Pat Kelly, former Dexter Township supervisor, talks with county commissioner Conan Smith and finance director Kelly Belknap before the March 19, 2014 county board meeting. The board passed a resolution of appreciation for Pat Kelly during the meeting. (Photos by the writer.)

The board also heard from county treasurer Catherine McClary, who reported that foreclosures are decreasing, as are delinquent taxes. Delinquent taxes are a leading economic indicator for both mortgage foreclosures and tax foreclosures, she noted, so the decreases are good news. Commissioners gave initial authorization to the treasurer’s office to borrow up to $30 million against the amount of delinquent property taxes in all of the county’s 80 taxing jurisdictions, an annual process.

Commissioners also authorized the county administrator to hire a contract employee who will support budget-related work this year for the county board and administration. The vote came over dissent from Rolland Sizemore Jr., who felt the work could be absorbed by existing staff.

The budget was also the focus of an update from lobbyist Kirk Profit and his colleague Gary Owen at Lansing-based Governmental Consultant Services Inc., who talked about how action in the state government might impact Washtenaw County. GCSI is the lobbyist for the county and several other local governments, including the city of Ann Arbor. Their updates included the fact that legislation has been introduced to repeal Act 88, which the county uses to levy taxes for economic development and agriculture. This year, the county has budgeted $973,000 in revenues from an Act 88 levy.

In other action, the board appointed former Superior Township supervisor Bill McFarlane to the county road commission board, to fill the seat left vacant by the recent death of long-time road commissioner Fred Veigel. The remainder of that six-year term runs through Dec. 31, 2014.

Commissioners supported McFarlane, but also discussed the possibility of changing the process so that interviews with applicants would be held at a public meeting. Yousef Rabhi (D-District 8), who as board chair makes these nominations, described the process of nominating a new road commissioner as a difficult one, and highlighted the need for a five-member road commission. Currently the road commission board consists of three members. It’s an issue that Rabhi plans to bring up at an April 17 working session.

The board also took a step toward allowing employees to get health insurance coverage for the treatment of autism. Commissioners gave initial approval that would authorize adding an Autism Spectrum Disorder (ASD) rider to existing active employee and retiree benefits.

And a resolution to oppose a mineral mining operation in Lyndon Township drew criticism from Dan Smith (R-District 2), who objected to the county board weighing in on an issue that’s not within its purview. Other commissioners felt the county had a vested interest in formally voicing an opinion, both because of broader economic and environmental impacts that would affect residents, and because the county parks & recreation commission owns property in the township. Smith’s decision to state “present” – rather than casting a yes or no vote – resulted in brief discussion about board rules.

Lyndon Township Mineral Mining

A resolution opposing a mineral mining proposal in Lyndon Township appeared on the March 19 agenda.

The resolution stated that the county board “formally opposes the establishment of the proposed McCoig Materials mining operation in Lyndon Township on the basis of the very serious negative consequences to the surrounding communities.” The company is proposing a sand and gravel mine on 189 acres north of Chelsea on M-52. The rural site is located near several parks and nature areas, including Waterloo State Recreation Area, the Pinckney State Recreation Area, Park Lyndon, the Green Lake Camping area, and the Waterloo-Pinckney Hiking Trail. Over 31,000 acres of protected land is located in that area.

McCoig is asking Lyndon Township for special land use zoning and has submitted an application for a mineral mining operation. Public hearings on the issue have drawn heavy opposition. On its website, the township has noted that its authority is limited:

Michigan State Legislators have greatly reduced township control by passing Act 110 of 2006 (125.3205). Under that law, the township must not “prevent the extraction, by mining, of valuable natural resources from any property unless very serious consequences would result from the extraction of those natural resources. Natural resources are considered valuable for the purposes of this section if a person, by extracting the natural resources, can receive revenue and reasonably expect to operate at a profit.” The township’s authority is limited to “reasonable regulation of hours of operation, blasting hours, noise levels, dust control measures, and traffic that are not preempted by part 632 of the Michigan environmental laws,” 1994 PA 451, MCL 324.63201 to 324.63223.

The county board’s resolution addresses these issues, stating in its “whereas” clauses that “the noise, dust, air pollution, and additional heavy traffic generated by the operation of the mine and the transportation of the minerals will likely have serious negative consequences for the natural environment and wildlife …” [.pdf of full resolution]

The issue was also raised during the March 11, 2014 meeting of the Washtenaw County parks & recreation commission. WCPARC director Bob Tetens subsequently sent a letter to Lyndon Township supervisor Mark Keezer outlining several concerns with the project. [.pdf of Tetens letter] The letter indicates that WCPARC is willing to purchase the property.

Lyndon Township Mineral Mining: Public Commentary

A resident of Lyndon Township spoke during public commentary, saying he’s not anti-mining. “But my mama taught me there’s a right place for everything, and in the heart of the largest state recreation area in the lower Peninsula is not the right place.” He strongly encouraged commissioners to pass the resolution and to do everything in their powers to support the citizenry, “who I can tell you is very strongly against this.”

Larry Murphy, a Scio Township resident, told commissioners that he’s a candidate for the county board. [Murphy, a Republican, has filed to run for the Aug. 5 primary in District 1. The seat is currently held by Democrat Kent Martinez-Kratz, who is running for re-election.] Murphy said he attended the public meeting earlier in the month about this proposal, which was held by the Lyndon Township planning commission. He said he was shocked that about 500 people attended. It’s really a disaster in terms of the environment and the effect on recreation, Murphy said. It’s also a disaster in terms of transportation, because of the trucks that would be going through downtown Chelsea. He encouraged the board to oppose this project. He wanted people to know that opposition to this is bi-partisan. “This mining company, McCoig, has no support, no friends in Washtenaw County,” Murphy concluded.

Lyndon Township Mineral Mining: Board Discussion

Kent Martinez-Kratz (D-District 1) – who represents the county district that includes Lyndon Township – described the situation, noting that the mining would directly affect a county park. Park Lyndon shares a lake with the proposed sand mine, he noted, and the company plans to use water from the lake as part of its mining operation. He pointed to the letter by Bob Tetens, director of the county parks & recreation commission, as giving a good explanation of the objections. Martinez-Kratz also noted that about 700 people had attended two public meetings in the township, overwhelmingly opposed to this proposal. He thought the community would appreciate the county’s opposition.

From left: Yousef Rabhi (D-District 8) and Dan Smith (R-District 2).

Dan Smith (R-District 2) spoke about process and the county board’s role. “It seems that this board simply can’t mind its own business. Here we are, yet again, sticking our nose in someone else’s business.” This is a matter for Lyndon Township to decide what’s best for them, he said. The planning commission is holding public hearings and getting lots of public comment. The planning commission will review that public comment, as well as the advice from their attorneys, and make a decision. The township board will subsequently weigh in as well. If voters are unhappy about that, they have a right of referendum, Smith noted. Residents can circulate petitions and perhaps overturn whatever decision is made. If a lawsuit occurs, it will be the taxpayers of Lyndon Township who’ll be paying for it, he noted.

It’s not the job of the county board to sort out these issues, Smith said. This isn’t under the county’s control, he added, “and I wish you would stop having things in front of us that are not under our purview.” [In general, Smith has consistently objected to resolutions weighing in on issues – usually at the state level – that are outside the purview of the county board.]

Conan Smith (D-District 9) said he appreciated Dan Smith’s position that the township board will be making the decision. But Washtenaw County is a significant landowner in Lyndon Township, he noted, with properties including Park Lyndon and West Lake Preserve. The resolution that the board is considering plainly articulates the impacts on natural resources as being the main driver of the county’s concern, C. Smith said. The township is gathering public opinion, and the county as a landowner has an interest in that land and the possible impacts of the mining facility. “It’s right for us to articulate our concerns,” he said. The resolution doesn’t carry any more weight than other landholders, he said, and he supported it.

Rolland Sizemore Jr. (D-District 5) asked whether the Lyndon Township board supported or opposed the mining proposal. Yousef Rabhi (D-District 8) didn’t think the township board had made a determination – that’s why they’re soliciting public comment. Sizemore wondered what the county board’s resolution would do. Rabhi replied that it expresses the board’s opposition to the mining operation.

Sizemore said Dan Smith had a point about it being the township’s business. But Sizemore noted that he served on the county parks & recreation commission, which has a lot of land there, so he’d support the resolution. [Dan Smith and Conan Smith also serve on the parks & recreation commission.]

Kent Martinez-Kratz (D-District 1) talks with former Dexter Township supervisor Pat Kelly.

Rabhi thanked Martinez-Kratz for advocating on this issue. Rabhi noted that his own personal interest in it stems from his background in environmental studies. He’s heard from people at the University of Michigan that they also have concerns about this project. Rabhi called Tetens’ letter well-stated, outlining many concerns that people share. It’s a community-wide issue, he said, not just isolated to the township. Lyndon Township is within Washtenaw County, and the county has a duty to take a stance on this – because the environment in the county is a countywide asset to all citizens. “We are doing the right thing by passing this resolution in opposition of the mining operations in Lyndon Township,” Rabhi said. It should be a concern for all of Washtenaw County.

Dan Smith countered that if the state wanted the county board to have control over land use, then the legislature could amend the zoning enabling act. In some states, land use is a county matter, he said. If that were the case, then the question of this mining operation would rightfully be before the county board, and it would make the determination.

The proper response, D. Smith continued, is in Tetens’ letter, where Tetens indicated the willingness of the parks & recreation commission to buy the property. It makes perfect sense for natural areas preservation, he said.

Martinez-Kratz thought the state would want the county board to advocate on issues that are important to the county. This issue is important for economic and environmental reasons, he said. It won’t be resolved quickly, and he thought that township officials would look for guidance from the county as well as from the township residents.

Outcome: The resolution passed. Alicia Ping (R-District 3) was absent, and Dan Smith (R-District 2) stated “present.”

Lyndon Township Mineral Mining: The Vote – Coda

Kent Martinez-Kratz asked corporation counsel Curtis Hedger for clarification about how Dan Smith’s vote would be recorded. The board rules state that a commissioner must vote yes or no unless there’s a conflict of interest, but Hedger noted that there’s no mechanism to enforce the rule.

Hedger said he did some research, because Smith had indicated that he would be making the “present” statement. It will be recorded that Smith stated “present,” Hedger said. But because it takes an affirmative vote to approve a resolution, then anything else is considered a “soft no.” Yousef Rabhi recommended making a note next to the vote, indicating that it’s not in keeping with the board rules.

Specifically, the board rules – as adopted unanimously by commissioners at their Jan. 8, 2014 meeting – state:

O.
 VOTING:

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

1.
 Roll
 Call
 Vote:

Roll
 call
 vote
 shall 
be 
taken
 when 
called 
for 
by 
any
 member 
of 
the 
Board, 
and
 on 
board actions 
to 
adopt 
ordinances, 
resolutions
 and 
the
 appointment 
or 
election 
of 
officers.

2.
 Votes 
Required:

Procedural
 and
 other
 questions
 arising 
at
 a
 meeting 
of
 the 
Commissioners,
 except
 for
 those 
decisions
 required
 by 
statute
 or 
by 
these 
rules
(Specifically,
 Rule
 II
 F – Closing
 Debate
 in 
Committees 
and
 Rule
 III 
R – Suspension/
Amendment
 or 
Rescission
 of
 Board
 Rules) 
to 
have 
a 
higher
 majority, 
shall
 be 
decided 
by 
a 
majority 
of 
the 
members 
present.
 A 
majority 
of 
the 
members 
elected 
and 
serving, 
however, shall 
be
 required
 for 
the 
final
 passage 
or 
adoption
 of
 a 
motion,
 resolution 
or
 allowance 
of
 a 
claim.

Ronnie Peterson noted that commissioners are individually elected, and they can choose to vote or not vote. Every commissioner stands by their individual commitments to vote, he said. The resolution passed with majority support, he noted. The board establishes its practices and norms by example, Peterson said. Whatever the board finds acceptable is how it will function, regardless of what the official rules state, he added. “I don’t like that, but we’ve established that in the past.”

Appointments

At the board’s March 19 meeting, Yousef Rabhi (D-District 8) made nominations to six county committees, commissions and boards. [.pdf of application packet] Nominations are made by the board chair, with confirmation of the appointments made by a vote of the full board.

Appointments: Road Commission Board

Yousef Rabhi nominated former Superior Township supervisor Bill McFarlane to the Washtenaw County road commission board, to fill the seat left vacant by the recent death of long-time road commissioner Fred Veigel. The remainder of that six-year term runs through Dec. 31, 2014. Unlike most other county-appointed boards, road commissioners receive annual compensation of $10,500.

Superior Township supervisor Ken Schwartz, a former road commissioner.

McFarlane was among 10 applicants for the position. Others who applied included former county commissioner Rob Turner; Mike Henry, chair of the Ann Arbor Democratic Party; and University Bank CEO Stephen Ranzini.

During the evening’s first opportunity for public commentary, Ken Schwartz – a former county commissioner, former road commissioner and current supervisor of Superior Township – spoke briefly in support of McFarlane’s appointment. He noted that McFarlane was very experienced in local government. McFarlane had served as Superior Township’s supervisor for 22 years and before that worked for the sheriff’s department. “Bill is more than qualified to step in,” Schwartz said. McFarlane has worked with municipal budgets, and understands the difference between primary roads and local roads. He’d be an excellent choice, Schwartz concluded.

Conan Smith (D-District 9) said he was glad that McFarlane would be back working for the county. He described McFarlane as very bright and “super genial,” and as someone who is trusted by the communities that are impacted by decisions of the road commission.

Ronnie Peterson (D-District 6) described McFarlane as a personal friend, and said there was no question about his integrity. He was pleased that McFarlane was willing to serve, and he supported the nomination.

However, Peterson said he was concerned about following proper procedures, and that the board hadn’t always done that. In the past, they’d gotten rid of a 24-year veteran on the road commission, Peterson said, “through a process that was very questionable.” [Peterson didn't mention any names, but was possibly referring to Steve Puuri, who retired as managing director of the road commission in 2011 after nearly 25 years.]

Following the rules and procedures is the only way that people know that something is being done in a fair, consistent way, he said. Peterson questioned why there hadn’t been public interviews of potential candidates to the road commission board.

Peterson also said he hadn’t yet heard about the recommendations regarding the future of the road commission, which a board subcommittee had undertaken. He wanted to have some discussion about that. If the nomination were anyone else besides McFarlane, Peterson said he might not vote for that person, because he didn’t think the process had been fair, clear or consistent.

Conan Smith responded, saying that candidates for the road commission in the past had been interviewed, but that hadn’t happened for at least seven years. The more recent appointments to the road commission hadn’t been made that way, he noted, and perhaps the board should return to its past practice. He said he knew how rough it was for the board chair to have to make the decision.

C. Smith noted that since the current appointment runs only through the end of 2014, there would be a chance soon to implement an interview process when the county board makes an appointment for the term that begins on Jan. 1, 2015. He thought it would be very valuable for the public to have input.

