 88 tax. Thomas Partridge said he endorsed the tax but didn’t think the board had leveled with the community. These kinds of taxes are relics of the 18th century, he said. Special interest millages like Act 88 should be replaced by progressive business and personal income taxes, he said. Partridge wanted the board to explain how this tax would contribute to the advancement of agriculture, economic development and tourism. The county needs a prominent site for an agricultural, industrial and scientific fair, he said, as well as a convention center and a large indoor/outdoor theater.

Matt Shane introduced himself as MSU extension director for the district that includes Washtenaw County. He described highlights of how Act 88 revenues benefit the MSU Extension and the 4-H programs that it operates, including some that focus on entrepreneurship and consumer horticulture. 4-H has impacted about 4,500 youth between the ages of 5-19, he said.

Economic/Agricultural Development Tax: Board Discussion – Amendment

The discussion began with a brief overview by Curtis Hedger, the county’s corporation counsel, who reviewed what had happened at the Sept. 19 meeting. Now, he said, the board first would be considering Conan Smith’s amendment to raise the millage rate from 0.05 mills to 0.06 mills. After they deliberated and voted on that amendment, they would then vote on the resolution to levy the Act 88 millage.

Dan Smith noted that the proposal calls for a 20% increase from the current rate, and he wouldn’t support it.

Ronnie Peterson said there’s no question that the real estate market has taken a hit, especially on the county’s east side, where tax and mortgage foreclosures are high. He described his stance toward economic development as aggressive, saying that Act 88 revenues are appropriate to support the services they’ve funded in the past. But he wondered what the rationale is for raising the rate – when would the board see a plan? He felt the increase should be justified before the board acts on it.

Conan Smith, chair of the Washtenaw County board of commissioners.

Conan Smith reviewed how he had introduced the proposed increase at the board’s Sept. 5 meeting, and had passed out a memo to commissioners the next night, at their working session. [.pdf of Smith's Act 88 memo] [Peterson had been absent from that working session.]

Smith said the intent is to maintain current funding levels in the face of declining property values, and to provide additional support to the Detroit Region Aerotropolis. The aerotropolis, which includes Willow Run airport, is currently funded through the county’s general fund. The change would free up general fund money for other uses. Finally, Smith said there’s currently inadequate staff – 1.5 full-time-equivalent positions – to manage the county’s economic development activities. Additional staffing would allow the county to use its economic development funds more efficiently, he said.

Peterson then spoke at length about his concerns, noting that he was one of the people who originally supported the Act 88 millage. He gave credit to Bob Guenzel, the county administrator at the time, as well as former board chair Jeff Irwin and former commissioner Ken Schwartz, who first identified Act 88 as a potential way to raise revenues without seeking voter approval.

It was the first time that the county had been aggressive in addressing economic development needs, Peterson said. The tax was intended to providing matching funds for grants and partners in the community that were doing this work. The need was especially great on the county’s east side. But the millage proceeds were not intended to subsidize county operations, Peterson said. If that’s what the board wants, they should go to the voters and ask. ”It was never meant to be a piggy bank for county government,” Peterson said. He wondered if the proposed tax increase was a way to protect key employees or managers – and if that’s the case, the board should know, he said.

Conan Smith replied that the board hasn’t empowered the county administration to add jobs yet. The current resolution would only authorize an increased levy to create additional funding. If that’s approved, then the board would eventually have to amend the budget and approve any additional jobs.

Peterson objected to not having more details before they vote. There wasn’t a plan for the use of proceeds, he said. He cited several other taxes that would be coming before county residents, including a possible transportation tax and renewal for parks and recreation. It’s ridiculous to ask his constituents to pay more, Peterson said.

Rob Turner also expressed concern about raising the amount. He understood that property values were declining and that meant fewer revenues would be collected if the rate stays the same. But he felt that when property values start increasing again, the rate won’t be decreased. “It’ll be a tax increase forever,” he said.

Saying he respected everyone’s opinions, Yousef Rabhi spoke in favor of the increase. It’s a troubled economy, but how should they help rebuild it? By investing, he said. Funding organizations like Ann Arbor SPARK, the Eastern Leaders Group and others is helping create a stronger economy, he said, and it shows.

Rabhi noted that although other commissioners refer to a 20% increase, that’s really just a $1 increase for a home with a taxable value of $100,000 – from $5 to $6 annually. What’s more, they’re well below the half-mill limit that the county is allowed to levy under Act 88, he said.

Rabhi also disputed Turner’s point about the difficulty of lowering taxes. In fact, everyone loves lowering taxes, Rabhi said – it’s more difficult to raise taxes, and requires the board to take leadership. It’s the right thing to do at the right time, and he hoped commissioners would support the increase.

Leah Gunn said she’d been involved with the Eastern Leaders Group, at Peterson’s invitation, and knew they did a wonderful job. She felt the Act 88 increase was very small and reasonable. She’d be willing to pay more, even though much of the funding is going to the east side of the county. [Gunn is one of four Ann Arbor commissioners.]

County commissioners Alicia Ping and Wes Prater.

Alicia Ping – who represents District 3, covering southern and southwest parts of the county – wondered when the board would talk about how the Act 88 funds are allocated for economic development in other parts of the county, not just the eastern side. There are needs in the west, too, she said – some people can only get dial-up Internet access, for example. That means they can’t work from home if they need to use the Internet, and have to go to somewhere else to get it. “You can’t do business without that sort of access,” she said. Ping indicated support for an approach that didn’t simply fund the same organizations year after year. It’s important to look at the whole county, she said, not just Ypsilanti and Ann Arbor.

Felicia Brabec said she agreed with many of the comments made, especially by Gunn and Rabhi. To her, this feels like a solid plan for economic growth. She shared Ping’s view about the need for strategic planning countywide, and felt that additional staff would help with that effort. It would help in being more tactical to address the county’s needs.

Peterson repeated his point that the Act 88 funds weren’t meant to support jobs within the county organization. Responding to the contention that the increase is small, he said that if your home is in foreclosure, “every dime counts.” He also noted that no elected officials in his district, or any constituents, had asked him to support the increase.

Barbara Bergman called the question. This parliamentary move – designed to end discussion and force a vote on the item – requires a two-thirds majority to pass. That equates to eight votes on the 11-member board.

Wes Prater objected, saying he hadn’t had the opportunity to speak yet. Hedger clarified that the board rule allowing each commissioner to speak before a vote is taken applies only to committee meetings, not the regular board meeting. The question had been called properly, and a vote on it could proceed.

Often calling the question is approved on a voice vote. However, because there seemed to be division on the board, the clerk took a roll-call vote.

Outcome on calling the question: The motion failed on a 5-6 vote. Voting against it were Felicia Brabec, Ronnie Peterson, Alicia Ping, Wes Prater, Dan Smith and Rob Turner.

The discussion resumed, and Prater took his speaking turn. He was bothered that they’re using an act that’s nearly 100 years old, and that had been dormant until recently. Somebody “found” it, he said, so the county started levying this tax. If commissioners want this money for economic development, they should put it on the ballot for voters to decide, he argued. “If it’s good stuff, they’ll approve it,” he said.