Rolland Sizemore Jr. (D-District 5) said he supported McFarlane. He disagreed with Peterson and C. Smith, saying that citizens elected the county commissioners so that the commissioners would make decisions. It’s the board’s job to make these appointments, he said, not to set up an advisory committee to make recommendations. He thought the board was letting go of its authority, and letting residents decide “when they don’t know a third of the story.”

Andy LaBarre (D-District 7) noted that the road commission would be the topic of an April 17 working session, which he chairs. He suggested continuing discussion of the issue at that time. The working session will also include a report from the subcommittee that is making recommendations on the future of the road commission. [For additional background, see Chronicle coverage: “No Major Change Likely for Road Commission.”]

Rabhi described the process of nominating a new road commissioner as a difficult one. He appreciated the diversity of backgrounds among the applicants. He said he called all 10 applicants for 15-30 minutes or more, to talk about their interests and qualifications. “It was a very hard and stressful process for me.” McFarlane has the qualifications necessary to fill this vacancy, Rabhi said, and he was happy to put his name forward.

Rabhi said it would be great to find a way to engage all the applicants, who are passionate about roads and road funding. Perhaps there’s a way to do that in an ongoing basis, he said.

Yousef Rabhi (D-District 8), chair of the county board.

Noting that this might be extremely controversial, Rabhi then said the county needs a five-member road commission. Currently the road commission board consists of three members. “This process highlighted that need” to expand, he said. With five members, the road commission would have more representation from more backgrounds and more parts of the community. That would result in a more productive dialogue than three commissioners can have, Rabhi said, especially given the restrictions of the state’s Open Meetings Act.

It’s an issue that Rabhi plans to bring up at the April 17 working session.

Rabhi said he’d love to hear about how the public interview process has worked in the past, noting that he wasn’t on the board when those kind of interviews occurred. He’d like to review that process, as long as it’s not taking away the decision-making from the board.

In this case, given the vacancy and the need for a full road commission board, a new commissioner needed to be appointed quickly, Rabhi said. He again stressed that he’d spent a lot of time talking to applicants as well as to fellow county commissioners, to get their input. He hoped the board would support McFarlane.

Sizemore wanted to know when the county board could change the pay of the road commissioners. Corporation counsel Curtis Hedger said it can’t be done during a road commissioner’s current term. It would have to be done and take effect at the beginning of the new term. Sizemore said that if the road commission board is expanded to five members, perhaps the salary should be reduced to $6,000 each. Hedger pointed out that there would be varying salaries for a period, because the terms for the road commissioners are staggered.

Peterson said he didn’t know where the idea of having a citizens advisory committee had come from, and emphasized that the appointments are made by the board. Whatever process is put in place should also be decided by the board, he said.

Outcome: Commissioners unanimously appointed Bill McFarlane to the Washtenaw County road commission.

Later in the meeting, Ronnie Peterson asked whether expanding the road commission to five members would actually mean dissolving the existing road commission and establishing a new one. He asked corporation counsel Curtis Hedger to research that question. He said he wasn’t advocating for it, and joked that he hoped people wouldn’t call him about it.

Yousef Rabhi also suggested that the board might consider designating positions on the road commission board based on specific skills – like community outreach, or technical expertise – so that there’s more diversity of background, especially if the road commission board is expanded to five members. It might even include geographic designations, he said. That might be something else that Hedger could explore.

In general, Rabhi said he wanted to move road commission appointments away from being political and more toward being policy-driven.

Appointments: Other Commissions & Committees

Yousef Rabhi made several other nominations on March 19:

• Accommodations ordinance commission, for a term ending Dec. 31, 2014: Andy LaBarre (D-District 7).
• Agricultural lands preservation advisory committee, for a term ending Dec. 31, 2014: Erica Bloom (environmental/conservation group/natural resources professional).
• Workforce development board, for terms ending Dec. 31, 2016: John Haberthy (private sector) and Matthew Sandstrom (private sector).

In addition, five nominations were made to the Act 88 advisory committee, for terms ending Dec. 31, 2014. Three county commissioners – Conan Smith (D-District 9), Alicia Ping (R-District 3) and Ronnie Peterson (D-District 6) – were appointed, along with citizens Todd Clark and Art Serafinski.

Action on appointing the Act 88 advisory committee had been originally considered at the board’s Feb. 19, 2014 meeting. The item was postponed after Ronnie Peterson (D-District 6) raised concerns over the policy governing the committee’s role. The committee had been created at the board’s Nov. 6, 2013 meeting, as part of a broader policy to help the board allocate revenues levied under Act 88 of 1913. No appointments had been made at that time, however. The county levies the tax to fund economic development and agricultural activities, including Ann Arbor SPARK. [.pdf of March 19 staff memo on Act 88]

Outcome: All appointments were approved by the board.

Staff for Budget Work

Commissioners were asked to give final approval to a proposal to hire a contract position that would support budget-related work for the county board and administration. The item had been originally considered, but postponed, at the board’s meeting on Feb. 5, 2014. It was subsequently given initial approval on March 5, 2014.

County administrator Verna McDaniel.

This process started on Nov. 20, 2013 meeting, when commissioners gave direction to county administrator Verna McDaniel to research and recommend staffing options that would support the board’s community investment priorities. As part of adopting a four-year budget, the board set up a new strategic model to help it determine where the county’s resources should go. The board set goals as well as outcomes that are intended to measure how those goals are being achieved.

The priority areas for investment that were approved by the board in 2013 are: (1) ensure community safety net through health and human services, inclusive of public safety; (2) increase economic opportunity and workforce development; (3) ensure mobility and civic infrastructure for county residents; (4) reduce environmental impact; and (5) ensure internal labor force sustainability and effectiveness.

The dollar amount for this position wasn’t included in the resolution, which stated that “compensation shall not exceed the scope of the Administrator’s authority.” The administrator has discretion to spend up to $50,000 on professional services contracts, and up to $100,000 for any proposed goods, services, new construction or renovation. [.pdf of staff memo and resolution] A four-page job description had been included in the Feb. 5 board packet. The person would report to the county administrator in terms of daily operations. [.pdf of job description] [.pdf of scope of services]

The issue was debated at some length during the board’s Jan. 22, 2014 meeting, when commissioner Ronnie Peterson (D-District 6) questioned the process for hiring this kind of staff support. On Feb. 5, several commissioners expressed concern about spending money on this position and wanted more details about funding and duties, which led to the postponement. There was no discussion about the item on March 5, when it was given initial approval on a 7-1 vote, over dissent from Dan Smith (R-District 2). Rolland Sizemore Jr. (D-District 5) had been absent.

Staff for Budget Work: Board Discussion

On March 19, Ronnie Peterson asked for the item to be pulled out for a separate vote. He said he supported the staff position, but wanted to clarify some things. He joked that the chair, Yousef Rabhi, “took me to the back room, to make sure I did not waver.”

Peterson referred to the following “whereas” clause, highlighting a reference to the board leadership:

WHEREAS, upon approval, the Administrator is directed to work with Board Leadership to contractually engage a qualified professional to assist the BOC to develop strategies and provide oversight for the integration of Board-defined community impacts and outcomes into organizational and departmental programs, policies and budget priorities and;

Peterson said he wasn’t part of the board leadership, and he wanted to know how they perceived the role of this new employee. [The leadership includes board chair Yousef Rabhi; vice chair Alicia Ping; Felicia Brabec, chair of the ways & means committee; and Andy LaBarre, chair of the working sessions.] How would the communication flow from the leadership to the rest of the board? Peterson asked. He noted that the new staff person would be under the supervision of the county administrator, but would report to the board.

Felicia Brabec said that the “whereas” clause relates to hiring the person, and she encouraged all commissioners to be involved in that process. She was open to changing “board leadership” to simply “the board.”

Regarding the flow of information, Brabec said the person would regularly come to board meetings to update commissioners about the work. That way, commissioners would be on the same page when they needed to make decisions for the budget reaffirmation later this year, she said.

Rabhi supported an amendment to strike the phrase “to work with Board Leadership.” But Conan Smith said he thought the board should be involved in the hiring. Peterson agreed, saying the board should be very open about this hiring, and should let other employees know what this person will be doing. The role should be clearly defined, he said. Peterson agreed that the entire board should be involved, not just the leadership.

The proposed amendment changed the “whereas” clause to state [emphasis added]:

WHEREAS, upon approval, the Administrator is directed to work with the Board to contractually engage a qualified professional to assist the BOC to develop strategies and provide oversight for the integration of Board-defined community impacts and outcomes into organizational and departmental programs, policies and budget priorities and;

Outcome on amendment: On a voice vote, commissioners approved the amended “whereas” clause.

Rolland Sizemore Jr. (D-District 5).

Rolland Sizemore Jr. wondered whether in the future he should contact county administrator Verna McDaniel, or the new staff person that would be hired. He was skeptical about the need to hire someone new. “We’ve already got 1,300 employees, but you guys feel we need to hire somebody else to do Verna’s job, and Verna’s job is to tell somebody on her staff to get some work done.”

Sizemore also asked why there were no dollar amounts specified in the resolution for this new hire, or a timeframe for this work. Finally, he asked whether the county would also need to hire someone to implement the recommendations made by the new employee. He didn’t support the hire, saying that the county already had staff who could do this work.

Brabec and McDaniel clarified that the contract would likely be between $50,000 to $75,000, and would not exceed the amount that the county administrator is allowed to spend without board approval – a $100,000 limit. In terms of a timeframe, McDaniel said it would likely be a contract at least through 2014. The board would need to decide whether the work would continue beyond that, she said.

Sizemore noted that not long ago, the county was poised to borrow up to $350 million “because we were in such desperate straits,” but now there’s money to hire someone new. He would not support the resolution. [Sizemore was referring to a bond proposal that had been floated in early 2013 to cover unfunded pension and retiree healthcare obligations. McDaniel had initially said the bond was crucial to the county's financial health, but the proposal was dropped in July of 2013 amid concerns over cost and process, as well as uncertainty related to the state approval process that was required for this type of bonding.]

Outcome: The resolution on hiring a contract employee for budget work passed on a 6-1 vote, over dissent from Rolland Sizemore Jr. Dan Smith was out of the room when the vote was taken, and Alicia Ping was absent.

Autism Coverage

Andy LaBarre (D-District 7) brought forward a resolution from the floor, authorizing the county to provide health insurance coverage for the treatment of autism. The resolution would authorize adding an Autism Spectrum Disorder (ASD) rider to existing active employee and retiree benefits. [.pdf of staff memo and resolution]

Adding the rider would cost the county an estimated $182,589 this year, according to staff – to be paid to Blue Cross Blue Shield of Michigan. To cover that cost, each county department will be charged on a per-employee basis. In addition, the county will pay for claims made by employees for this benefit, with the assumption that most if not all claims would be reimbursed by the state. LaBarre described the amount of claims that the county might be required to pay as a “moving target, but one I think we can meet.” He said the policy is needed for employee recruitment and retention, as well as for the “basic moral argument” that coverage should be provided.

Andy LaBarre (D-District 7).

The board has been discussing this possibility for several months. LaBarre noted that Conan Smith (D-District 9) had brought up the issue last fall, pointing out that the county didn’t provide full mental health parity. That was because of budgetary constraints, LaBarre said.

At its Jan. 22, 2014 meeting, the board received a staff presentation about the possibility of offering such coverage. Colleen Allen, CEO of the Autism Alliance of Michigan, attended that meeting to answer questions and advocate for coverage. The board created a committee to explore the cost to the county for providing employee health insurance coverage for autism. Committee members were LaBarre, Felicia Brabec (D-District 4), and Ronnie Peterson (D-District 6). The committee’s charge was to (1) investigate the cost and sustainability of coverage of autism spectrum disorders; and (2) recommend a policy providing and funding coverage if the state reimbursement fund is exhausted.

The federal Mental Health Parity & Addiction Equity Act of 2008 mandates that any group plan with 50 or more members – like Washtenaw County government – must offer both medical and mental health benefits. Under more recent federal health care reform, there’s been an expansion of benefits, and mental health benefits are considered a mandatory part of basic health care, starting this year. However, autism isn’t included as part of that mental health mandate.

On the state level, in October 2012 a state of Michigan mandate took effect stating that all fully insured plans must provide coverage for the diagnosis and treatment of autism spectrum disorders (ASD). The county is not a fully insured plan, however. Because the county is self-funded, it was exempt from this state mandate.

The costs of treatment are estimated to be about $60,000 a year to cover a child with autism. The state of Michigan has made coverage a priority, and has started setting aside funds to reimburse organizations that provide coverage. In fiscal year 2012-13, $15 million was made available, with an additional $11 million in fiscal 2013-14. Of that, only about $500,000 has been expended on reimbursements. The program is handled by the Michigan Dept. of Insurance and Financial Services.

The state program provides for reimbursement of up to $50,000 per year per child between the ages of 0 to 6, up to $40,000 per year from ages 7-12, and up to $30,000 per year for ages 13-18.

County staff have estimated that offering the coverage would result in up to a 5% increase in medical expenses, or up to $1 million annually. This year, medical expenses are budgeted at about $20 million. The county is expected to be fully reimbursed by the state of Michigan for the amounts that are allowed under the autism program.

The resolution given initial approval on March 19 included two resolved clauses:

NOW THEREFORE BE IT RESOLVED that the Washtenaw County Board of Commissioners authorizes the implementation of the Autism Spectrum Disorder (ADS) rider to existing active and retiree as soon as feasibly possible through Blue Cross/Blue Shield of Michigan, providing mental health and physical health parity.

BE IT FURTHER RESOLVED that Washtenaw County commits to a review of claims paid and/or reimbursed on an annual basis as our individual experience is not yet known. Such review would occur prior to the annual review process with Blue Cross/Blue Shield to determine if such benefit (rider) would be continued in the next year of benefits.

Autism Coverage: Board Discussion

Yousef Rabhi (D-District 8) thanked the committee and staff for their work. He asked Diane Heidt, the county’s human resources and labor relations director, what percentage of costs the county could be expected to bear for this coverage.

Heidt described the annual payment to Blue Cross Blue Shield – of about $182,000 – as a kind of “permission slip” that would allow the county to offer the coverage. That amount will be pre-funded from the county’s medical fund reserves, and it will then be charged out to each county department based on the number of employees in each department – both general fund employees and non-general fund employees.

Employees that take advantage of the coverage would pay if there’s a deductible on their current insurance plan, or if there’s co-insurance, Heidt explained. The majority of employees pay 10% as co-insurance. She reminded the board that the administration is still negotiating with unions that represent about 300 employees at the sheriff’s office, so the benefits for those employees are different at this point.

Felicia Brabec (D-District 4).

The remainder of the claim would be paid by the county, with the expectation that the county would be reimbursed from the state, based on the age of the child that’s receiving treatment. The annual state reimbursement levels are $50,000 through age 6, $40,000 from ages 7-12, and $30,000 from ages 13-18.

Rabhi noted that Lansing is “a very dynamic place,” and he wondered what the impact would be if the state reimbursement program is eliminated. Heidt replied that currently about $25 million is available in the state reimbursement fund. The committee recommends that the county review the benefits and claims annually, to determine if the coverage would continue to be offered in the following year, Heidt said.

Rabhi noted that once the county offers a benefit, it’s hard to take that benefit away. If for some unforeseen reason there’s suddenly no money available from the state, he said, the county would need to evaluate if it’s a benefit that they can continue to pay for. But it’s hard to see the county removing that benefit, he said. Heidt stressed the importance of annually evaluating the county’s expenses, because at this point it’s unclear how many employees will take advantage of the coverage.

Rabhi supported offering coverage, but wanted to make it clear that it wasn’t a guarantee every year. He was concerned about what might happen if state funding disappeared, and what impact that would have on employees as well as on the county budget. He also noted that a lot of the county’s departments that get funding primarily from non-general fund sources are short on cash. What kind of burden will this coverage place on those departments? Heidt replied that of the $182,000 total, about $102,000 of that will be charged to non-general fund departments, based on the number of employees in each of those departments.

But this year, that $182,000 total would be pro-rated based on when the coverage begins, she noted – so that total amount will likely be only about $75,000 this year, since the coverage won’t be started until well into the year.

Rabhi said he wanted to be clear that the families who access this benefit aren’t a burden – that’s not what he meant. He was simply trying to understand the dollars that the county will be spending.

Conan Smith (D-District 9) asked about the $182,589 payment to Blue Cross Blue Shield, noting that it effectively doubles the cost of providing the coverage. He wondered what BCBS was doing with that money. Heidt replied that BCBS is charging that amount in anticipation of the claims that might be made. Based on whatever the county’s actual experience is with autism claims, that annual payment to BCBS might be less in the following year, she said. Smith asked what the dollars are used for within the insurance company. County administrator Verna McDaniel said that the basic understanding is that the money goes into an insurance pool, but beyond that, it’s not clear how it is allocated.

Smith said the issue of autism coverage didn’t arise because there’s state funding available for reimbursement. It came up because of the desire for mental health parity, and because many commissioners thought the county already provided autism coverage and were surprised when that wasn’t the case. Every other mental health issue is covered. Heidt noted that autism is the only mental health issue that doesn’t have coverage mandated by the state. Smith wondered how it’s possible that this relatively minor coverage is costing the equivalent of $15 per employee per month to add to the county’s health care costs. Heidt said it’s probably because there are so many unknowns.

Ronnie Peterson (D-District 6).

Smith asked how the cost of the autism rider compares to other riders that the county has with BCBS. Heidt said it’s been a long time since the county added a new rider, so she didn’t have those costs broken out. Smith replied that he “loved the Blues” and has been covered by that entity his entire life. But he wanted some sort of explanation about how BCBS calculates the autism rider. Heidt said she’d talk to the county’s BCBS agent to get more information.

LaBarre agreed with Rabhi about the county needing to go into this with “our eyes wide open.” The county can leverage state funds now, but it’s not a given in the future. LaBarre noted that some commissioners wonder why this isn’t being done as part of the budget reaffirmation later this year. It’s not without risk in terms of cost, he said, but the merits of doing it as soon as possible make it worth supporting.

Ronnie Peterson (D-District 6) said he hoped the county never takes back the benefits offered to employees. They should figure out how to finance this benefit, regardless of state aid. It’s about making a commitment to employees who have made previous sacrifices, he said.

Dan Smith (R-District 2) said he was happy to move this item forward for an initial vote. But because of the budgetary impacts it has, and the fact that the county is barely three months into a four-year budget, he hoped that it would come back to the board for final approval not on April 2 but rather as part of the board’s budget reaffirmation process later in the year. At that time, they’d have a better handle on the county’s finances for the year and how the county could fund this benefit, he said.

Felicia Brabec (D-District 4) thanked the staff for working on this issue, saying it was important to “right this wrong.” She agreed that it was important to figure out how to pay for the benefit if the state fund is eliminated, but it’s important to move this forward so that families who need this benefit can access it.

Brabec noted that Heidt is working on how families can get coverage for older children, from ages 18-26, who aren’t eligible for reimbursement from the state.

Outcome: Commissioners unanimously gave initial approval to offering autism coverage.

2013 Year-End Financial Update

County administrator Verna McDaniel introduced the year-end financial update by telling commissioners that “I think you’ll be pleased.” [.pdf of financial update]

Tina Gavalier, the county’s finance analyst, delivered the report. She noted that the audit is still in progress so these are preliminary results. It’s unlikely that anything will change drastically, she added.

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

The county had a projected general fund revenue surplus of $2.356 million for the year. Surpluses in several areas contributed to that result, including intergovernmental revenue ($1.3 million, primarily due to payments in state revenue-sharing), fees and service revenue from the county clerk/register of deeds office ($591,000), and the sheriff’s office ($495,000).

On the expenditure side, the county spent $1.564 million less than budgeted. The bulk of that comes from $1.338 million in personnel savings from attrition, position vacancies, and planned reductions. Over $1 million of that was in the sheriff’s office, Gavalier reported, where there are 25 vacancies.

The total year-end surplus for the general fund was $3.92 million. Total revenues were $105.797 million, with total expenses of $101.876 million.

Looking ahead, Gavalier noted that there are several areas to monitor, including child care fund expenditures that are rising due to caseload and placements. [The child care fund is a joint effort between state and county governments to fund programs that serve neglected, abused and delinquent youth in Michigan. Fifty percent of the fund comes from state dollars.]

Other issues to watch that could have a financial impact include fringe benefit projections and trends, personal property tax reform, the possible legislative repeal of Act 88, and state revenue-sharing/county incentive program payments. Regarding Act 88, Gavalier noted that the county has budgeted $973,000 in revenues from an Act 88 levy in 2014, to fund economic development and agricultural-related programs. “So if that’s repealed, there are some decisions that will need to be made,” she said.

Gavalier outlined the next steps for budget-related action that involves the board. The 2014 equalization report will be presented in April, along with a year‐end audit and financial statement. Quarterly budget updates for 2014 will occur in May, August and November. And this fall, the board will make a budget affirmation, with possible amendments to the remaining years of the four-year budget that was adopted in late 2013, for the period from 2014 through 2017.

McDaniel told the board that the county was recently notified that it’s receiving a national Alliance for Innovation award for its four-year budget. [Former Washtenaw County administrator Bob Guenzel previously served on the board of that group, which is based in Phoenix.]

2013 Year-End Financial Update: Board Discussion

Conan Smith (D-District 9) asked Tina Gavalier for more details about the intergovernmental revenue line item. She replied that the surplus of about $1.3 million comes from combining federal, state and local government revenues going into the general fund. Most of that came from a $1.495 million surplus in state revenue-sharing. The county received $9,602,028 in state-revenue sharing in 2013, compared to the budgeted amount of $7,665,098. The $1.495 million surplus in state-revenue sharing was offset by a $238,046 shortfall in local government revenue.

The $1.495 million in state revenue-sharing reflects the first two payments for 2014 that were actually made in October and December of 2013. There will be six payments in total for 2014, including those two, she said, but the payments that were made in 2013 had to be recorded in that year. She described it as a “one-time windfall.”

Kelly Belknap, the county’s finance director, pointed out that the state and county are on different fiscal years. The state’s fiscal year runs from Oct. 1 through Sept. 30. The county uses a calendar year as its fiscal year. That difference resulted in the timing of the payments, she explained, and the way in which they are accounted for in the county’s budget.

Gavalier also noted that the state Dept. of Treasury issued a guidance letter (No. 2013-1) stating that revenue-sharing is no longer based on statewide sales tax revenue, but instead will be a state appropriation.

C. Smith asked that the upcoming steps in the budget schedule reflect a supplemental budget update in the May-June timeframe, to reflect the updated revenue projections that will be coming in the equalization report. The board would be looking to adjust the budget at that time, based on any revenue shortfall or surplus. When Gavalier replied that it would be part of the budget update in August, Smith stressed that it should happen earlier – in May or June.

Outcome: This was not a voting item.

Delinquent Tax Borrowing

In an annual action to help the cash flow of local governments in Washtenaw County, the county board was asked to give initial authorization to county treasurer Catherine McClary to borrow up to $30 million against the amount of delinquent property taxes in all of the county’s 80 taxing jurisdictions. [.pdf of delinquent tax resolution]

Washtenaw County treasurer Catherine McClary.

The estimated amount of delinquent taxes is lower than in recent years, possibly reflecting a recovering economy. Last year, the board authorized borrowing up to $40 million, and the treasurer’s office ended up actually borrowing much less.

After March 1, taxing jurisdictions – including cities, townships, schools systems and libraries, among others – 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. This is a standard procedure that’s conducted annually at this time of year. The borrowed funds are used for cash flow purposes, to fund operations for the first half of the year.

Under the state’s General Property Tax Act, the county treasurer is required to collect delinquent taxes. Section 87 of the act allows the county to set up a revolving fund – which was done several decades ago – so that the county can borrow the estimated amount of delinquent taxes, then pay in advance to all the taxing jurisdictions the amount that they would have collected if there had been no delinquent payments.

Dan Smith (R-District 2) thanked McClary for making this happen, saying this was very helpful to the townships and other municipalities that can get all their taxes upfront and then settle up after properties are foreclosed.

McClary noted that foreclosures are going down, “which is very, very good news.” It also appears that there will be a slight drop in delinquent taxes, she said. Delinquent taxes are a leading economic indicator for both mortgage foreclosures and tax foreclosures, so that’s also good news, McClary said. There’s also been a definitive drop in forfeitures, which is the step immediately preceding a foreclosure.

Last year, the county had authorized the treasurer’s office to borrow up to $40 million, but there ended up being only $21 million in delinquent taxes, McClary said. And only $16 million was borrowed, because there was a small reserve in the county’s tax revolving fund – about $4 million. So a small amount of self-funding is possible, she said, which saves the county money. Approximately 4% of what the treasurer’s office borrows represents either interest or fees. “So any time we can reduce the amount of delinquent tax borrowing, we’re doing a favor for the taxpayers,” McClary said.

She noted that the $4 million in the tax revolving fund is the result of a county board decision. Commissioners could decide to put that money into a capital projects fund or the county’s general fund, she said, but they’ve chosen to keep it as reserves. That helps the county when credit rating agencies make their evaluations, she said. It would help more if there were more money in those reserves, she added.

McClary noted that the county board recently approved a new way to pay off debt incurred from bonding, typically for public works projects in local municipalities. [At its Oct. 2, 2013 meeting, the board authorized the change to allow local units of government to repay bonds early via the county’s delinquent tax revolving fund. The intent is to reduce interest rate payments while posing no financial risk to the county. At the same meeting, the board approved restructuring debt held by Bridgewater Township, which owed $585,000 on $1.095 million in bonds issued in 2004 to fund a sewer system.]

The treasurer’s office agreed to loan Bridgewater Township money to pay off the bonds, with the township repaying the treasurer’s office at a lower interest rate than it was paying for the bond debt, which was averaging 4.1%. The interest rate that is being used to repay the treasurer’s office is slightly above the average weighted yield that the county was getting on its portfolio, McClary reported, “so it’s a very good deal for the county coffers as well.”

McClary also told the board that she’s been working with Evan Pratt, the county’s water resources commissioner. That office has a lot of small bond issues for drain projects, in the range of $200,000 to $400,000. Depending on the size of the issue, they might be spending as much as half of any issue on fees and interest. If the $4 million in the delinquent tax revolving fund could be raised, she said, the county would gain more stability from the credit rating agencies and would be in a position to do more internal loans. She said she hasn’t yet made a formal proposal about that, but that’s where she’s headed.

Outcome: Commissioners gave initial approval to the authorization, with a final vote expected on April 2.

Treasurer’s Report

County treasurer Catherine McClary gave a report on investments in 2013. [.pdf of 2013 treasurer's report] [.pdf of 2012 treasurer's report]

Investment earnings were $637,866 for the year. That compares with $755,681 in 2012. Fees and interest on delinquent taxes totaled $3.72 million in 2013, compared to $5.046 million in 2012. Fees for dog licenses were $62,718 last year, up from $59,748 in 2012. And income from tax searches was $23,052 compared to $31,760 in 2012.

Chart showing three-year historical comparison of Washtenaw County investments.

Total cash and investments reported as of December 2013 was $145.226 million, down from $156.081 million at the end of 2012. The 2012 figure included $4.67 million in funds related to the county accommodations tax, which at that time was administered by the treasurer’s office. In October 2012, the board approved an ordinance change that shifted control over administering and enforcing Washtenaw County’s accommodation tax from the county treasurer to the county finance director.

McClary noted that the average weighted yield of the county’s investments was 0.476% in 2013, compared to the three-month Treasury benchmark of 0.07%.

McClary highlighted three other items during her remarks to the board. The social workers in her office – who work with residents with delinquent taxes – have been certified by the state Dept. of Human Services to do intakes for residents in a range of programs, including Medicaid and food stamps. Her office is also participating in the Step Forward Michigan program, which uses federal mortgage prevention funds to also prevent tax foreclosure. It’s the only state in the country to do that, she said.

Finally, McClary reported that property assessments are increasing. She told commissioners that she had prepared a brochure for residents about how to appeal their assessments.

Resolution of Appreciation for Pat Kelly

The March 19 agenda included a resolution of appreciation for former Dexter Township supervisor Pat Kelly. [.pdf of resolution]

Pat Kelly, former Dexter Township supervisor.

Board chair Yousef Rabhi (D-District8) began by wishing Kelly a happy birthday.

Rabhi noted that Kelly had stepped down from her role as Dexter Township supervisor, after serving in that role for 12 years. He said he had served on many boards and committees with her, and knows that she’s someone who cares about all residents of Washtenaw County. He read aloud the resolution, which highlighted Kelly’s work on the Washtenaw Area Transportation Study, the Washtenaw County Transit Master Plan, Washtenaw County Police Services Steering Committee, and several other public entities.

The resolution also noted that Kelly “led Dexter Township’s response to a devastating tornado in 2012 and worked tirelessly and diligently to establish communication channels with affected residents, safely coordinate volunteer efforts to aid in the massive clean-up, and, with significant and important assistance from the County and Road Commission, supported and led township efforts to remove debris and fallen trees from private property at little or no cost to residents…”

Kelly was visibly emotional when she responded, saying she was touched by the recognition. Almost two years ago, she said, she’d stood at the same podium and thanked commissioners for helping her community after the 2012 tornado. “It’s been a good partnership,” she said.

Conan Smith (D-District 9) praised Kelly’s negotiating skills in representing her township as well as the entire county. When he first was elected, Smith said, the tension between the county and townships over police service contracts, provided through the sheriff’s office, seemed insurmountable. “It seemed like we were going to be at war for a generation,” he said. At one of his most frustrating moments during his first term, Smith recalled, Kelly called him and “very gently explained the interests that your colleagues in the townships had and concerns in a way that just opened my eyes to the possibility of a real partnership.” The county could not have reached a resolution without Kelly’s leadership on that issue, he said. “You’ve been a calming force in huge turmoil, and a passionate deliverer of messages without creating conflict in that process.”

Smith said he knew the county would find some way to keep her deeply engaged with policy work and community leadership.

Outcome: The board unanimously passed a resolution of appreciation for Pat Kelly.