Saying he’s supportive of Act 88, Rob Turner did not think an increase was appropriate. In fact, taxes aren’t easy to roll back after they’ve been raised, he said. Some commissioners argue that it’s only a one-dollar increase, but things add up. He compared it to his own family’s phone bill, which started out modestly but over the years has grown because so many things have been added to it. “At some time, you have to stop,” he said. It’s not wise to go above 0.05 mills.

Yousef Rabhi clarified with the administration that the allocations for the Act 88 proceeds aren’t limited to the amounts and organizations that are currently designated to receive the funding. The board has the authority to change that, he said. But this amendment is simply raising the amount of the millage, he said. If someone isn’t happy with supporting Ann Arbor SPARK, then they can lobby against funding it. The point isn’t to steal people’s money, he said. By way of analogy, Rabhi said he can spend a dollar on soda at the corner store. But if everyone pools their dollars, then it’s possible to create jobs and build the community. “Together, we can do more than as individuals,” he said – that’s the point.

Rolland Sizemore Jr. said he planned to support the increase. Responding to Ping’s comments, he said that commissioners work hard on the east side of the county. [Sizemore, who represents District 5, lives in Ypsilanti Township.] He said one of his goals is to expand the Act 88-funded efforts countywide. But it’s the byproducts of the Act 88 funding that are really important, he added. For example, Kalitta Air has invested millions in expanding at the Willow Run airport, he said, and the Wolfpack – a conservancy group co-founded by attorney and former Clinton advisor Paul Dimond and retired Ford executive Ray Pittman – is interested in supporting the proposed recreation center in downtown Ypsilanti, near the Huron River.

County commissioner Ronnie Peterson.

Sizemore described Ypsilanti as a jewel that just needed more polishing. He noted that University of Michigan faculty who are helping design the rec center were surprised when they visited the city. Downtown Ypsilanti can be transformed like Dexter, he said, but people just need to get working on it. [The village of Dexter had been highlighted earlier in the meeting as a recipient of the county's overall environmental excellence award.]

Sizemore characterized the work of Ann Arbor SPARK as “trickle down” regarding job creation, but the community also needs a “trickle up” approach. He felt he’d be “beaten up for it,” but he was supporting the millage increase, though he wasn’t happy with the way in which it had been brought forward.

Prater pointed out that the Ann Arbor District Library has a $65 million bond proposal on the ballot that could mean new taxes, raising money for a new downtown library. And there could be another millage soon for countywide transportation, he noted. Commissioners need to take a hard look at what’s happening and stop this foolishness, he said. They need to start acting like they’re concerned for the taxpaying public. The increase isn’t a lot of money, but it’s the principle, Prater concluded.

Peterson reiterated that he was fine with the 0.05 mill rate, but didn’t want to raise it. His concern is that they’re steering away from its original purpose. He said he totally disagreed with Sizemore – saying this tax increase isn’t about Ypsilanti. The city of Ypsilanti had been doing just fine before Sizemore decided to visit, Petersen said.

Peterson contended that the tax increase is designed to fund an internal program within county government, and he objected to that. If commissioners want more revenue for county operations, they should ask the voters. This is why people don’t trust elected officials, he said. If the board wants to create an economic development department, commissioners should sit around the table and talk about that.

Barbara Bergman called the question. This time, support for that action was unanimous and the clerk called the role for a vote on the amendment.

Outcome on amendment: The amendment to increase the tax passed on a 6-5 vote, with dissent from Dan Smith, Ronnie Peterson, Rob Turner, Wes Prater and Alicia Ping.

Economic/Agricultural Development Tax: Board Discussion – Main Resolution

Dan Smith noted that he’s heard the term “economic development” used during the board’s deliberations, but in fact, Act 88 of 1913 doesn’t mention it. The act’s title is “Advertisement of Agricultural Advantages,” he said, with a subtitle that states: ”Advertisement of state or county agricultural, industrial, trade or tourist advantages; tax levy or appropriation by board of supervisors.” While economic development is being used as a catchall phrase in these discussions, it’s actually a distortion of the original act, he said.

Washtenaw County commissioner Dan Smith.

Wes Prater asked the county’s corporation counsel, Curtis Hedger, to respond to Smith’s comment. Hedger noted that the act was passed nearly 100 years ago, and that while it doesn’t mention economic development directly, it does refer to trade and industry. He thought that it does cover economic development.

Indicating that she had been especially persuaded by Yousef Rabhi’s “passionate” speech, Alicia Ping told her fellow commissioners: “Don’t fall over, but I think I’m going to vote yes on this.” [Previously, Ping had voted against levying the Act 88 millage.] She doesn’t agree with everything it involves, but hoped that the funds could be reallocated in the future to benefit other parts of the county. The resolution would pass regardless of how she voted, Ping acknowledged, but she hoped that other commissioners would remember that she voted yes, the next time they decide how to spend the proceeds.

Rolland Sizemore Jr. agreed with Ping, saying they needed more people working on economic development, and more ideas. They needed to spread out the funding so that a larger part of the county benefits. ”The whole dang county needs help, to be honest with you,” he concluded.

Barbara Bergman again called the question, and received unanimous support to move ahead with the vote on the main resolution.

Outcome on main resolution: The resolution passed on an 8-3 vote, with dissent from Dan Smith, Ronnie Peterson and Wes Prater.

Accommodation Ordinance

The board was asked to consider initial approval of a change to Washtenaw County’s accommodation ordinance that would shift control for administering and enforcing the accommodation tax from the county treasurer to the county finance director.

The ordinance amendment also would shift a 0.7 full-time equivalent accounting job from the treasurer’s office to the county finance department, and amend the accommodation tax policy to clarify that the tax is only assessed against the actual price of a hotel, motel or other rental – not against other amenities that the business might charge its customers, such as Internet access or an extra cot in the room. [.pdf of ordinance amendment] [.pdf of amended accommodation ordinance] [.pdf of amended accommodation policy]

According to a staff memo, the changes are being recommended by the county’s accommodation ordinance commission (AOC), as well as the Ann Arbor and Ypsilanti convention and visitors bureaus, which receive funding from the 5% tax. In 2011, revenues from the tax reached nearly $4 million, and are allocated on a 75%/25% split to the Ann Arbor and Ypsilanti CVBs.

This is the second recent change to the accommodation tax ordinance. At its Aug. 1, 2012 meeting, the board amended the ordinance to exempt cottages and bed & breakfasts with fewer than 14 rooms, as well as individuals who occasionally lease out rooms. These types of establishments account for less than 1% of the total tax collected in Washtenaw County, according to a staff memo accompanying the resolution. Several owners of bed & breakfasts spoke to the board in favor of that amendment at the Aug. 1 meeting, citing concerns over the increased frequency of audits and general attitude of the treasurer’s staff, which they felt was unnecessarily contentious.

Accommodation Tax Ordinance: Public Commentary

Two representatives of the Washtenaw County Hotel/Motel Association addressed the board about the ordinance changes. Joe Sefcovic, general manager of the Holiday Inn on Plymouth Road, is president of the association. He thanked commissioners for bringing forward the ordinance change, and urged them to support it.