Report from Lansing Lobbyist

Lobbyist Kirk Profit and his colleague Gary Owen at Lansing-based Governmental Consultant Services Inc. gave a presentation to the board about action in the state government that might impact Washtenaw County. GCSI is the lobbyist for the county and several other local governments, including the city of Ann Arbor.

The state budget is actually in good shape, Profit said, with about $52 billion in expenditures and a surplus of about $970 million. He commended the state legislators who represent districts in Washtenaw County, saying that they represent the local interests very well, even though they’re in the minority, as Democrats. He said it was great to have the state Senate majority leader representing part of Washtenaw County as well. [Sen. Randy Richardville, a Republican, represents District 17, which includes six southern and central townships in the county, and the city of Saline.]

Kirk Profit, a paid state lobbyist for Washtenaw County, and commissioner Felicia Brabec (D-District 4).

Revenue sharing is moving in the right direction, Profit said. This year the county will get about $5.5 million, and he expected the county would get about $6.9 million in 2015. The state doesn’t have a good track record in terms of the county’s ability to count on state revenue-sharing, he said. It’s good to understand that going forward.

He noted that the personal property tax referendum will be on the ballot in August of 2014. [The tax is being phased out starting in 2014 through 2022. As part of that change, a statewide voter referendum is slated for Aug. 5, 2014 to ask voters to authorize replacement funds from other state revenue sources.]

Eliminating the PPT removes about $576 million statewide, which primarily are revenues that fund local municipalities. The voter referendum would authorize a use tax to be collected by a new Michigan Metropolitan Areas Metropolitan Authority, which would distribute the funding by statute.

Profit noted that TIF (tax increment finance) capture is “hot” in Lansing right now. State Rep. Eileen Kowall has drafted legislation that addresses several issues related to TIF, including the ability to opt out, resetting the base for TIF capture, and sunset clauses. “It’s going to receive a lot of attention and a lot of dialogue,” Profit said, but it wasn’t clear whether it will pass.

While noting that the state budget is in great shape, Profit said there are also some areas that have holes, including health care funding, education and roads. Some legislators would prefer to give the entire surplus back to taxpayers as refunds, he noted. Profit said he wasn’t sure how these issues will be resolved, but the legislature will be addressing these matters over the next 60-90 days.

The legislature recently approved about $215 million in supplemental funding for roads, which will bring about $1 million to Washtenaw County, Profit said. The city of Ann Arbor will get about $450,000. Other cities and villages will get much less, he said. Profit praised Gov. Rick Snyder, saying that Snyder is “right there on roads” and had demanded that the legislature produce funding for roads.

The southeast Michigan regional transit authority (RTA), which includes Washtenaw County, received close to $2 million for operating expenses to fund it until an anticipated millage vote in 2016, Profit said.

Profit told the board that Act 88 is under some attack, with legislation introduced that would repeal it. [The county’s position is that it is authorized to collect up to 0.5 mills under Act 88 without seeking voter approval. That’s because the state legislation that enables the county to levy this type of tax was enacted in 1913, which predates the state’s Headlee Amendment. The county currently levies 0.07 mills under Act 88.]

Profit said that GCSI’s Gary Owen was working aggressively to make sure legislators understand the significance of Act 88 funding for Washtenaw County. Profit said the target of the repeal legislation is Gratiot County.

The state’s supplemental budget included $750,000 for indigent defense, and Profit credited Washtenaw County public defender Lloyd Powell for successfully advocating for that funding.

Collective bargaining continues to draw a lot of attention in Lansing, Profit said. He also noted that GCSI is working with judge Donald Shelton and Dan Dwyer, court administrator of the Washtenaw Trial Court, on implementing e-filing statewide.

Breastfeeding in public is another issue that GCSI is following, Profit said. He noted that state Sen. Rebekah Warren introduced legislation that was passed in the Senate to guarantee a woman’s right to breastfeed in public places.

Profit also mentioned interest at the state level regarding the Freedom of Information Act and Open Meetings Act. Pending legislation “would dramatically limit your ability recoup costs that you might incur for FOIA responses, and also perhaps to dramatically limit your ability to have certain protected conversations from open meetings requirements.” Profit said GCSI would work closely with corporation counsel Curtis Hedger on that.

Corporation counsel Curtis Hedger and Felicia Brabec (D-District 4).

Profit highlighted an increase in state arts funding from $2 million to $10 million, which translates into about $590,000 coming to Washtenaw County for a variety of arts organizations.

Gary Owen of GCSI said he’d been working with Evan Pratt, the county’s water resources commissioner, regarding action at the Michigan Dept. of Environmental Quality (MDEQ) that will affect the Pall-Gelman 1,4 dioxane cleanup in Washtenaw County. The MDEQ is updating its cleanup standards, and Mike Gebhard has been participating in that process and is on the MDEQ’s toxicity committee. Gebhard is a former environmental analyst/hydrogeologist with Washtenaw County who now works for the county’s information technology department.

The MDEQ will make a recommendation to the state’s Office of Regulatory Reinvention in July, which will include the new standards, Owen said, but those recommendations will be known before then. “It will most likely be a drastic difference than what it is today, but the process will determine that,” he said.

Regarding the Michigan Dept. of Natural Resources trust fund, Owen cited the county’s success in getting grants in the past few years. He credited Bob Tetens, director of the Washtenaw County parks & recreation commission, with that success, which Owen said is probably unparalleled across the state. Owen cited several grants, including $300,000 for the Rutherford Pool in Ypsilanti, $300,000 for the Ann Arbor skatepark, and over $1 million for the acquisition of 54 acres near Domino’s Farms.

Regarding the possible repeal of Act 88, Owen said GCSI is working to make sure that Washtenaw County’s interests are addressed.

Report from Lansing Lobbyist: Board Discussion

Dan Smith (R-District 2) said the comments regarding Act 88 are “misplaced.” It’s not about what the money is spent on in Washtenaw County, he said. “It’s about how the money is collected, and what the law says that money can be spent on.” In his opinion, Smith said, the Washtenaw County board hasn’t done its proper due diligence, “despite my repeated requests.”

Regarding roads, D. Smith noted that legislation has been introduced to repeal the sunset clause on the ability of a county board of commissioners to absorb the duties and responsibilities of a road commission. He asked for a prognosis of that bill. Kirk Profit replied that the outcome is hard to read. GCSI will continue to watch it, but Profit didn’t think legislators had made up their mind yet.

Conan Smith (D-District 9).

D. Smith noted that a subcommittee of the board had recently finished a process regarding what the county would do, but the recommendation hadn’t yet been brought forward to the full board. A working session on that is scheduled for April 17. But Smith’s take on the bill is that it would provide the board with a lot of tools, while forcing the board to dramatically alter things right now. It would be productive to have a longer time to discuss how to best manage this critical transportation infrastructure, he said, noting that it’s not something that can quickly be decided. People are very resistant to change, Smith said, and need more time to work on it. He hoped the legislature would repeal the sunset clause.

Conan Smith (D-District 9) agreed with Dan Smith on the road commission issue. Removing the sunset wouldn’t mean that the county would get rid of the road commission, he said. Statewide, not many counties have taken advantage of the current ability to do that. But he hoped that option would be made available for a longer period.

Regarding Act 88, C. Smith said he had a different perspective from Dan Smith. But he thought they might agree on the fact that Act 88 is just one response that the county has to a “broken municipal finance system.” The state took millions of dollars of state revenue-sharing away from the county over the past several years. If that hadn’t happened, he said, perhaps the county wouldn’t be scraping to find other revenue sources.

C. Smith said he understood why some people want to repeal Act 88, but they should be beating the bigger drum of fixing the system. Lots of cities are on the cusp of financial insolvency, he noted, so he’d advocate not to mess with Act 88 until this bigger problem is fixed.

Yousef Rabhi (D-District 8) echoed C. Smith’s sentiments on Act 88. The county needs tools to address the needs of citizens, Rabhi said, “and right now the state is just tying our hands.” Personal property tax repeal is another example, he said. Rabhi said that Act 88 funding works and benefits the community, and he didn’t think legislators understood that.

Urban County Plan Public Hearing

The March 19 meeting included a public hearing to give input for the Washtenaw Urban County 2014-15 action plan. The hearing was set to solicit feedback about proposed projects and programs that the county intends to implement with federal funding – through community development block grant (CDBG), HOME and emergency shelter grant programs – from July 1, 2014 through June 30, 2015. [.pdf of action plan]

Computer screen: Notes being taken by Brett Lenart of the county’s office of community & economic development during a public hearing on the Urban County action plan.

The Urban County is a consortium of Washtenaw County and 18 local municipalities that receive federal funding for low-income neighborhoods. Members include the cities of Ann Arbor, Ypsilanti and Saline, and 15 townships. “Urban County” is a designation of the U.S. Dept. of Housing and Urban Development (HUD), identifying a county with more than 200,000 people. With that designation, individual governments within the Urban County can become members, entitling them to an allotment of funding through a variety of HUD programs. The Urban County is supported by the staff of Washtenaw County’s office of community & economic development (OCED).

Two HUD programs – the Community Development Block Grant and HOME Investment Partnership – are the primary funding sources for Urban County projects.

One person – Thomas Partridge – spoke during the public hearing. He said the Urban County organization is isolated, like many county organizations. Meetings are held at locations outside of Ann Arbor and aren’t televised on the Community Television Network, he said. The body should be very prominent, Partridge said, because it gets funding for affordable housing. But that funding is under attack, he noted, and more financing from the private sector is needed. Homelessness can’t be eliminated without more attention to this issue.

Thompson Block Brownfield Public Hearing

The board agenda included a resolution to set a public hearing for input on the brownfield development plan of the Thompson Block redevelopment in Ypsilanti. The street addresses for the block are 400-408 N. River St. and 107 E. Cross St. The hearing will be held at the county boardroom in downtown Ann Arbor, 220 N. Main, during the April 2 meeting, which begins at 6:30 p.m. [.pdf of staff memo]

Outcome: Commissioners voted to set the public hearing, over dissent from Dan Smith (R-District 2).

Communications & Commentary

During the March 19 meeting there were multiple opportunities for communications from the administration and commissioners, as well as public commentary. In addition to issues reported earlier in this article, here are some other highlights.

Communications & Commentary: Regional Transit Authority

Jim Casha spoke about the southeast Michigan regional transit authority (RTA). He lives in Canada, and noted that Ann Arbor reminds him of Canada – “except for the roads.”

He’d attended the recent Michigan senate transportation committee hearings in Lansing, and listened to the RTA board chair, Paul Hillegonds, ask for more money for that organization. He also attended the transportation appropriations committee meeting and heard Amtrak’s presentation about service between Chicago and Detroit, through Ann Arbor.

From left: Jim Casha and county commissioner Ronnie Peterson.

Casha said he’s still confused about why the RTA board isn’t making a fight for the 163-acre state fairgrounds. He’d just attended the RTA board meeting, and he thought that RTA board members are confused as well. One of the big supporters of the state legislation that created the RTA, state Sen. John Pappageorge, is a “military guy,” Casha said. “He understands that it’s always cheaper to hold what you have than to retake what you’ve lost – and there’s no reason to give up the fairgrounds.” Even if the fairgrounds turns out not to be a great property to own, though Casha said he thought it was, there’s no reason to give it up now. “We should retain it and evaluate it,” he said.

The situation is rather perilous, Casha said. He reported that Hillegonds had been surprised by the lack of knowledge that state legislators had regarding the RTA. Casha found that the same thing was true with the state fairgrounds. They pass legislation in Lansing, but then don’t keep up with its impact, he said.

Casha asked commissioners to talk with the state legislators and with Washtenaw County’s representatives on the RTA board to keep people informed about what’s happening. [The two RTA representatives from Washtenaw County, who were appointed by the county board, are Liz Gerber and Alma Wheeler Smith, the mother of county commissioner Conan Smith.] Legislators are making some serious mistakes that could seriously impact the ability to have a regional transportation system, Casha said.

Later in the meeting Casha spoke again. At the recent transportation appropriations committee meeting, the RTA presented documentation showing that state legislation allows for the RTA to generate revenue from the sale, exchange, mortgage, lease or other disposition of property acquired by the authority, he said. So his question was: Why doesn’t the RTA take advantage of it? One reason is that the RTA has been misled by people in the governor’s office, Casha contended. There was misinformation, he said, and the state fairgrounds was transferred to private individuals. “It’s definitely not a done deal yet,” Casha said. There are ways out of any legal contract, he added.

Casha noted that the Michigan Land Bank has a new director, “and maybe she has a different opinion of what the land bank’s done so far with this land.” The state owes it to the people in the four-county RTA district to look after their interests in this matter.

Communications & Commentary: Roads in Manchester

Allison Tucker of Manchester, who had spoken to the board at its Feb. 19, 2014 meeting about the GED (general education diploma), began by reporting that the Washtenaw Community College’s adult transitions program recently secured $3,000 in funding. It reinstated her faith that one person can make a difference. But she was there that night to talk about the condition of roads in Manchester. She had hoped to address commissioner Alicia Ping (R-District 3), whose district includes Manchester, but noted that Ping was absent. There are a lot of potholes, and many of them are deep, Tucker said. The situation could kill someone, she said. For smaller communities, it’s difficult to have funding for plowing and salting the roads, she noted. Tucker hoped that the county could help, so that someone like her who travels to class wouldn’t face that problem.

Communications & Commentary: Thomas Partridge

Thomas Partridge addressed the board during both opportunities for public commentary. He urged commissioners to come up with a fundamentally sustainable agenda for county government, with top priorities of eliminating homelessness, funding affordable housing and countywide public transportation, and supporting human rights. He said Washtenaw County has a programmed way of doing business that leaves out a substantial number of residents in making decisions about these issues.

Present: Felicia Brabec, Andy LaBarre, Kent Martinez-Kratz, Ronnie Peterson, Yousef Rabhi, Rolland Sizemore Jr., Conan Smith, Dan Smith.

Absent: Alicia Ping

Next regular board meeting: Wednesday, April 2, 2014 at 6:30 p.m. at the county administration building, 220 N. Main St. in Ann Arbor. The ways & means committee meets first, followed immediately by the regular board meeting. [Check Chronicle event listings to confirm date.] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public commentary is held at the beginning of each meeting, and no advance sign-up is required.

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Adding the rider would cost the county an estimated $182,589 this year, according to staff – to be paid to Blue Cross Blue Shield of Michigan. To cover that cost, each county department will be charged on a per-employee basis. In addition, the county will pay for claims made by employees for this benefit, with the assumption that most if not all claims would be reimbursed by the state.

The board has been discussing this possibility for several months. At its Jan. 22, 2014 meeting, the board received a staff presentation about the possibility of offering such coverage. Colleen Allen, CEO of the Autism Alliance of Michigan, attended that meeting to answer questions and advocate for coverage. The board created a committee to explore the cost to the county for providing employee health insurance coverage for autism. Committee members were Felicia Brabec (D-District 4), Andy LaBarre (D-District 7) and Ronnie Peterson (D-District 6). The committee’s charge was to (1) investigate the cost and sustainability of coverage of autism spectrum disorders; and (2) recommend a policy providing and funding coverage if the state reimbursement fund is exhausted.

The federal Mental Health Parity & Addiction Equity Act of 2008 mandates that any group plan with 50 or more members – like Washtenaw County government – must offer both medical and mental health benefits. Under more recent federal health care reform, there’s been an expansion of benefits, and mental health benefits are considered a mandatory part of basic health care, starting this year. However, autism isn’t included as part of that mental health mandate.

On the state level, in October 2012 a state of Michigan mandate took effect stating that all fully insured plans must provide coverage for the diagnosis and treatment of autism spectrum disorders (ASD). The county is not a fully insured plan, however. Because the county is self-funded, it was exempt from this state mandate.

The costs of treatment are estimated to be about $60,000 a year to cover a child with autism. The state of Michigan has made coverage a priority, and has started setting aside funds to reimburse organizations that provide coverage. In fiscal year 2012-13, $15 million was made available, with an additional $11  million in fiscal 2013-14. Of that, only about $500,000 has been expended on reimbursements. The program is handled by the Michigan Dept. of Insurance and Financial Services.

The state program provides for reimbursement of up to $50,000 per year per child between the ages of 0 to 6, up to $40,000 per year from ages 7-12, and up to $30,000 per year for ages 13-18.

County staff have estimated that offering the coverage would result in up to a 5% increase in medical expenses, or up to $1 million annually. This year, medical expenses are budgeted at about $20 million. The county is expected to be fully reimbursed by the state of Michigan for the amounts that are allowed under the autism program.

The resolution given initial approval on March 19 included two resolved clauses:

NOW THEREFORE BE IT RESOLVED that the Washtenaw County Board of Commissioners authorizes the implementation of the Autism Spectrum Disorder (ADS) rider to existing active and retiree as soon as feasibly possible through Blue Cross/Blue Shield of Michigan, providing mental health and physical health parity.

BE IT FURTHER RESOLVED that Washtenaw County commits to a review of claims paid and/or reimbursed on an annual basis as our individual experience is not yet known. Such review would occur prior to the annual review process with Blue Cross/Blue Shield to determine if such benefit (rider) would be continued in the next year of benefits.

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

AATA board members met in a workroom at AATA headquarters for their July 16 special meeting. Clockwise around the table starting at the far left: Anya Dale, David Nacht (obscured behind Dale), Jesse Bernstein, CEO Michael Ford, Sue Gott and Eli Cooper. (Photos by the writer.)

However, the longest and most vigorous discussion took place on an item not actually on the published agenda: compliance by the AATA with Michigan’s Public Act 152, signed into law in September 2011, which limits employer health care contributions to a fixed dollar amount. At their July 16 meeting, board members took no further action on the issue, letting the vote taken at their previous meeting on June 21, 2012 stand – for now. An additional special meeting might be called sometime in the next week.

The board’s discussion of new information, obtained from the Michigan attorney general’s office, as well as additional analysis of Act 152, suggested a kind of vindication for the position of two dissenters – Charles Griffith and Roger Kerson – in the board’s June 21 action.

That action had been to limit the AATA’s contributions to no more than 80% of the non-union employee health care cost. Adopting the 80% limit is another way for a public entity to comply with Act 152. And the board had voted on June 21 to do that for its non-union employees – because open enrollment was fast approaching for those employees.

As part of that compliance decision, AATA put together a new health care option, which would allow its non-union employees to choose a health care option that would cost them the same as before – but increase their co-pays. And by the time of the July 16 meeting, employees were participating in the open enrollment process, using the boardroom for that activity.

So the board met in a smaller workroom to handle its business for the July 16 special meeting.

That business included a $60,000 increase in the contract with Steer Davies Gleave, the international consulting firm the AATA hired to assist with the development of its transit master plan. The work has included identifying new service options and financial analysis for AATA’s initiative to expand its governance and service area countywide. With this and other previous increases, the value of the contract now totals $780,622, from a deal first signed in April 2010 for just under $400,000. Some of the additional $60,000 will essentially be passed through to a local consulting firm, Carlisle Wortman Associates.

In other business, the board struck a task-order style deal for marketing and advertising with Quack! Media and Pace & Partners Inc. – a three-year arrangement that could be extended for another two years. The $500,000 total authorized by the board works out to $100,000 a year.

The board also authorized an increase in the contract it has with Blue Cab to provide its NightRide service, which operates after the hours when fixed-route service stops running. The increase is from $28 to $32 per service hour for a contract that extends through 2013. Of the $4 increase, $3 is attributed to the AATA’s relatively new living wage policy.

In a final piece of business, the board authorized a $104,000 contract with RBV Contracting to relocate a fire hydrant as part of AATA’s bus garage expansion project.

Compliance with Michigan’s Public Act 152

The board discussed at length an action it had taken at its previous meeting on June 21, 2012 in order to comply with Michigan’s Public Act 152, which was signed into law last year. The board did not take any action on the issue at its July 16 meeting, but left open the possibility of calling a special meeting before July 23, when the “drop dead” date falls for health care open enrollment for AATA’s non-union employees. The health care plan year begins Aug. 1.

Public Act 152: Background

Public Act 152 limits the amount that a public employer like the AATA can make to its employees’ medical benefits plans – $5,500 for single-person coverage, $11,000 for two-person coverage, and $15,000 for family coverage. However, the act provides another option, under which a public employer can choose through a vote of its governing body (in this case, the AATA board) to not apply the hard dollar cap. Instead, the employer can limit its contribution to 80% of the medical benefit, leaving the employee to cover the remaining 20%. It’s this 80/20 option that the AATA board had exercised in its June 21 vote.

The board’s special meeting on July 16 was held in AATA headquarters at 2700 S. Industrial Highway, instead of the usual location at the downtown Ann Arbor District Library. But it was not held in the dedicated boardroom – because that space was being used for open enrollment in the health care plan.

As part of its compliance with the 80/20 provision, AATA had put together health plan options for non-union employees that would essentially make their health care costs roughly the same as current costs – if they choose to opt for higher co-pays.

Two board members dissented on the June 21 vote: Charles Griffith and Roger Kerson. Neither was able to attend the July 16 meeting. David Nacht, who had not attended the June 21 meeting, was present on July 16.

That led to deliberations that covered much of the same ground as the June 21 discussion. However, a couple of new points are worth highlighting, which were made plainer to the AATA by a letter the Michigan attorney general’s office sent to the U.S. Dept. of Labor. The letter pointed to two specific ways that transit agencies could comply with Act 152, without limiting contributions to employee health care. [.pdf of May 29, 2012 letter] First, a transit agency could vote under Section 8 of Act 152 to exempt itself from compliance. Based on the AATA board member deliberations on June 21, their understanding was that they could not, as appointed officials, exercise that option.

The Michigan attorney general’s letter also points to Section 9 as a way to comply. Section 9 of Act 152 provides an explicit penalty for non-compliance, suggesting that the law in some sense does not apply to transit agencies – because the penalties involve taking back 10% of state funds that such agencies don’t receive anyway. Those funds include the state’s current version of state-shared revenue, as well as school aid funds – which the AATA does not receive. From Act 152:

15.569 Noncompliance by public employer; penalty.
Sec. 9.
If a public employer fails to comply with this act, the public employer shall permit the state treasurer to reduce by 10% each economic vitality incentive program payment received under 2011 PA 63 and the department of education shall assess the public employer a penalty equal to 10% of each payment of any funds for which the public employer qualifies under the state school aid act of 1979, 1979 PA 94, MCL 388.1601 to 388.1772, during the period that the public employer fails to comply with this act. [.pdf of full text of Act 152]

Why was the Michigan attorney general’s office communicating with the U.S. Department of Labor? It’s because Title 49 of United States Code 4333 5333 on labor standards set out conditions for receipt of financial assistance from a range of federal programs – and among those conditions are protection of employment conditions that derive from collective bargaining rights. Based on the Michigan attorney general’s letter, the U.S. Dept. of Labor has found the use of Section 8 or Section 9 by Michigan transit agencies an acceptable way to continue to meet its USC 5333 obligations. From USC 5333(b):

(b) Employee Protective Arrangements.—
(1) As a condition of financial assistance under sections 5307–5312, 5316, 5318, 5323 (a)(1), 5323 (b), 5323 (d), 5328, 5337, and 5338 (b) of this title, the interests of employees affected by the assistance shall be protected under arrangements the Secretary of Labor concludes are fair and equitable. …
(2) Arrangements under this subsection shall include provisions that may be necessary for—
(A) the preservation of rights, privileges, and benefits (including continuation of pension rights and benefits) under existing collective bargaining agreements or otherwise;
(B) the continuation of collective bargaining rights;
(C) the protection of individual employees against a worsening of their positions related to employment;
(D) assurances of employment to employees of acquired public transportation systems;
(E) assurances of priority of reemployment of employees whose employment is ended or who are laid off; and
(F) paid training or retraining programs.

Public Act 152: Board Deliberations

Board chair Jesse Bernstein began by posing a question about the employee health insurance benefits, which David Nacht translated roughly as follows: If the board doesn’t rescind its June 21 motion today, and takes action later to rescind, would that “screw up” what’s happening right now in open enrollment? In response to Nacht, Ed Robertson, AATA’s human resources manager, told him: “I’m afraid I don’t know the answer to that question.”

Board member David Nacht deliberates at the July 16, 2012 meeting.

Robertson clarified that the new health plan, about which AATA’s non-union employees are currently making choices, starts Aug. 1. [AATA's union employees are not immediately affected, as their contract goes through the end of the year; however, they participate in the same health care plan as non-union employees.]

Robertson indicated that his uncertainty was based on the fact that he’s not sure what information has already been transmitted to the AATA’s health insurance carrier. He stressed he was not saying the plan couldn’t be revised. Bernstein confirmed with Robertson that employees are making their decisions on health care coverage, based on the motion the board passed on June 21. Bernstein ventured that the board needs to find a way to “back out of it.”

Nacht, who is an attorney but does not provide legal counsel to the AATA, responded by saying the first thing the AATA must do is make sure it follows the law. As he understood the draft resolution that the board had been presented that day, there’s at least an oral opinion from the U.S. Dept. of Labor that Michigan’s Act 152 violates federal law with regard to the AATA’s labor union. However, Nacht continued, the AATA might still have a legal obligation under the state law to follow it with respect to the AATA’s non-union employees. Nacht said he understood that there’s an attorney general opinion, which has some relevance – because Michigan attorney general opinions are treated as legally binding in the absence of a court opinion.

But the bottom line is, said Nacht, that “we need our lawyer to tell us what to do.” The board risks breaking a law, if the board says it doesn’t have to follow a state law. So he concluded that the board should get legal advice, before passing a resolution saying that the AATA isn’t going to follow a state law.

Michael Ford, the AATA’s chief executive officer, commented that other transit agencies in Michigan are doing this “right now as we speak.” Robertson confirmed Ford’s statement, saying that’s what the AATA had been told by the U.S. Dept. of Labor. Bernstein indicated that he felt the board needs to find out how to back out of the board’s previous vote for non-union administrative staff, so that on Aug. 1 they can continue with the health plan they have now, if they choose to do that.

Nacht responded to Bernstein by saying if the state passed a law saying the AATA should follow it, he was not sure why the AATA should back out of it. Bernstein indicated his understanding was that there were certain criteria – based on the receipt of certain kinds of money from the state. The AATA does not receive that kind of money from the state, he said. If the law doesn’t cover the AATA, he continued, he didn’t know why the AATA would put its non-union employees through this procedure.

Ford asked Chris White, AATA’s manager of service development, to explain further, building on Bernstein’s comments. White said that Act 152 contains an opt-out provision for cities [Section 8] – which allows a governing body to take a 2/3 vote to opt out of following the law. [It's not clear why AATA believes Section 8 could not also apply to a transit agency.] For non-cities, White continued, there is a separate clause [Section 9], which he summarized as saying that are no penalties for not following the law. The legislature had given “an out” for both cities and non-cities in Act 152, White concluded.

Nacht ventured that the board has both a legal issue and a policy issue. The policy issue, he said, is complicated. He said it’s not something that he’d be prepared to say how he feels, because he hasn’t seen a memo analyzing it. It’d be possible to say, for example, Nacht said, that we have to comply with this law, but we’re concerned about regressive impacts on employees, and want to have some budgetary compensation for employees – but at the same time we want our organization to do what most public entities are doing.

Otherwise put, the AATA’s position might be that it doesn’t want employees to take a hit, because the agency is concerned about its people, Nacht said. But in the spirit of the legislature’s action, as much as the AATA cares about its people, the board also has a fiduciary responsibility to taxpayer dollars. The board needs to discuss its obligations under both law and policy, before it does anything, Nacht said: “We need to have a conversation about that.”

Bernstein ventured that the board did have a conversation about that at its last meeting [which Nacht did not attend]. Bernstein told Nacht that the consensus was that the board did not want to negatively impact “any employee” based on Act 152. He felt the sentiment on the board was fairly clear.

Eli Cooper picked up on Bernstein’s phrase “any employee” and noted that he felt the consensus was more about “employees as a class,” and the board had looked to the staff to recommend something that was equitable to the employees as a group. He agreed with Nacht that it’s a legal and a policy issue. Cooper conveyed some dissatisfaction with the fact that the draft resolution had been presented “as we walk into a meeting without an opportunity to review any background.” The issue was not “ripe for decision making,” he ventured.

He did appreciate the urgency of the matter, Cooper said. If the board can collect more information in the next day or two, there are still more calendar days when an emergency meeting of the board could be called – if the legal opinions and the policy analysis is such that the board is compelled to take action.

Ford responded to Cooper’s comment about the late introduction of the issue, saying he took responsibility for it. The AATA had just received the information, and he felt it was important for the board to be aware of it. He noted that the board had given staff direction at its last meeting to follow up on the issue. Ford said there’d not yet been an opportunity to follow up with legal counsel.

Nacht then apologized for not attending the last meeting, but noted that he’d read the minutes. From the minutes, he didn’t get the sense of the kind of consensus on the board that Bernstein had articulated. What he’d see in the minutes, Nacht said, was a divided vote. And he guessed that the additional information has been resolved “in favor of the dissenters.” Bernstein stressed to Nacht that “none of us were thrilled with this from a legal or a policy position.” The board was looking for a way – if the AATA had to comply with the law – to be fair to employees. It’s coming up at a bad time, he said, because of the tight deadline.

Bernstein asked for clarification from Karen Wheeler, Ford’s executive assistant, about what the rules are on voting if people are not present. [Bernstein was anticipating the possibility of convening a special meeting, and having some people participate by telephone or by sending a proxy.] Wheeler’s answer: “You cannot do it.” Bernstein confirmed that a person had to be present to vote, and could not vote by phone or with a proxy.

Nacht asked why the board could not deal with it as a financial matter. For now, he suggested, the AATA complies with the law until its lawyer gives a different opinion. If the board’s lawyer writes a letter saying the AATA doesn’t have to follow the law, then the board is in a whole different position about voting. He felt differently about voting under that kind of situation. But Nacht stressed that the decision has a financial impact for employees and their families. So through the budget process, the AATA can compensate and adjust if there’s a board consensus that there should be neutral impact to employees financially.