John Staples began by telling the board that he’d worked at Weber’s Inn since 1943 – but then laughed and said he’d meant to say he’d worked there for 43 years. [Staples is general manager at Weber's.] He said he’s treasurer of the hotel/motel association, and has been involved in that organization since its inception. Ever since the accommodation tax was first instituted, it has never been collected on anything except room revenue, he said. Staples supported the proposed ordinance changes.

Accommodation Tax Ordinance: Board Discussion

Dan Smith noted that this is the second accommodation ordinance change in less than a year. It sounded like the AOC had taken its time and evaluated this proposal, but he hoped there wouldn’t be more changes anytime soon. Smith said his other concern is that the ordinance isn’t treating all hoteliers the same. There are full-service hotels/motels on the one hand, but also a la carte establishments that charge extra for things like Internet access, a rollaway bed and breakfast. He said he understood the intent of the ordinance, but wasn’t sure it resulted in equitable treatment.

Outcome: Commissioners unanimously gave initial approval to the accommodation ordinance amendments. A final vote is expected on Oct. 17. The board also set a public hearing for that meeting, to seek input on the proposed changes.

Animal Control Services

At their Oct. 3 meeting, commissioners considered a resolution outlining a general set of recommendations for animal control services, put forward by a policy task force that’s been meeting since May. It was an item brought forward during the meeting by Barbara Bergman, and had not been part of the published agenda. [.pdf of Bergman's resolution] The commissioners also received a more detailed report from the task force. [.pdf of policy task force report]

County commissioner Barbara Bergman.

The recommendations are intended to work in concert with a directive already passed by the board at its Sept. 19 meeting. At that meeting, commissioners approved a resolution also brought forward by Bergman that directed county administrator Verna McDaniel to begin negotiations with the Humane Society of Huron Valley toward a new contract for animal control services. The resolution also stated that if McDaniel doesn’t believe sufficient progress is being made by Oct. 30, then she’s authorized to issue a request for proposals (RFP) to seek bids from other organizations.

The issue of how to handle animal control services – including state-mandated services as well as non-mandated services – dates back to budget cuts proposed in 2011. The county now has a contract with HSHV through the end of 2012. Early this year, the board formed a policy task force and a separate work group, led by Sheriff Jerry Clayton, to analyze costs for services that HSHV now provides. For the most recent Chronicle coverage of this effort, see: “Task Force: Negotiate with Humane Society.”

At the board’s Sept. 19 meeting, much of the debate centered on the fact that formal recommendations from the task force hadn’t yet been presented to the board. Those recommendations are intended to guide negotiations with HSHV, and to serve as the foundation for a possible RFP. There were also questions over how much flexibility McDaniel would have in her negotiations. The current 2013 budget has allocated $250,000 for animal control services. This year, the county is paying $415,000 to HSHV, down from $500,000 in 2011. Commissioners expect that the final amount negotiated for 2013 will be higher than the budgeted $250,000 – and if that’s the case, the board will need to amend the budget.

The service recommendations described in the Oct. 3 resolution include: (1) licensing all dogs at the point of adoption or recovery; (2) holding all stray animals for only the minimum number of days required by state law; (3) providing animal cruelty investigations; (4) holding animals for bite quarantine or other court-mandated reasons for the minimum time required by state law; (5) specifying by contract the required holding period, medical attention and basic humane care for animals; (6) posting information on the county website regarding animals that are available for adoption or recovery; (7) supporting county policies for registration and licensing of animals; and (8) establishing a monthly report for the county board of commissioners regarding animal control operating metrics.

HSHV board vice president Mark Heusel attended the Oct. 3 meeting, but did not formally address the board.

Animal Control Services: Board Discussion

Barbara Bergman began by thanking everyone who’d worked on this project. The recommendations warrant further discussion, she said, but not that night – the first presidential debate was being held later in the evening, and people wanted to get home to watch it, she said. But county administrator Verna McDaniel needed more than “fluff” to begin negotiations, Bergman said. The recommendations are intended to provide guidelines for those talks.

From left: Mark Heusel of the Humane Society of Huron Valley board talks with county commissioner Yousef Rabhi before the Oct. 3, 2012 county board.

When some commissioners started asking about items in the task force report, Bergman reminded them that the motion on the floor related to her resolution of recommendations – not the report. Rob Turner asked a question about process: Is this just a starting point for a fuller discussion about animal control policy?

Conan Smith replied that the board will need to take a series of steps. The first thing is for McDaniel to negotiate with HSHV, based on the set of recommendations that the board would be voting on that night.

Dan Smith made a series of comparisons intended to put the cost of animal services in context. The HSHV has estimated that the total cost of housing an animal is $53.13 per day, he noted. If you do a Priceline.com search, you can find hotel rooms in the Ann Arbor area for $50 a night. Or multiplying that amount by 30 days, you can find a pretty nice apartment in the area for $1,500 per month, he said. And if you use it as a monthly mortgage payment, that would get you a $333,860 house based on 4% interest and a standard 30-year mortgage.

Turner pointed out that this task force report was sent to commissioners at a late date. What’s more, some of the information is incorrect, he said, and as a task force member, he wanted to go over it and make sure it accurately reflects the group’s work. He agreed with Bergman that it wasn’t the right time to discuss the report. They need more time to review it before bringing back questions and comments.

Leah Gunn noted that the resolution before the board gave direction to McDaniel. Time is of the essence, she said. The county needs to find out whether it can negotiate a deal with HSHV. If not, the county needs to take other steps, she said.

Outcome: The board voted unanimously to approve the recommendations related to animal control services.

Future discussions about this issue will likely prove contentious. In an email sent to the board and HSHV representatives on Oct. 2, Gunn outlined her position this way:

Since the Board has instructed the County Administrator to negotiate with the Humane Society of Huron Valley, I would suggest that we vote to accept the report as prepared by Conan, and then vote on the resolution presented by Barbara. Her resolution is more succinct, is in resolution format, and contains language saying that we (the BOC) authorize the “purchase of the listed services” to be provided by a vendor. These are the minimum required by law. As part of this process, Verna has already suggested that she talk with those jurisdictions which have animal control ordinances. I would leave this in her good hands.

The other parts of the report are merely for reference, and I simply do not agree with the numbers that were provided to the Sheriff’s Dept. We are still in the dark about exactly how many dogs are our responsibility. I emphasize the we are NOT responsible for people’s pet dogs. If someone owns a dog, that is their responsibility, not that of the taxpayers’ of Washtenaw County.

As long as one child in Washtenaw County goes to bed hungry, I am not much interested in dogs.

Environmental Awards

Four environmental excellence awards were given out by the Washtenaw County commissioners at their Oct. 3 meeting. The awards ”honor local businesses and non-profit organizations who provide exceptional leadership in environmental protection during National Pollution Prevention Week.” The winners were chosen by the county’s environmental health division and the office of the water resources commissioner.

The University of Michigan’s Radrick Farms Golf Course received the 2012 Excellence in Water Quality Protection Award for its “innovative water and energy conservation measures, environmental stewardship programs, and stormwater management systems.” The 2012 Excellence in Waste Reduction and Recycling Award was given to Wylie Elementary School of Dexter, for its “extensive recycling program, purchasing of recycled products, and educating their students in waste reduction and conservation ethics.” And The Trenton Corp. of Ann Arbor received the 2012 Excellence in Pollution Prevention Award for “reducing the use of toxic substances and preventing pollution before it is produced.”