Bernstein returned to Cooper’s comment on individual employees, stressing that the potential impact to an employee is difficult to predict, because it’s dependent on each employee’s medical experience during the year. Ed Robertson had left the room during the deliberations to get some additional information, but returned to tell the board that the “drop-dead date” on open enrollment was a week from that day [July 23] for management staff.

Bernstein ventured that they should give staff a chance to gather more data and to get a legal opinion. Sue Gott stressed that she wanted a legal opinion in writing – so she could read it ahead of time. Nacht also ventured that he’d like to have a legal opinion on supplemental employee compensation based on health care receipts. Bernstein indicated no enthusiasm for that approach, saying it would be a “total nightmare,” citing concerns about breaching confidentiality. Responding to Nacht’s suggestion that confidentiality concerns could be addressed by using third-party administrators, Bernstein feared that costs would keep getting added.

Ford tried to extract some specific direction from the board. He ventured that he was supposed to get a legal opinion and then convene a special meeting. He’d need board members’ schedules for that, he noted. Nacht clarified for Ford that he’d like a legal opinion on three subjects: (1) How does compliance with Act 152 affect the AATA as it relates to USC 5333(b) for union employees? (2) How does compliance with Act 152 affect the AATA as it relates to USC 5333(b) for non-union employees? and (3) To the extent the AATA is following the law, what are some legal options about the AATA’s ability to adjust employee compensation? The deliberations concluded with Bernstein querying Ford: “Michael, are you clear?” “Got it,” was Ford’s reply.

Outcome: The board took no action on the issue, but held out the possibility for a special meeting to be convened in order to vote on the question.

Transit Master Plan Consultant Contract

The board considered adding $60,000 to the contract with Steer Davies Gleave, a consulting firm originally hired on April 21, 2010 to help develop a transportation master plan (TMP). The TMP is the basis for the AATA’s initiative possibly to convert the AATA to an Act 196 transit authority, with the intent to expand geographically the agency’s governance and service coverage area countywide. The consulting firm is assisting the AATA in that effort.

The original contract with Steer Davies Gleave was for $399,805. Over the last two years, the contract amount has been increased by board authorization on three occasions (on Nov. 18, 2010, July 19, 2011 and Feb. 16, 2012), which brought the total contract to $720,622. The July 16, 2012 authorization brought that total to $780,622.

Among other things, this most recent contract increase was to cover the following items: documentation of financial analysis; methodology for an equity analysis of the new service program; design and monitoring of the long-term countywide district-based community input; and administration of a community input planning tool. Of the additional amount in the contract, a portion will essentially be passed through to a local consultant, Carlisle Wortman Associates of Ann Arbor.

The previous increases to the contract covered an expanded public process, support to a financial task force, and the generation of a draft five-year service program. [.pdf of detail on Steer Davies Gleave contract changes]

Board member David Nacht said his understanding was that to some extent the additional funds would go to a local company [Carlisle Wortman Associates], which CEO Michael Ford confirmed. Nacht ask: “Is this going to be it, ya think, with this contract?” Ford indicated that the AATA is trying to “internalize” all the work that SDG has been doing until now. It’s his hope that this would be the final revision to the contract, he indicated.

Anya Dale, who serves as chair of the planning and development committee that had recommended the additional funds, noted that the resolution states it’s the “final contract amendment.” Ford indicated that if there were some compelling reason, it could be brought back, but the AATA is trying to bring the work in-house and “own it.”

Board chair Jesse Bernstein ventured that if the AATA needed some help from an international consultant like SDG, they could be hired for new contract, but this would finalize the transit master plan process. Nacht asked his colleagues to imagine that there’s some kind of an election in the spring [for example, on the question of a countywide transit millage to support expanded service]. No matter the outcome of that election, Nacht supposed, there would still not be any continuation of the SDG contract.

AATA strategic planner Michael Benham confirmed Nacht’s understanding. The intent is to bring the work in-house so that any changes to the plan or the service that might result from a popular vote could be implemented by the AATA staff. He expected that any necessary changes that might come from the results of an election would be, for example, to add a service here or take away a service there.

Sue Gott asked Benham to elaborate generally on the value SDG is bringing in terms of additional expertise, and productivity for added deliverables. She wondered if the issue was a matter of additional expertise or time and availability of AATA staff.

Benham clarified that the need for outside help had been the combination of the sheer volume of the issues that had to be handled, and with the fact that the AATA didn’t have staff on board who could do some of the analysis necessary. Now that the basic plan has been created, he said, AATA staff is in a position to do adjustments and revisions. Creation of the plan by AATA staff would have been difficult, he said. Gott asked if it’s fair to say that the majority of what SDG is bringing is added expertise. Ford indicated that it’s the expertise that SDG brings, as well as their international experience.

Responding to the mention of SDG’s international experience as critical – as it relates to some of the work that the additional funding will pay for, David Nacht asked, “Really? I mean, to attend the DAC [countywide district advisory committee] meetings and organize the DAC meetings?” Benham indicated that a lot of what this final contract revision is covering could be thought of as “training.” SDG has a lot of expertise, he said, and the AATA is asking SDG to hand it over to the AATA now.

Nacht told Benham that what he really heard Benham saying, and what sells Nacht on it, is not that SDG has international expertise. Rather, it’s that AATA has invested a lot of money with SDG to figure out the complexity of the service that will generate the actual routes for the buses in a countywide system. So as the AATA works with communities in the county and tries to transfer that knowledge – so people really understand it – the AATA needs to understand all of that, too, Nacht said. So it’s really in-house training for the AATA, so that AATA can run a countywide system, Nacht concluded.

Outcome: The board voted unanimously to approve the $60,000 contract increase with Steer Davies Gleave.

NightRide Contract

The board considered an increase in its contract with Blue Cab, which is the vendor that operates the AATA’s NightRide service. The increase is from $28 to $32 per service hour for a contract that extends through 2013. The current three-year contract was set to expire in November 2012.

The NightRide is a shared cab service with a basic fare of $5, which is available weekdays from 11 p.m. to 6 a.m. and weekends from 7 p.m. to 7 a.m. Those are hours when the AATA’s regular fixed-route service does not operate.

Of the $4 per service hour cost increase in Blue Cab’s contract, $3 is analyzed by the AATA as based on compliance with the AATA’s relatively new living wage policy. The other $1 is analyzed as a general cost increase.

The geographic coverage area of AATA’s NightRide was expanded eastward to Golfside Road in March 2011 and further to downtown Ypsilanti in January 2012 – as part of a broader effort to improve work transportation between Ann Arbor and Ypsilanti. Ridership has increased about 40% from last year – with about 25 points of that increase due to broader geographic coverage and the other 15 points due to demand in Ann Arbor.

Ridership on the AATA’s NightRide service showed a clear increase starting in January 2012. 

During her report from the planning and development committee, Anya Dale characterized the increased net cost to the AATA of the hourly operating increase as coming to around $46,000.

During deliberations, board member David Nacht asked if there’d been any complaints about Blue Cab by patrons. Board chair Jesse Bernstein noted that he’d been thanked several times by restaurant employees for the geographic expansion of service.

Chris White, manager of AATA service development, indicated that the number of complaints about Blue Cab has been low historically. However, he allowed that in recent months, complaints had shown an increase. White attributed the increased complaints to the fact that a lot of new people are using the NightRide. White also said that Blue Cab has been good at addressing complaints when they’ve occurred.

Outcome: The board voted unanimously to approve the Blue Cab contract extension.

Marketing, Public Relations Contract

The board was asked to authorize purchasing up to $500,000 of marketing and public relations services from Quack! Media and Pace & Partners Inc. over the next five years.

The marketing and public relations work will cover “public relations, education, community outreach and other communication services in support of AATA’s initiatives and general operations.” The two firms were selected after the issuance of a request for proposals that generated 13 responses from the 35 firms to whom the request was sent. Quack! Media is an Ann Arbor firm, while Pace & Partners is based in Lansing.

Board member David Nacht led off deliberations by asking why the AATA had switched vendors. Mary Stasiak, AATA director of community relations, explained that it had been a competitive procurement process. The decision was based on relative experience and qualifications, she continued. There was some specific experience, approach and management style the AATA was looking for, she said, to help move the strategic marketing and information plan forward. It requires a more sophisticated effort and project management, she said. The two companies the AATA had settled on use the same project management software, and they also have transit-related experience, she said.

Nacht confirmed with Stasiak that the AATA had a consultant study the AATA’s marketing efforts and that the request for proposals (RFP) had been designed in part based on findings of that study. But the company that performed the study is one of the companies that is being awarded the contract, Nacht said. He wondered: “So they came up with a recommendation that we should change in a way where they had a competitive advantage?” No, Stasiak said, because all respondents to the RFP were provided with the same information – the same marketing and strategic plan.

Nacht wanted to know if the situation had been scrutinized to make sure that the deck wasn’t stacked – that the consultant didn’t say, “What AATA really needs is a company that provides X” when the company “knows fully well that they have X better than their competition.” That’s always a danger, Nacht said. Stasiak came back to her point that all the bidders had the same information.

AATA board member Eli Cooper deliberates at the July 16, 2012 special meeting. To his right is board member Sue Gott. To her right is CEO Michael Ford.

Board chair Jesse Bernstein noted that the RFP was generated by AATA staff. Eli Cooper noted that the proposals had been reviewed by AATA staff and had been winnowed down from 13 to 5 and ultimately decided based on AATA’s needs, not whether the firm could “do X better.”

Subsequent board discussion clarified that the total limit on the contract is $500,000 over possibly five years – three years plus two one-year extensions. Stasiak indicated that the previous contract with the previous vendor had resulted in expenditures of $427,000 over three years. Nacht got clarification that the contract is subject to 30-day termination. Bernstein and Sue Gott indicated that they were interested in monitoring the performance of the two firms. Bernstein said there should be substantial reporting back to the performance monitoring and external relations (PMER) committee. Cooper drew out the fact that the contract is an “on-call” or “task-order” type contract. Nacht ventured that the AATA has the option not to give the two companies any tasks.

Outcome: The board voted unanimously to approve the media and marketing contract with Quack! Media and Pace & Partners Inc. over the next five years.

Fire Hydrant Contractor

The board considered a $104,000 contract with RBV Contracting to relocate a fire hydrant as part of the AATA’s bus garage expansion project. The city of Ann Arbor is requiring the relocation of the hydrant – located on the south end of the AATA’s property at 2700 S. Industrial Highway.

In the new location, the hydrant will connect to the neighboring property, which is owned by the University of Michigan. The change will create a continuous loop connection of the fire hydrant system in the area.

Commenting on the resolution, Eli Cooper – who sits on the planning and development committee that had recommended the action – noted that moving the hydrant is a city requirement for occupying the new space. David Nacht wondered why the board even need to vote on the action. Board chair Jesse Bernstein told him it was because it’s a lot of money. [With the contingency, the project went over the $100,000 threshold that requires board approval.]

Outcome: The board voted unanimously to approve the contract to relocate the fire hydrant.

Communications, Committees, CEO, Commentary

At its July 16 meeting, the board entertained various communications, including its usual reports from the performance monitoring and external relations committee, the planning and development committee, as well as from CEO Michael Ford. The board also heard commentary from the public. Here are some highlights.

Comm/Comm: Countywide Expansion

In his update to the board, CEO Michael Ford alerted the board to the fact that the Washtenaw County board of commissioners would be giving final consideration to the four-party agreement (between the city of Ann Arbor, the city of Ypsilanti, the AATA and Washtenaw County) and the articles of incorporation of a new transit authority at the county board’s Aug. 1 meeting. The county board gave initial approval to the two documents at its July 11, 2012 ways & means committee meeting, after lengthy deliberations.

Comm/Comm: New Blake Transit Center

Ford noted that the new downtown Blake Transit Center would be reviewed by the city planning commission at its meeting the following day, on July 17. [Outcome of that review was an affirmation by the planning commission that the project meets city requirements for private development, with two exceptions involving landscaping and driveway width. The key change in the site, compared to the current configuration, will be moving the transit center building from the Fourth Avenue side of the midblock driveway to the Fifth Avenue side. The buses will also enter the driveway from the Fourth Avenue side and exit onto Fifth Avenue – which is the reverse of the current traffic flow. ]

Ford told the board that he hopes to be able to bring the Blake Transit Center proposal to the  Aug. 20 Ann Arbor city council meeting.

Comm/Comm: Triennial Review

In his update to the board, Ford noted that the Federal Transit Administration (FTA) had come in to review the way that the AATA handles its federal grants, which the FTA does every three years. Ford told the board that the AATA had done a very good job. A typical transit agency will have about seven deficiencies, Ford said, but FTA had found only one at the AATA – and that one was corrected “on the spot.” The FTA had told the AATA was the review was “top notch,” so Ford  commended the AATA staff on that.

Comm/Comm: Revisions to Five-Year Service Plan

Jim Mogensen reminded board members that a while back he’d addressed them about the parallels between the current countywide plan and the plans from the mid-1970s. A barrier to implementing that vision at that time was the confluence of money and politics, he noted. Now that conversation has opened again with all its complexity.

He observed that there are 15 different amendments to the service plan that are being looked at – so Mogensen ventured that it might be good to have a central place with all of that documented so that people can track what’s going on. Board chair Jesse Bernstein responded to Mogensen by saying, “We’re with you and that’s [strategic planner] Michael Benham’s job.”

Comm/Comm: General Complaints

Thomas Partridge addressed the board as an advocate for those who need transportation services the most. He complained that Blue Cab had not undergone sufficient evaluation and scrutiny. He expressed continued concerns about problems with service on the A-Ride service, for which the AATA contracts with SelectRide. He claimed there are violations so serious that they’re violations of criminal and civil laws. He questioned the continued “proclivity” of the board to go to outside contractors and pay their expensive rates without the board first exploring AATA’s ability to provide services in-house.

When he reached the end of his two-minute time, Partridge told board chair Jesse Bernstein he would appreciate additional time – otherwise Bernstein would be giving the appearance that the board didn’t want to hear constructive criticism. Bernstein explained to Partridge that there’s a rule that everyone gets two minutes. Partridge replied that before 1920 there was a law that said women couldn’t vote.

Present: David Nacht, Jesse Bernstein, Eli Cooper, Sue Gott, Anya Dale.

Absent: Charles Griffith, Roger Kerson.

Next regular meeting: Thursday, Aug. 16, 2012 at 6:30 p.m. in the fourth floor conference room at the Ann Arbor District Library, 343 S. Fifth Ave., Ann Arbor. [Check Chronicle event listings to confirm date]

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Josie Parker, right, director of the Ann Arbor District Library, talks with AADL board chair Margaret Leary at the board's Dec. 8 special meeting. (Photo by the writer.)

The board had called a special meeting for Thursday to vote on these contracts, which run from Jan. 1, 2012 through June 30, 2015. The agreements are with the Ann Arbor District Library Staff Associates, which represents 30 employees, and the Ann Arbor District Librarians Association, which represents 14 AADL librarians. All but two of these 44 workers are full-time employees with benefits. The library employs a staff of nearly 200 at its five location throughout the district, including about 100 full-time workers.

The previous contracts expired on June 30, 2010. The main difference between the old and new contracts relates to a change in health insurance providers, plans and employee contributions, according to AADL director Josie Parker. She said she appreciated the hard work that both sides of the negotiations had done to reach an agreement.

The two AADL bargaining units are part of the Michigan Education Association, dating back to the years prior to 1996 when the library was still part of the Ann Arbor public schools system. Paul Morrison, executive director of the Ann Arbor Education Association – the local MEA unit – participated in negotiations and described the outcome as “not great for labor” but reasonable, given the economic circumstances.

The board took two other actions at its meeting on Thursday: (1) a vote to cancel its Dec. 15 meeting, because there are no pressing agenda items; and (2) a vote to call an executive session for its Jan. 16, 2012 meeting, to discuss the written opinion of its legal counsel.

Labor Agreements Finalized

There was little discussion at Thursday’s meeting about the two labor agreements. Board chair Margaret Leary noted that trustees had received copies of the documents for review earlier this week, and had discussed the negotiations extensively in executive sessions over the last year. [.pdf of agreement with Ann Arbor District Library Staff Associates] [.pdf of agreement with Ann Arbor District Librarians Association]

AADL director Josie Parker told the board it was with great pleasure that she was bringing the agreements for a vote, and noted that they would be effective from Jan. 1, 2012 through June 30, 2015. [AADL's fiscal year ends on June 30.]

Barbara Murphy, the board’s treasurer, thanked the staff for their perseverance, observing that it had been a long haul and everyone had worked hard to arrive at an agreement.

Outcome: In separate votes, the board unanimously approved the two labor agreements.

Glen Modell, co-president of the staff associates bargaining unit, and Beth Anderson, the librarians association bargaining committee representative, attended Thursday’s meeting but did not address the board. When queried by The Chronicle after the board adjourned the meeting, Modell indicated that he preferred not to comment on the agreement or the negotiations, other than to say that it was a long process.

In response to an email from The Chronicle, Paul Morrison of the Ann Arbor Education Association left a message on voicemail describing the negotiations as very difficult due to economic constraints of the public sector. The process went through the entire range of steps, including fact-finding and mediation, he said. The outcome is “not great for labor,” Morrison said, but is reasonable considering the circumstances.

The contracts, because of their duration, provide some stability for both employees and the board, he said. Morrison said he hoped to see a brighter future for employees, “but it will be a while.”

The agreements cover a range of issues, including health insurance, a grievance and arbitration procedure, seniority, layoff and recall, vacations, leaves of absence, and performance evaluations, among others. The salary range for librarians in 2011-2012 is set between $41,743 and $59,579. The salary for staff, with six pay grades, ranges from $25,081 to $59,579.

In response to a Chronicle query, Parker elaborated on the agreements. For the new contracts, the bargaining units chose to accept the same health care providers and plans as AADL’s non-union staff, she said. She noted that currently, the health insurance offered to non-union employees falls well below the state-mandated caps that take effect Jan. 1. [On Jan. 1, 2012, public employers will be prohibited from paying more than $5,500 for health benefits annually for a single employee, $11,000 for an employee plus spouse, or $15,000 for family coverage.]

The final agreement was the same as the library’s initial offer, Parker said. Employees have five plan options with three health care providers – Blue Cross Blue Shield, Blue Care Network, and Priority Health – at varying costs. Two of the plans that are the least expensive, offered by Blue Care Network and Priority Health, are based on health incentives. Some of the concerns raised by unions related to these plans, which were considered as intrusive. [These types of insurance plans reward certain health behaviors – not smoking, for example, or following treatment regimes for chronic conditions like asthma or diabetes.]

Parker noted that more than half of AADL’s full-time staff with benefits already choose from these plans and are satisfied. The health incentive plans aren’t mandatory and there are other options, she said, so the library felt the selection was reasonable and fair.

The lack of a renegotiated agreement with AADL’s bargaining units had an impact on the district’s finances in the last fiscal year. The library administration had anticipated reaching an agreement with the unions earlier than it did, and had budgeted for lower employee benefit expenses during fiscal 2010-2011 – $1.5 million, compared to $1.678 million approved for the previous year’s budget.

However, health care costs were higher for the fiscal 2010-2011 year than budgeted, requiring that the board authorize the transfer of $60,000 from the salaries and benefits line item into the employee benefits line item at the end of the fiscal year. The board took that action, along with other year-end budget adjustments, at its June 20, 2011 meeting.

Employee benefits for 2011-2012 are budgeted at $1.51 million out of an overall $12.034 million budget.

In response to a question from The Chronicle, Parker indicated that labor issues have no connection to the recent decision to explore the future of the downtown library building on South Fifth Avenue. [See Chronicle coverage: "Library to Restart Downtown Facility Review"]

Parker said she appreciated the hard work of all involved on both sides of the negotiations. The agreements were signed by Parker, board chair Margaret Leary, AADL associate directors Ken Nieman and Eli Neiburger, and human resources manager DeAnn Doll. The Ann Arbor District Librarians Association agreement was signed by co-presidents Lucy Roehrig and Betsy Baier, Ann Arbor Education Association executive director Paul Morrison, and bargaining committee representative Beth Anderson. The Ann Arbor District Library Staff Associates agreement was signed by co-presidents Graham Lewis and Glen Modell, bargaining committee representative Robin Madigan, and Morrison of the AAEA.

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

Absent: Rebecca Head

Next meeting: Monday, Jan. 16, 2012 at 7 p.m. in the library’s fourth floor meeting room, 343 S. Fifth Ave. [confirm date]

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On Jan. 1, 2012, public employers like Washtenaw County will be prohibited from paying more than $5,500 for health benefits annually for a single employee, $11,000 for an employee plus spouse, or $15,000 for family coverage. However, the law allows a public employer, by a majority vote of its governing body, to choose another option: to pay not more than 80% of the total annual costs of all the medical benefits plans it contributes to or offers its employees and elected public officials.

When the board initially passed this resolution on Nov. 16, it stated that collective bargaining agreements entered into by the county on or after Sept. 15, 2011 must comply with the 80/20 rule. Five of the county’s 17 bargaining units, representing about 95 employees, do not yet have agreements with the county for 2012-2013. Those employees would be subject to the 80/20 rule, which will place more responsibility on employees for the cost of health care.

However, on Wednesday the resolution was amended – on a 9-2 vote – to change the Sept. 15 date to Jan. 1, 2012. Voting against the amendment were Alicia Ping (R-District 3) and Dan Smith (R-District 2). Both commissioners indicated that it wasn’t fair to other bargaining units who had met the Sept. 15 deadline. County staff said the change simply gives the administration more flexibility in trying to reach agreements with the unions before the end of this year.

The units that haven’t accepted concessions are those representing the prosecuting attorneys, the prosecuting attorney supervisors, attorneys in the public defenders office, supervisors of attorneys in the public defenders office, and AFSCME Local 3052 representing general supervisors. During public commentary at the end of Wednesday’s meeting, county prosecuting attorney Brian Mackie spoke to the board, saying that it wasn’t appropriate for some commissioners to imply that the five remaining bargaining units are negotiating in bad faith. He said there is nothing wrong with the way that they’re negotiating, and noted that two years ago, the prosecuting attorneys had been the first of the county’s bargaining units to agree to pay for a portion of their medical insurance.

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

The resolution was brought forward by Washtenaw County commissioner Yousef Rabhi (D-District 11). [.pdf of resolution] Rabhi described the situation as an issue of fairness and equality – the county should be able to treat all of its employees, regardless of sexual orientation, with the same level of care. He also argued that eliminating the county’s ability to extend benefits would hamper its hiring ability. That’s of particular concern because the county is expected to fill about 100 positions in the coming year, in the wake of a high number of retirements at the end of 2011.

The county offers its employees the option of benefits in an “other eligible adult” category, which includes benefits to same-sex partners as well as opposite-sex partners. There are nine people enrolled in this category of benefits, according to Diane Heidt, the county’s human resources and labor relations director.

Commissioner Rob Turner (R-District 1) and Dan Smith (R-District 2) voted against the resolution. Turner said he appreciated that in the past, the board has stayed away from weighing in on state-level issues, which can cause divisiveness among commissioners, he said. Smith argued that the board should focus on issues affecting the county.

Several other commissioners expressed support for the resolution. Alicia Ping (R-District 3) noted that there are already 50,000 people in Washtenaw County who are uninsured, and she didn’t think it was good to take any action that would add to the ranks of the uninsured.

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

At right: Diane Heidt, Washtenaw County’s human resources and labor relations director, talks with Caryette Fenner, president of AFSCME Local 2733, the county government’s largest union. (Photos by the writer.)

The briefing was delivered by Diane Heidt, the county’s human resources and labor relations director. She told the board that they’d be discussing specific negotiation strategies at their March 3 working session – those talks will be held in a closed session, however. Heidt’s presentation last Thursday was meant to set the stage for commissioners, and to answer any general questions they had as the county prepares to negotiate with its 17 bargaining units.

Leaders of two unions attended Thursday’s working session, though they did not address the board during the meeting: Caryette Fenner, president of AFSCME Local 2733, the county government’s largest union, which represents 621 workers within its five units; and Nancy Heine, president of AFSCME Local 3052, with 56 members.

The county faces a two-year, $20.9 million deficit for its 2012 and 2013 budget years. In a “State of the County” report given to the board earlier this year, county administrator Verna McDaniel targeted $8.5 million in cuts to employee compensation and benefits as part of their strategy for tackling the projected shortfall.

Washtenaw County Labor Overview

Heidt began by giving some context regarding the laws that govern collective bargaining. Congress passed the first federal labor relations act in 1935, to protect interstate commerce from being disrupted by labor disputes or work stoppages, Heidt said. The same goals drove Michigan’s state laws that regulate labor unions for public sector employees, she said.

The specific state laws that govern collective bargaining are:

• Labor Relations and Mediation Act (Act 176 of 1939): Grants full collective bargaining rights to private sector employees. It also provides for settling representation disputes, the hearing of unfair labor practice charges, and the mediation of contract disputes and grievances. Act 176 set up the three-person Michigan Employment Relations Commission (MERC) to administer these provisions, and to oversee the public bargaining laws.
• Public Employment Relations Act (PERA) (Act 336 of 1947): Provides for the recognition of an exclusive bargaining agent for public employees in appropriate units, and prohibits certain acts as unfair labor practices. It also prohibits strikes in the public sector. However, state employees are specifically excluded from PERA.
• Compulsory Arbitration of Labor Disputes in Police and Fire Departments (Act 312 of 1969): Provides for the compulsory arbitration of labor contract disputes between public safety employees of police and fire departments who are otherwise covered by PERA. While the MERC administers Act 312, the arbitration is carried out by private neutral arbitrators according to a MERC-sponsored selection process. Following a hearing before the arbitrator of all issues in dispute, the neutral arbitrator must make a decision, giving attention to a list of established criteria. The arbitrator is required to settle economic issues by selecting the last offer of either party which best meets the established criteria.

Heidt then explained that state law requires public entities to include certain mandatory topics as part of its collective bargaining contract negotiations. They include: (1) wages – hourly rates, shift premiums, vacation pay, time spent on union business, and fringe benefits; (2) hours – actual time worked, time spent on breaks, and overtime; and (3) working conditions – promotions, seniority, layoffs, shift preferences. “Those are the overarching areas,” she said.

Two of the county’s 17 bargaining units are covered by Act 312: The Police Officers Association of Michigan (POAM), with 251 members; and the Command Officers Association of Michigan (COAM), with 32 members. The other 15 units are covered by a process known as “bargaining in good faith,” Heidt said – arriving at an agreement through a give-and-take process of proposals. If no agreement is reached, there’s a process that provides for mediation, fact-finding and ultimate resolution.

One of the most crucial parts of a labor agreement lays out the grievance process, Heidt said – “that’s the piece that helps us resolve labor disputes.” It shouldn’t be viewed as a negative, she said. Contracts are relatively short documents – 50 pages or so, with about 75 articles – and there’s no way they can address every issue that might arise during the three- to five-year period of the contracts. That’s why having a clear grievance process is important, she said.

The state, through MERC, provides guidelines that govern where particular positions fit within the bargaining units. For example, you wouldn’t have nurses and sheriff’s deputies in the same bargaining unit – their roles are too dissimilar.

Labor Overview: Bargaining Units, Non-Union Employees

Heidt then outlined the 17 different bargaining units that represent the county’s 1,044 union employees. She noted that by law, employees and their supervisors can’t be part of the same bargaining unit.

• AFSCME Local 2733 (American Federation of State, County and Municipal Employees): 621 total members. There are five bargaining units within Local 2733: (1) Unit A (340 members) includes all general county professional employees who have a four-year college degree or higher, excluding supervisors; (2) Unit B (176 members) includes general county employees whose job requires less than a four-year degree, excluding supervisors; (3) Unit C (53 members) includes all employees of the 22nd District Court and Friend of the Court program, excluding supervisors; (4) the Family Division/Juvenile Center (29 members) includes all employees of the Washtenaw County Trial Court’s Family Division/Juvenile Center, excluding supervisors; and (5) Juvenile Detention (23 members) includes all employees of the county juvenile detention facility, excluding supervisors.
• AFSCME Local 3052: 56 members. Includes two units: (1) for general supervisors, excluding executive and administrative employees, and (2) supervisors at the Family Division/Juvenile Center, excluding executive and administrative employees.
• Michigan Nurses Association: 14 total members. Includes two units: (1) Unit I (12 members) for public health nurses; and (2) Unit II (2 members) for public health nurse supervisors.
• TPOAM (Technical, Professional and Officeworkers Association of Michigan): 33 total members. Includes two units: 1) Unit I (24 members) includes all senior deputy district court clerks, deputy district court clerks and probation secretaries at the 14-A District Court; and 2) Unit II (9 members) includes supervisors and probation officers at the 14-A District Court, excluding magistrates and the deputy court administrator. Heidt explained that until last year, these employees had been represented by the Teamsters, but they had voted to de-certify and become certified as part of the TPOAM union instead.
• Assistant Prosecutors Association: 24 members. There are two bargaining units covering assistant prosecuting attorneys, excluding the chief assistant PA and the deputy chief assistant PA.
• Public Defenders Association: 13 members. There are two bargaining units covering assistant public defenders, excluding the chief assistant public defender.
• Police Officers Association of Michigan (POAM): 251 members. Includes all general staff of the sheriff’s office, including deputies, corrections officers, communication dispatchers and support staff.
• Command Officers Association of Michigan (COAM): 32 members. Includes all supervisory staff of the sheriff’s office, including sergeants and lieutenants.

Heidt also gave a headcount for the county’s 270 non-union employees: (1) 26 elected officials; (2) 20 department heads – 18 in county units, and 2 in the trial court; (3) 181 professionals/managers – 146 in county units, and 35 in the court; (4) 34 support staff – 22 in county units, 12 in the court; and (5) nine non-union sheriff’s office employees – Heidt noted that these employees get wages and benefits matching the COAM union.