The overall winner, covering all three categories, was the village of Dexter. Janis Bobrin, the county’s water resources commissioner, gave the award, which was accepted by village manager Donna Dettling.

After the presentations, Bobrin received a standing ovation from the board and audience. She had noted that this will be her last time presenting the awards – she did not run for re-election, and will leave office later this year.

Misc. Communications

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

Misc. Communications: Appointments Caucus

Board chair Conan Smith announced that there are a number of appointments to be made to various county boards, commissions and committees, so there will be an appointments caucus on Wednesday, Nov. 7 starting at 5:30 p.m. in the conference room of the county administration building. [The building, where board meetings are held, is located at 220 N. Main in Ann Arbor. The caucus meetings are open to the public.]

Commissioners will meet in caucus to review applications, he said. For the appointments on which there’s consensus, those names will be brought forward to the board at its meeting that same evening. The rest would be considered at the board’s Dec. 5 meeting. He noted that in November, there will be only one meeting of the board.

A listing of all vacancies, as well as an online application to apply for an opening, can be found on the county’s website.

Wes Prater noted that there are two vacancies on the veterans affairs committee. He wondered if those vacancies have been posted. Pete Simms of the county clerk’s office reported that he’d spoken with Michael Smith, director of the county department of veterans affairs, and that the positions would be posted in the Washtenaw Legal News. He also confirmed that all of the VFW posts in the county would be contacted.

Ronnie Peterson then asked where exactly the caucus would be held. When Smith repeated the location, Peterson replied that it’s important for citizens to know the appointments process. Smith explained that as board chair, he is responsible for making nominations to the board for their approval, but before he does, he solicits feedback from commissioners. It’s not a necessary part of the process, he said – that is, the caucus isn’t required. The required public part happens at the board meetings, when nominations are put forward and commissioners vote on them.

Peterson contended that he didn’t know that appointment caucuses were being held. Why are some people appointed and others aren’t? It’s important to do this work in the public eye, he said. Peterson was sure that some commissioners already had lined up votes for the candidates they wanted to appoint, but he said he doesn’t do those kind of deals.

Leah Gunn observed that notices about the appointments caucus meetings are posted and the meetings are open to the public and attended by the press. [Since late 2008, The Chronicle has attended most of those caucuses, which typically occur twice a year.] Gunn pointed out that some appointments require specific qualifications, which means that not everyone who applies is qualified. She described it as a fair, open process.

Peterson reiterated his complaints about making deals in back rooms. [Peterson periodically raises this issue. He objects to holding any meeting outside the main boardroom where proceedings are televised.]

Present: Barbara Bergman, Felicia Brabec, Leah Gunn, Ronnie Peterson, Alicia Ping, Wes Prater, Yousef Rabhi, Rolland Sizemore Jr., Conan Smith, Dan Smith, Rob Turner.

Next regular board meeting: Wednesday, Oct. 17, 2012 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.

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!

The contract has been renewed annually since the Washtenaw Development Council and Ann Arbor SPARK merged in 2006. Previously, Ann Arbor had contracted with the WDC for the business support services for which it now contracts with SPARK. On June 20, 2005, the city council authorized that one-year contract with WDC for $40,000. This year’s $75,000 contract with SPARK describes the organization’s focus the same way it did last year, as “building our innovation-focused community through continual proactive support of entrepreneurs, regional businesses, university tech transfer offices, and networking organizations.”

Ann Arbor SPARK is also the contractor hired by the city’s local development finance authority (LDFA) to operate a business accelerator for the city’s SmartZone, one of 11 such districts established in the early 2000s by the Michigan Economic Development Corp. (MEDC). The SmartZone is funded by a tax increment finance (TIF) mechanism, which in the current fiscal year captured around $1.5 million in taxes from a TIF district (which is the union of the Ann Arbor and Ypsilanti Downtown Development Authority districts, though revenue is generated only in Ann Arbor’s district.) The specific taxes on which the increment since 2002 is captured are the school operating and state education taxes, which would otherwise be sent to the state and then redistributed back to local school districts.

SPARK’s contract was included on the city council’s consent agenda, which are items involving less than $100,000. Consent agenda items are considered routine, and are voted on as a set. Any councilmember can pull out an individual item for separate discussion, which Sabra Briere (Ward 1) chose to do for the SPARK contract. The discussion did not result in much controversy and the vote was unanimous.

For recent Chronicle reporting on the LDFA and its relationship with SPARK, see: “SmartZone Group OKs SPARK Contract.”

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 indigent veterans millage was passed with dissent from Alicia Ping. It will cost homeowners about $2.50 for every $100,000 of a home’s taxable value. It’s expected to raise $344,486 – about $11,000 less than in 2010, due to projected decreases of property values. The county first began levying this millage in 2008. Services are administered through the county’s department of veterans affairs.

The millage for economic development and agriculture – authorized under the state’s Act 88 – was approved on a 7-to-3 vote, with dissent from Alicia Ping, Wes Prater, and Dan Smith. Kristin Judge was absent. It will cost homeowners $5 for each $100,000 of their home’s taxable value.

The anticipated $688,913 in millage proceeds will be allocated to several local entities: Ann Arbor SPARK ($230,000), SPARK East ($50,000), the county’s dept. of community & economic development ($131,149), Eastern Leaders Group ($100,000), promotion of heritage tourism ($65,264), Food System Economic Partnership (FSEP – $15,000), Washtenaw 4-H ($82,500) and Washtenaw County 4-H Youth Show ($15,000).

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

Yousef Rabhi, left, who won the District 11 Democratic primary for county commissioner, talks with commissioner Leah Gunn (District 9) and Jim Dries, chief deputy clerk, before the Sept. 15 county board meeting.

No one spoke during any of the four opportunities for public commentary, nor did anyone speak at a public hearing for the indigent veterans millage. The board set another public hearing for Oct. 6 to seek input on an economic development millage it plans to levy.

Also during Wednesday’s meeting, the board passed the five-year master plan for Washtenaw County Parks & Recreation, and gave initial approval to backing a bond for a $2.8 million Western Washtenaw Recycling Authority project. The project will include a facility upgrade to handle single-stream recycling.

The board also approved a $6.5 million first-quarter budget and personnel changes for the Community Support & Treatment Services (CSTS) department, which operates under a fiscal year that’s aligned with the state and begins on Oct. 1. CSTS is in the process of merging with the Washtenaw Community Health Organization (WCHO), a partnership between the county and the University of Michigan Health System. The board got an update on that merger at its Sept. 16 working session.

Millages for Vets, Economic Development

Commissioners acted on two millages at Wednesday’s meeting, giving final approval to one and setting a public hearing – plus initial approval – for another.

The board set a public hearing for Oct. 6 to get input on levying an economic development tax of 0.043 mills. Known as the Act 88 millage, it is expected to generate roughly $611,266 annually and would cost homeowners $4.30 for every $100,000 of a home’s taxable value. Because Act 88 predates the state’s Headlee Amendment, it can be approved by the board without a voter referendum. The board is expected to vote on the millage at its Oct. 6 meeting.

It’s a slight increase over last year, when the board levied 0.04 mills under Act 88, and allocated funds to Ann Arbor SPARK, the Eastern Leaders Group, 4-H activities, horticulture/MSU Extension, agricultural innovation/MSU Extension, the Food System Economic Partnership, heritage tourism and the director’s job of the county Economic Development and Energy Department. So far, no specific allocation has been designated for the 2011 Act 88 funds. The resolution setting the public hearing simply stated that the board has the “option of assigning some of the generated funds to a non-profit organization which is engaged in the purpose of advertising the advantages of and encouraging trade within the County.”

Also on Wednesday, the board held a public hearing and gave final approval to levy 1/40 mill for indigent veterans’ relief. No one spoke at the hearing. The millage does not require voter approval and would raise an estimated $362,415 for services to local veterans. It was first passed two years ago, and cost homeowners $2.50 for every $100,000 of a home’s taxable value. The funds are administered by the Department of Veteran Affairs, led by director Mark R. Lindke.

County Parks & Rec Master Plan

The board adopted a five-year master plan for the county’s parks and recreation department, spanning 2010-2014. Highlights of the plan were presented at a Sept. 2 working session of the board, and a draft is posted on the parks and recreation website. The master plan must be updated and adopted by the county every five years in order to qualify for certain state grants. The city of Ann Arbor is going through a similar process, updating its Parks, Recreation and Open Space plan, known as PROS.

Among the projects in the county’s master plan are upgrades to the County Farm Park and Meri Lou Murray Recreation Center, Cavanaugh Lake County Park, Independence Lake County Park, Osborne Mills Preserve, Pierce Lake Golf Course and Park, and several others. [.pdf file of action plan]

At the Sept. 2 working session, parks and recreation director Bob Tetens told commissioners that the department had been formed in the 1970s with land given to it by the county road commission. At the time, it was “not much more than a roadside picnic stand with a table and trash barrel,” Tetens said. Now, the system maintains 1,943 acres of parkland and 1,857 acres of nature preserves across the county.

The acquisition of nature preserves is attributable to a 10-year, 0.25 mill tax passed in 2000 to support the natural areas preservation program, known as NAPP. Since then, the county has established 17 new nature preserves. The millage will have generated about $27.5 million by the time it expires.

The NAPP millage is up for renewal this year, and commissioners have previously voted to put it on the Nov. 2 ballot.  Because of Headlee rollbacks, the renewal rate will be slightly lower – 0.2409 mill – and is expected to raise roughly $3 million in annual revenues if it passes.

At the Sept. 2 working session, commissioner Rolland Sizemore Jr. called the parks and recreation system “one of the jewels of this county.”

Bonds for Recycling, WCC

The board gave initial approval to backing a bond for a Western Washtenaw Recycling Authority project. The $2.8 million project would expand and upgrade WWRA facilities, including the addition of equipment for single-stream recycling. The facility serves Chelsea and the townships of Bridgewater, Dexter, Lima and Lyndon. Sylvan Township, Manchester Township and the village of Manchester are expected to be served by the facility in the future.

There was no discussion of the project at Wednesday’s meeting, but during the Sept. 8 administrative briefing – held to review the upcoming agenda – Leah Gunn, one of the commissioners representing Ann Arbor, asked why the western Washtenaw municipalities weren’t using the Ann Arbor Materials Recovery Facility (MRF), which was recently upgraded to handle single-stream recycling.

Commissioner Mark Ouimet, whose district covers parts of the county’s west side, said he’d asked that same question of Frank Hammer, chair of the Western Washtenaw Recycling Authority’s board. Apparently, Ouimet said, there are some townships that don’t want to deal with Ann Arbor. When Gunn pointed out that MRF has contracts with Lansing and Toledo, Ouimet said, “It’s like anything else – it seems to be an issue of control.”

Ken Schwartz – a commissioner who represents the townships of Ann Arbor, Superior, Salem and Northfield, and portions of Webster Township – noted that he serves on the county’s board of public works, which will be establishing special assessments to pay for the bond over 15 years. He said the sentiment on the west side of the county is that their recycling efforts have been successful because of the local focus.

If all eight communities participate, the assessment will be about $21 annually per household. If only the current five communities are part of the project, that assessment will be roughly $29 per household. In addition, $26 per household in the townships and $44 for Chelsea and Manchester residents would be assessed annually to cover ongoing maintenance and operations. Schwartz said he didn’t expect there’d be much opposition to the project.

The county board is expected to vote on final approval for the bond at its Oct. 6 meeting.

Also on Wednesday, commissioners gave final approval to transfer the use of $10 million in federal Recovery Zone Economic Development Bonds from the county to the Washtenaw Community College. WCC plans to use the bonds to fund construction of a parking structure. The county has been allocated just over $22 million for this type of bond as part of the 2009 federal stimulus bill, but has not used any of its allocation, which expires at the end of 2010.

Fees: Land Records, Dog Licenses

County clerk Larry Kestenbaum and chief deputy clerk Jim Dries both attended Wednesday’s meeting, on hand to answer any possible questions regarding a resolution related to their office: Fees for remote online-access searching and copying of digital land records.

The board gave initial approval to the resolution, which sets the following fee schedule:

• Single document reproduction: $1.20 per page
• One week unlimited search and reproduction: $400 per week
• One month unlimited search and reproduction: $1,300 per month
• Annual unlimited search and reproduction: $12,000 per year (unchanged)
• Records can be searched for free at the register of deeds office during business hours.

The county has an electronic database of property record images dating back to January 1969. According to a memo accompanying Wednesday’s resolution, the database is used by homeowners, realtors, title insurers, financial institutions, legal professionals, law enforcement, local and regional planners, real estate developers and local assessors to determine ownership of real property and to identify any encumbrances that may affect such ownership.

Previously, fees were paid annually or on a per-copy basis via remote online access. The clerk/register of deeds office expects to bring in $7,800 in monthly revenues from the fees.

Also during Wednesday’s meeting, the board gave final approval to year-round dog license renewals, with the added option of a three-year dog license. Currently, a one-year dog license is available for purchase starting Dec. 1 for the upcoming year. Dog owners have until March 1 to buy a one-year license before their previous license expires. The board also approved a new fee schedule: Licenses will cost $1 a month for a maximum of 3 years for spayed or neutered dogs, or $2 a month for unaltered dogs.

The licenses are administered by the county treasurer’s office. Applications can be filled out online.

CSTS Budget Approved

The board approved a $6.5 million budget for the Community Support & Treatment Services (CSTS) department for the first quarter of its fiscal year, which begins Oct. 1. The approval included included several personnel changes related to the CSTS merger with the Washtenaw Community Health Organization (WCHO), which is in progress. The WCHO is a partnership between the county and the University of Michigan Health System. CSTS provides mental health services under contract with the WCHO, which offers a range of services for residents, including ones related to substance abuse.

The board got an update on the merger at their Sept. 16 working session from Patrick Barrie, WCHO’s executive director, and Donna Sabourin, CSTS director.

Transfer of Travel Money Item Removed from Agenda

At the Sept. 1, 2010 board meeting, commissioner Kristin Judge had proposed transferring no more than $1,300 from commissioner Ronnie Peterson’s expense account, to be moved into her own account. According to Judge, the funding would be used to cover travel expenses. From Chronicle coverage:

Judge explained that she exceeded her allocation because of her work on a cyber-citizen coalition, an initiative she’s spearheading to address Internet-related crime. The effort is being recognized by the National Initiative on Cybersecurity Education, based in Washington, D.C. Judge said she traveled to D.C. to participate in a NICE meeting, and she hopes to get grant funding for the Washtenaw effort. A kick-off event for that effort is set for Oct. 6 from 8-10 a.m. [at Washtenaw Community College's Morris Lawrence Building]. Internet crime is the No. 1 concern of constituents, Judge said, adding that Washtenaw County needs to stay at the forefront of efforts to address it.

However, at the Sept. 1 meeting, commissioner Leah Gunn objected to the transfer. Conan Smith moved to table action on it until Sept. 15, which the board agreed to do – with dissent from Judge and Peterson.

The item appeared on Wednesday’s agenda, but during the meeting Judge asked that it be removed from consideration. There was no additional discussion.

Misc. Communications

Two commissioners gave updates during the time set aside for items for current or future discussion.

Wes Prater reported that at their last meeting, Washtenaw County road commissioners reviewed a five-year, $30 million capital improvement plan (CIP), from 2011-2015. Those $30 million in road projects will be funded from the Michigan Transportation Fund. However, Prater said, another $101 million in road projects for the county are unfunded, and the road commission is still looking for funds to replace six bridges that are out, mostly located in the western part of the county.

Kristin Judge told her colleagues that the SEMCOG (Southeast Michigan Council of Governments) legislative task force had held its first meeting earlier that day. She and Saline mayor Gretchen Driskell are members. The group looked at possible issues that they might lobby for at the state and federal levels, Judge said, including transportation, brownfield redevelopment and regional collaboration.

There was consensus that Michgian needs a new tax structure, she said, and that if SEMCOG and other groups can come together on the issue with one strong voice, there might be opportunity to get something done in Lansing – especially with new legislators and a new governor coming into office. [Gov. Jennifer Granholm and many state legislators are term-limited and can't seek reelection.] Judge noted that the group of new legislators might include some current commissioners – Republican Mark Ouimet and Democrat Jeff Irwin won their primaries for state representative in Districts 52 and 53, respectively.

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

Absent: Jessica Ping

Next board meeting: The next regular meeting is Wednesday, Oct. 6, 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. (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. [confirm date]

Though federal legislation expanded the types of businesses that can use the bonds, a national credit crunch has essentially slowed potential deals to a halt. “We await the projects,” said John Axe, the EDC’s bond counsel. Unless extended by Congress, the program expires at the end of 2010.

Recovery Zone Facility Bonds: No Takers Yet

Washtenaw County has been allocated just over $33 million in Recovery Zone Facility Bonds, as part of the American Recovery and Reinvestment Act – the federal stimulus bill –  passed in February 2009. Designed to spur private-sector investment, these tax-free bonds must be used for projects within a defined “recovery zone.” In September 2009, the county board of commissioners designated the entire county as a recovery zone for those purposes. The EDC board, which handles applications for these bonds, reconvened that same month, for the first time since March 2005.

In the past, facility bonds were mostly restricted to use by manufacturers. But last year’s legislation expanded the range of businesses that can apply for the bonds. Now, the only exceptions are: 1) rental or residential properties; 2) private or commercial golf courses; 3) massage parlors, hot tub or suntan facilities; 4) race tracks or other gambling establishments; or 5) any store whose principal business is the sale of alcoholic beverages for consumption off premises.

“This opens it up big-time,” said John Axe of Axe & Ecklund, a Grosse Pointe Farms firm that provides bond counsel services to public entities across the state.

Though the county would issue the bonds, other elements are required. Most importantly, a business would need to secure financing – and banks aren’t making many loans these days, Axe said. The situation isn’t unique to Washtenaw County, he said. [This issue was highlighted recently in a March 15 Wall Street Journal article, which used Ypsilanti-based Michigan Ladder Co. and the Bank of Ann Arbor as examples of how small businesses are being squeezed by a national credit crunch.]

Banks are needed to do a credit analysis on the deal, Axe said, and to buy the bonds or issue a letter of credit. From the EDC’s perspective, he added, if the deal is satisfactory to a bank, it would be satisfactory to the county.

Stephen Ranzini, an EDC board member and president of University Bank, noted that community banks are more likely than big banks to make loans at this point. But because of their smaller size, community banks are more limited in the size of loans they can make. Ranzini said that’s why he has contacted his peers at other local community banks, hoping to form a consortium that would allow them, as a group, to finance larger deals.

In addition to the county’s available allocation of recovery zone bonds for the private sector, the city of Ann Arbor was also allocated about $17 million under the same program. Ranzini – who also serves on the Ann Arbor EDC board – reported that like the county, the city hasn’t yet done any deals. [There are 10 EDCs countywide, but only Ann Arbor and Washtenaw County have been allocated recovery bond funds through this program.]

However, Ranzini said there are some potential projects that might move forward: 1) a company that’s working with the University of Michigan, possibly to lease lab space at the former Pfizer complex, which UM now owns; 2) a hotel in the Briarwood Mall area, and 3) a hotel/conference center development proposed by Valiant Group on the city-owned Library Lot site.

Mike Finney, CEO of Ann Arbor SPARK – the region’s economic development agency – attended Monday’s meeting and said he had recently sent a potential deal to Axe for review, as a project for the county’s recovery bonds. It involves a data center project, he said, at roughly $30 million. However, the business has not yet secured bank financing, Finney said.

There was some discussion about the minimum amount that would qualify a deal for consideration. Finney had been under the impression that the total project had to be at least $10 million. Axe and Ranzini clarified that there was no such minimum. Axe said that as a practical matter, anything under $2 million probably wasn’t worth doing from the perspective of the business – given the fees, legal costs and other expenses associated with completing a deal.

At the EDC board’s September 2009 meeting, a fee schedule had been distributed to board members. For private-sector financing, fees include: 1) $500 to apply, 2) $500 at the time when a “resolution of inducement” is issued, 3) $500 when the project’s plan is approved, and 4) 1/8% of the face amount of the bond issue, paid at closing. In addition, processing costs – which vary, depending on the deal – would be charged to the applicant, and include the cost of the bond counsel. For deals over $1 million, the minimum fee for the bond counsel is $12,000.

Deadline Approaches, Possibility of Extension Discussed

John Axe told the EDC board that it typically takes five to six months to complete a deal, though it might be possible to do one in four months or so. But if they don’t have a “live project” by August or September at the very latest, they probably wouldn’t have time to get it done by the end of the year, when the bond program expires.

Washtenaw County administrator Bob Guenzel asked whether Congress might extend the program. Axe said it was difficult to know – currently, health care legislation is taking priority in Washington. It doesn’t look promising, he added, but like the Michigan legislature, Congress often acts at the last minute in the midnight hour, when no one is watching.

Axe also noted that a congressman from Michigan – Rep. Sandy Levin (D-Royal Oak) – recently became chairman of the powerful House Ways & Means Committee. It’s possible that Levin can provide more information, and indicate what he’d be willing to do to extend the legislation, given that it’s not a particularly partisan issue, Axe said.

Marketing the Recovery Bond Program

During Monday’s meeting, Ranzini pressed Finney about marketing the bond program. Ranzini had raised the issue at the September 2009 EDC board meeting as well. From the meeting minutes:

Stephen Lange Ranzini asked Mike Finney about the kinds of advertising or marketing SPARK has in place for getting the word out regarding the allocation to the WCEDC. Finney replied that none was in place due to the new nature of the funding opportunity. He added that it would be advantageous for the WCEDC to examine SPARK’s “pipeline” of current projects and find ways to reach the 300 or so companies that are in their retention program using other methods of marketing. Finney committed to create a one-page marketing program outlining how SPARK would get the word out to the business community regarding the Recovery Zone Bond opportunity.

On Monday, Ranzini said he hadn’t seen mention of the bond program in SPARK’s weekly newsletter, which he described as one of SPARK’s primary marketing tools. Finney replied that information had been included in the newsletter, and that the program had received good media coverage. Finney said SPARK had issued a press release, and had posted information on its website.

Ranzini said he thought that SPARK should refresh its marketing efforts, saying that executives he’d talked with at McKinley and DTE hadn’t heard about the program. “I think more could be done,” he said.

Finney said it would always be possible to find people who weren’t aware of a program, and noted that executives of both McKinley and DTE are involved with SPARK and have received information about the bonds. [McKinley CEO Albert Berriz is on SPARK's board; Trevor Lauer, DTE Energy's vice president of marketing, is on SPARK's executive committee.]

Rob Aldrich, the EDC board’s chair, asked Finney to loop in EDC board members with whatever marketing materials SPARK distributes.

Ottawa County Request

The EDC board also discussed a request from Al Vanderberg, administrator of Ottawa County. Vanderberg is asking that Washtenaw County transfer any unused allocation of its recovery bonds to Ottawa County. In a March 8, 2010 email sent to Bob Guenzel, Vanderberg wrote that Ottawa County has used its allocation of $31 million and has at least another $60 million of projects that could use the bond funding. “We believe that the state might be willing to transfer unused RZFB allocations between counties if both counties are willing,” he wrote.

John Axe suggested holding off on any decision at this point, given that there’s still time for projects in Washtenaw County to come forward. He also pointed out that even if Washtenaw County relinquished its allocation back to the state, there’s no guarantee that the state would reallocate that amount to Ottawa County.

There was some discussion about what Ottawa County is doing to attract projects that require the additional bond financing. [According to a Feb. 24, 2010 article in the Grand Haven Tribune, Ottawa County's entire $31 million recovery bond allocation will be used for a proposed $90 million powdered milk processing facility at a former Delphi plant in Coopersville, northwest of Grand Rapids.]

Mike Finney offered to try to find out whether there are actual additional projects in the works, or whether Ottawa County officials are just “tire kicking.”

Guenzel said he’d inform Vanderberg that the earliest they’d make a decision is at their next meeting, on June 15.

Memorandum of Understanding with Ann Arbor SPARK

During Monday’s meeting, the EDC board also discussed revising a memorandum of understanding (MOU) with Ann Arbor SPARK. The existing MOU was executed in 2002 between the EDC and the Washtenaw Development Council – the predecessor to Ann Arbor SPARK – outlining support services that the WDC would provide, such as marketing and outreach. [.pdf file of current MOU]

Under the MOU, the EDC makes payments to the WDC – now SPARK – only when the EDC collects fees from completed deals.  Mike Finney, SPARK’s CEO, said because there’s so little activity, the existing agreement would be fine. The workload for SPARK’s staff won’t change because the demand for work related to the EDC is so low, he said. The county staff is handling administrative tasks related to the EDC, such as taking minutes at board meetings.

Rob Aldrich, the board’s chair, questioned whether the existing MOU was still valid, given that Ann Arbor SPARK had merged with WDC. Finney clarified that after the merger, the WDC was actually the surviving entity – it had simply been renamed Ann Arbor SPARK.

Aldrich said the document should be reviewed – Jim Libs, the board’s treasurer, will take on that task. Libs was chair of the EDC board when the original MOU was completed.

Board members present: Rob Aldrich (chair), Stephen Ranzini (vice chair), Ingrid Ault, Bob Guenzel, Pam Horiszny, Jeff Irwin, Jim Libs, Michael Simon, Conan Smith. Others: Mark Ouimet, Curtis Hedger, Verna McDaniel, John Axe, Stephanie Jensen.

Next meeting: The EDC board has scheduled quarterly meetings, with the next one on June 15, 2010. The meetings begin at 3:30 p.m. in the county administration building’s board room, 220 N. Main St. in Ann Arbor.

Commissioner Mark Ouimet asked to have the vote broken into two parts. A Republican representing more rural areas of the county, Ouimet wanted:

• one vote on money to fund 4-H, horticulture/MSU Extension, an agricultural innovation effort and the Food Systems Economic Partnership;
• a second vote to fund the economic development agency Ann Arbor SPARK, SPARK East, the Eastern Leaders Group and a new county office, the Economic Development and Energy Department, to be led by Tony VanDerworp.

But Ouimet’s colleagues on the board were unprepared for the change. A number struggled to follow his plan for unbundling items in the single resolution in front of them and what the potential defeat of any portion of the plan would mean.

Corporation Counsel Curt Hedger fielded commissioners’ questions, saying that if any part of the plan was voted down, the proposed 0.04-mill tax would be reduced, based on the allocations for the respective programs.

But the matter became still more complicated when Commissioner Jeff Irwin suggested that instead of Ouimet’s two votes, the board could vote on funding each of the eight programs individually. That suggestion was followed by a motion to table the vote by commissioners Ronnie Peterson and Ken Schwartz.

Referred to as an Act 88 millage – for the state statute that permits it – the proposed tax would increase property taxes $4 per $100,000 of taxable value. Act 88 allows a tax to fund programs that create jobs and reduce unemployment. No voter approval is needed. [.PDF of Act 88 resolution]

Implementing the tax would provide some relief for county officials who’ve struggled with budget deficits as revenue from property taxes and state government have contracted. The county has proposed cuts in its 2010 and 2011 budget to close a deficit of about $30 million for those two years. The Act 88 millage was originally proposed at a lower rate to raise $250,000 for only Ann Arbor SPARK and SPARK East. [Previous Chronicle coverage from the board's Oct. 7, 2009 board meeting on deliberations and public commentary regarding Act 88.]

In an interview after the board meeting, Ouimet said he had planned to support funding the ag-related programs via the millage, but would have voted against the other four programs. That doesn’t reflect any dissatisfaction with the economic development programs, said Ouimet, who serves on the Ann Arbor SPARK board. However, those appropriations should come from the general fund, he said.

That thinking runs counter to other county officials’ interest in freeing up general fund dollars. The proposed allocations for SPARK and SPARK East are $200,000 and $50,00 respectively; the Eastern Leaders Group, $100,000.

Ouimet added that he expected the entire millage package would ultimately pass, regardless of his position.

But that didn’t salve the sting for Commissioner Barbara Bergman, a Democrat who, after the meeting, suggested Ouimet was “trying to have his cake and eat it, too.”

The inference is that Ouimet was trying to avoid conflicts with any constituents in northwest Washtenaw County who might be unhappy with a tax to support economic development in the urban and eastern parts of the county, without running afoul of their interests in the ag-related funding.

Ouimet laughed off Bergman’s comment. But the jostling is apt to continue with several commissioners running – or considering runs – for state office next year. Ouimet is among those ready to run for the state Legislature. Irwin, a Democrat from Ann Arbor, is a candidate in another district and Schwartz is a potential Democratic candidate for the same seat as Ouimet, in the 52nd House District. [Previous Chronicle coverage of upcoming state elections: "State Legislative Candidates Lining Up" and "State Races in Districts 54, 55 Take Shape"]

Tax to Support Indigent Veterans

Another millage passed with neither debate nor comment. A tax of 1/40th of a mill will generate about $390,000 to support services for indigent veterans.

In addition, the county board approved changes to labor contracts that include concessions negotiated to help the county deal with its budget woes in 2010 and 2011. AFSCME Local 2733, the largest union at about 650 workers, will forgo pay raises, saving the county $5.79 million. The deal was announced earlier this month. [.PDF of resolution approving AFSCME agreement.]

Similar concessions negotiated with the Michigan Nurses Association and Assistant Prosecutors Association/Public Defenders Association were also approved. Union members had previously OK’d the changes.

There’s a public hearing on the proposed budget today at 6 p.m. in the board room, 220 N. Main St.

Reports on Radios, Roads

Wednesday’s short board session also included a report by County Administrator Bob Guenzel on the emergency-services communication program.

Funded by a countywide, voter-approved tax, the so-called 800 Mhz program will let police, firefighters and other emergency responders communicate easily and eliminate almost all geographic gaps in emergency radio coverage. Guenzel told the county board that the installation was progressing with five of seven towers completed, and network and microwave equipment installed. The work should be completed this coming summer.

In remarks by board members, Commissioner Wes Prater advised colleagues that the county Road Commission will cut back on plowing local road this winter.

To save money, the road commission will wait until a 4-inch snowfall before plowing local roads, said Prater, the county board’s liaison to the road commission. And trucks will be going easy on salt: The cost is up around 75 percent, Prater said.

A statement on the county website is more specific: In it, Steven Puuri managing director of the commission, identifies the affected roads as gravel roads and subdivision streets, which experience the lowest traffic volumes and lowest speeds.

In addition to a 4-inch snow, severe blowing and drifting or an ice storm could trigger plowing, he wrote. [.PDF of memo outlining service adjustments]

The Oct. 6 statement attributes the service reduction to successive years of declining revenue from the state fuel tax, which at 19 cents is well below neighboring Ohio and Wisconsin.

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: Wednesday, Nov. 4 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.

Public hearing: The board will hold a public hearing focused on the 2010-2011 budget tonight at 6 p.m. at the County Administration Building, 220 N. Main St.

About the writer: Judy McGovern lives in Ann Arbor. She has worked as a journalist here, and in Ohio, New York and several other states.

County administrator Bob Guenzel has proposed that the county’s nearly 300 non-union employees receive pay cuts of 3% and 2% in 2010 and 2011, respectively. In addition, two previously scheduled 1.5% raises in 2010 would be rescinded, and all pay-for-performance incentives would be canceled for 2009 through 2011. Health insurance benefits would also be affected – changes include instituting a $50 medical premium sharing per month, beginning in January 2011.

Guenzel told commissioners that these steps, which require board approval, would save the county roughly $2.3 million. The cuts are part of a broader effort to deal with a projected $26 million deficit over the next two years. 

By law, these changes don’t affect elected officials, including commissioners, judges, sheriff, county prosecutor, county clerk and water resources commissioner. Nor do they apply to non-union employees with the sheriff’s department, whose salaries are tied to a separate contract within that department.

In response to a question from commissioner Ken Schwartz, Guenzel said the cuts would connect to negotiations with the 17 bargaining units who represent union employees. (More than 80% of the county’s workforce of 1,350 people are represented by unions.) Those negotiations, aimed at modifying existing contracts, are expected to continue through July.

Cuts to Commissioners’ Expenses

Commissioners have been wrangling over ways to cut their own $600,000 annual budget. At their May 20 board meeting, a proposal by commissioner Leah Gunn – which among other things cut all travel and per diem expenses for 2010 and 2011 – was voted down. A counter-proposal by commissioner Kristin Judge called for a 10% cut to the commissioners’ budget, with details to be worked out later. That resolution was tabled at the May 20 meeting.

On Wednesday, commissioner Conan Smith presented yet another proposal, saying he’d talked individually with each commissioner and thought that this solution could be acceptable. The plan calls for cutting several line items for the 2010 budget, including the amount paid to the lobbying firm Governmental Consultant Services, Inc., led by Kirk Profit – a recommendation originally proposed by Gunn.

The biggest change would be to take a “flex account” approach to several line items, essentially grouping those items into a lump sum and allowing commissioners to spend the money as they choose. Items included in the flex account would be per diem, travel, mileage and fringe benefits, such as health insurance. Some commissioners, for example, use the health insurance benefit while others don’t, and not all commissioners use per diem or travel allowances. The amount per commissioner for the flex account is tentatively $9,900. Funds not spent by commissioners at year’s end are returned to the general fund.

Commissioner Jeff Irwin was a dissenting voice in the proposal, saying he thought it was a silly concept and fraught with all kinds of peril, but that the amount of money involved was so small that it wasn’t worth fighting. Commissioner Wes Prater said he found the proposal acceptable for its symbolic value, but he also said rather forcefully that he didn’t believe commissioners were overpaid and he noted that they have not taken pay increases for several years.

In total, the proposed cuts would reduce the commissioners’ budget by about 6%. The biggest line item – their salaries – accounts for $177,387 and by law can’t be adjusted until the beginning of their next term, in 2011.

Economic Development Millage

The administration had put an item on the June 3 agenda asking commissioners to approve an economic development tax of 0.017 mills. The amount would raise $250,000 and be used to fund Ann Arbor SPARK and SPARK East in Ypsilanti. Guenzel said it amounted to an additional $1.70 tax for every $100,000 in a property’s taxable value.

Commissioner Ken Schwartz found a state statute that would allow the county to levy this tax for the purpose of growing jobs and reducing unemployment. Like a millage passed in October for veterans services, this would not require voter approval. However, several commissioners expressed concern about levying any kind of tax, no matter how small, during the current economic climate. Irwin said he felt that they should hold a public hearing on the issue, and Guenzel agreed to take the item off the June 3 agenda and schedule a hearing for July or August. Guenzel said the county has already committed $200,000 to Ann Arbor SPARK and $50,000 to SPARK East in 2010. Currently, that amount would come out of the general fund. The millage was meant to relieve the general fund of that commitment.