Negotiated union salary adjustments have generally been offered to non-union workers as well, Heidt said. Unlike union workers, non-union employees do not get automatic “step” increases, however, nor do they receive extra pay based on the length of time they’ve served, she said. Pay-for-performance increases for non-union employees have been on hold since 2009, she noted.

Labor Overview: Economic and Non-Economic Contract Provisions

Heidt reviewed elements of current union contracts that will be mandatory subjects of collective bargaining.

New hires are brought in at the first or second “steps” of their salary grade. With the administrator’s approval, someone can be hired at up to the midpoint of the job’s salary grade – beyond that midpoint, an offer requires board approval. On an employee’s anniversary date – typically the date of their hire – they get an automatic increase to the next step in the salary grade. Across-the-board increases for union employees are part of the contract negotiations. [.pdf of 2011 salary table for Washtenaw County]

When a union member’s job is reclassified, they’re eligible for one step increase at the new salary grade – that typically represents a 4% increase, Heidt said. For promotions, two step increases are granted at the new salary grade – generally equivalent to an 8% increase.

Longevity pay is also given to union workers, based on their length of service. These increases are distributed in different ways, Heidt said – some get the longevity pay once a year, other employees get the increases spread out as part of their regular paychecks. As part of the 2009 contract negotiations, different longevity pay scales were adopted for new hires.

Heidt then described the various retirement plans for county workers, noting that the board will hold a working session on this topic in May, with a greater level of detail. There are three plans:

• Washtenaw County Employees’ Retirement System (WCERS): A defined benefit plan with 1,001 members, 24 deferred members, and 727 retirees or beneficiaries.
• Municipal Employees’ Retirement System (MERS): A defined benefit plan only for employees of the sheriff’s office, with 286 members, 17 deferred vested members, and 10 retirees/beneficiaries.
• Voluntary Employees’ Beneficiary Association (VEBA): A 501(c)9 trust established to pre‐fund retiree health care benefits.

Employees also receive s “healthy” package of fringe benefits, Heidt said. Those benefits include Blue Cross/Blue Shield health insurance and dental insurance, life insurance, long-term disability, overtime and paid leave, among other benefits. She noted that as part of the 2009 contract concessions, most of the unions agreed to take eight unpaid “banked” leave days, which amounted to about a 3.1% cut.

They’ll also be negotiating a raft of non-economic provisions, Heidt said. Those include the grievance procedure, working hours, leaves of absence without pay, transfers, promotions, seniority, layoffs and “bumping,” progressive discipline and discharge, performance evaluations, and management rights.

Labor Overview: Next Steps

Heidt said the unions and administration use a method called interest-based bargaining (IBB), which AFSCME requested in 2002. It’s been very successful, she said, and involves trying to find options that benefit both sides. The process includes a discussion about why the positions that you’re taking are important – it’s not just making offers and counter-offers, she said, and the approach has dramatically enhanced labor/management relations.

On the administration side, the negotiating team will consist of Heidt; finance director Kelly Belknap; Donna Sabourin, executive director of the county’s Community Support and Treatment Services (CSTS) department; Bob Tetens, director of Washtenaw County Parks & Recreation; Lisa Greco, director of the county Children’s Services department; Dan Dwyer, Washtenaw County Trial Court administrator; and Judah Garber, representing the Trial Court’s Family Division.

The negotiating team will be backed up by a “base” team, Heidt said, which has some overlapping members. That group includes: Heidt; Belknap; Dwyer; budget manager Jennifer Watson; county administrator Verna McDaniel; deputy county administrator Bill Reynolds; Joanna Bidlack of the administrator’s office; Patrick Barrie, executive director of the Washtenaw Community Health Organization; county commissioner Rolland Sizemore, Jr.; Greg Dill of the sheriff’s office; and water resources commissioner Janis Bobrin.

Heidt said that she and Watson will be looking at financial projections.  At the March 3 closed session they’ll be asking the board for some parameters to use in negotiations. The closed session will also be the time to talk about their general labor relations strategy, she said.

On March 21 and 23, members of the negotiating teams and the budget planning team will go through training sessions for interest-based bargaining. Heidt extended an invitation to commissioners to participate as well. Training will be provided by federal mediators at no charge to the county, she said. Expedited negotiations will be conducted in March and April, with the goal of reaching agreement by July 1.

It’s important to set their goals and resolve these negotiations early, Heidt said, especially in light of uncertainties at the state and federal levels. Employees are very unsettled, she noted. “The sooner we can identify our future, the better off we’ll all be.”

Labor Overview: Commissioner Comments, Questions

Conan Smith, the board’s chair, observed that the process is always trepidatious, because it concerns people’s livelihoods. It’s important to know how the board should participate, he said. Part of their role is to set goals and direction – they’ll start that process in the closed session they’ll hold to talk about the labor negotiations, he said. Smith also noted that he didn’t believe the county had sufficient back-and-forth during concession talks with the POAM and COAM. [Those two unions, which represent employees of the sheriff's office, did not give concessions during the 2009 budget cycle, but earlier this year agreed to concessions that are expected to save a total of $5.6 million over a four-year period.]

How can they ensure that there’s effective dialogue? Smith asked. Heidt responded that the negotiating team is part of the process, along with the budget planning team. She said she’d be open to suggestions about how best to update the board regarding negotiations. The worst thing that could happen, she said, is if she signed a tentative agreement with the unions, brought it to the board for approval and discovered that it wasn’t what the board wanted. The board should know what’s coming, and that it fits within the goals and budget projections they’ve established.

At left: Caryette Fenner, president of AFSCME Local 2733, talks with county commissioner Yousef Rabhi (D-District 11).

Smith joked that his general inclination is to give Caryette Fenner anything she wants. (Fenner, president of AFSCME Local 2733, the county government’s largest union, attended the working session in the audience.) He asked Heidt to describe what the role of individual commissioners should be during this process. Are there any guiding principles they should follow?

Heidt said it’s important to remember that there’s a negotiating team that represents the board. Hopefully, commissioners are comfortable with that group, she said – if not, she needs to know. The different bargaining units are also represented by members who’ve been elected to do the negotiations. While it’s important to listen to concerns from employees, she said, it’s also important that commissioners not make promises – they need to consider what impact that might have on negotiations. Communication is crucial, but should be in the form of listening, then bringing any concerns to the negotiating team members, she said.

The pre-negotiation process includes information-sharing, Smith said. In the past, commissioners have heard from employees that they weren’t happy with the information they received – employees didn’t have faith that it was accurate and complete. Was there a process to ensure that this year, everyone’s on the same page?

Heidt said the administration is providing a range of information to the unions, including a survey of salaries and benefits in other communities that she’d just distributed earlier that day. The comparatives looked at the city of Ann Arbor and several other counties, including Ingham – where Michigan State University is located – as well as Oakland, Kalamazoo and Jackson counties, among others. [Excel spreadsheet of salary/benefits community comparatives]

A fringe benefits workgroup had met, looking at the costs associated with various benefits. That information was useful, Heidt said. The county’s budget and finance staff are also collecting information, including budget projections. In general, they’ll be giving unions whatever information union leaders request, Heidt said. That’s an aspect of interest-based bargaining, she noted – to be open, and ensure that they’re all “singing from the same hymnal.”

Smith said he’s impressed by both management and union leaders, who are committed to arriving at an outcome that’s best for the county, working as part of the same team. He said that earlier in the day, county administrator Verna McDaniel had characterized it this way: They’re all on the same plane. Smith joked that he hopes the plane doesn’t drop from the sky. Camaraderie was an important part of the previous budget discussions, he said, and he stressed his commitment to a process that’s as open, fair and inclusive as possible. “This will be as tough as it ever is, if not tougher,” he said, adding that he’s looking forward to the conversations.

Wes Prater asked several clarification questions. He noted that Heidt had indicated there are 1,287 employees in the pension system – he thought there were about 100 more employees than that. She replied that the number had been updated on Jan. 1. Employees who work less than full time aren’t included, she said.

Prater said he was also trying to figure out the number of supervisors compared to non-supervisory positions. He wanted to look at the organization’s “span of control” – the number of non-supervisors per supervisor. He thought the standard was 7 to 1, and he wondered what the county’s ratio was. McDaniel said the standard was more like 4 to 1. Heidt said she’ll gather that information.

Alicia Ping asked whether the comparative data that they’d collected on salaries and benefits had included non-union employees. Heidt said that this initial information looks at across-the-board salaries and benefits. As a part of the negotiation process, they’ll also be collecting comparables on specific positions, she said.

Responding to a question from Yousef Rabhi, Heidt clarified that there are 17 bargaining units, but that some of them work together for parts of the negotiation. There are five AFSCME units, for example – they usually work together for the broader issues, then split off talks separately for issues that concern just their specific unit.

Rabhi also asked for clarification about how the banked leave days work. Heidt explained that the majority of unions have banked leave, while non-union employees have furlough days. The main difference is that banked leave doesn’t affect retirement or longevity calculations, whereas furlough days do have an impact on retirement. She said they borrowed the plan from one that’s used by the state of Michigan, which was brought forward by the county unions several years ago.

Present: Leah Gunn, Kristin Judge , Alicia Ping, Wes Prater, Yousef Rabhi, Conan Smith.

Absent: Barbara Levin Bergman, Ronnie Peterson, Rolland Sizemore Jr., Dan Smith, Rob Turner.

County commissioners Mark Ouimet and Leah Gunn talk prior to the start of the Oct. 20 Washtenaw County board of commissioners meeting. During the meeting Gunn, a Democrat, defended Ouimet, who has come under attack by some Democrats for excessive and inappropriate per-diem claims. (Photos by the writer.)

At the center of public commentary and commissioner discussion – which at times grew heated – was the issue of whether commissioners are appropriately claiming reimbursements for mileage and per diem. The controversy first emerged at the board’s last meeting on Oct. 6, when Democrat Tom Wieder spoke during public commentary to call for an investigation into per diem spending by commissioner Mark Ouimet. That same Oct. 6 meeting included discussion of a projected two-year budget deficit for 2012 and 2013 that could exceed $20 million.

Ouimet, a Republican who’s running for state representative in District 52 against Democrat Christine Green, was defended on Wednesday during public commentary by the county’s top two GOP officials, Mark Boonstra and Wyckham Seelig, who accused the Democratic board majority of partisan politics. They said they’ve launched their own investigation into commissioner spending, specifically citing out-of-state travel by Kristin Judge. Judge has been a vocal critic of Ouimet’s spending, during the meeting noting that the board rules are clear and that Ouimet failed to abide by them at times.

Ouimet was also defended at Wednesday’s meeting by several Democrats who serve with him on the board and who said they had nothing to do with the recent criticism of him. Leah Gunn recalled that Ouimet had been her Ward 4 Ann Arbor city councilmember some 20 years ago, and that she’s always found him to be upstanding and gracious. Ken Schwartz criticized the “Lansing politics” that were being brought to the county. He noted that the board has a track record of working together without divisive partisan politics, and that they’d all been surprised by the recent controversy.

County clerk Larry Kestenbaum also weighed in, commenting on a report that his office had released earlier in the day that analyzed per-diem and mileage expenses for all commissioners, dating back to 2005. Ouimet claimed the most expenses by far during that period – $32,804. Of Ouimet’s claims, $10,564 was analyzed as ineligible, and another $6,055 was “uncertain,” indicating a gray area where reimbursement rules aren’t clear. That means that about half of Ouimet’s claims don’t fall into the clearly acceptable category. Kestenbaum spoke during public commentary, saying that he considered all the commissioners to be his friends and great public servants – the report was not intended to be an attack, he said.

Ouimet offered to put the disputed amount in escrow until all of the claims have been reviewed. [The Chronicle converted the county clerk's Excel workbook with multiple tabs, one for each commissioner, to a single .pdf file. Commissioner Ronnie Peterson has not claimed mileage and per-diem expenses, and is not included in the report.]

The issue of commissioner expenses came up earlier in the meeting in another context. Judge introduced a resolution that would have eliminated retirement pensions and health care for commissioners, saying that the change would save the county more than $25,000 annually. She noted that she had circulated the resolution to commissioners prior to the meeting, though it was not on the agenda. No one seconded the motion, and it died without further discussion.

Also related to budget issues, the board gave initial approval to levy 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. Three commissioners – Judge, Ouimet and Wes Prater – voted against the measure, and Jessica Ping abstained, citing the fact that a recipient of the funds, Ann Arbor SPARK, is a client of hers.

Another millage – one that, unlike Act 88, will be on the ballot – would support the Ypsilanti District Library. Linda Gurka, a member of the library’s board of trustees, spoke during public commentary to drum up support for the millage increase that will be on the ballot for Ypsilanti District Library voters. Also during public commentary, Todd Clark, co-chair of this year’s United Way of Washtenaw County‘s fundraising campaign, spoke in support of a proposed coordinated funding model for local nonprofits.

Commissioner Spending

At the board’s Oct. 6 meeting, Democrat Tom Wieder spoke during public commentary to call for an investigation into per diem spending by commissioner Mark Ouimet. The issue emerged again on Wednesday, when the county’s top Republican leaders and others defended Ouimet during public commentary – a defense echoed by some, but not all, of Ouimet’s Democratic colleagues on the board.

Commissioner Spending: Public Commentary

Kathleen Timberlake of Scio Township said that in light of the recent reports regarding per-diem spending, she’d like to see full public disclosure of the county clerk’s investigation of this matter.

Commissioner Jessica Ping, a Republican, read a statement from Jolea Mull, supervisor of Bridgewater Township, which is in Ping’s district. Mull was disappointed that Ouimet’s service has been maligned, stating that he should be commended, not condemned. Ouimet had been especially helpful to the township in dealing with the police services issue – the township benefited from his advocacy, according to her statement.

Wyckham Seelig, vice chair of the Washtenaw County Republican Committee, said he wanted to put the charges that have been levied against Ouimet into a broader context. He quoted from James Madison, who wrote in The Federalist No. 10 “… that measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority.” He quoted John Stewart Mill and, finally, Henry Reid – the Democratic senator from Nevada, who, when his party had been in the minority in the U.S. Senate, was concerned about the dangers of one-party rule. That’s exactly what’s taking place in Washtenaw County, Seelig said. [Nine of the 11 county commissioners are Democrats.]

He said he wasn’t talking about Wieder or Stu Dowty [chair of the Washtenaw County Democratic Committee] or Mark Brewer [chair of the Michigan Democratic Party]. “We kind of expect that from them,” Seelig said. “That’s what they do.” It was different when the attacks come from elected officials, he said. Seelig specifically charged that Kristin Judge was behind the attacks, and alleged that she bullied county clerk and fellow Democrat Larry Kestenbaum into investigating the per-diem issue – but only for expenses within the county, not for travel outside of Washtenaw, which would have showed that Democrats claimed more than Ouimet. Silence from other commissioners gives tacit consent to these actions, he said, adding that this is ordinary, normal behavior when one party dominates.

Mark Boonstra, a local attorney and chair of the Washtenaw County Republican Committee, also blasted Democrats on the board, and said he was rising to Ouimet’s defense in the face of scurrilous attacks on the eve of an election. [Ouimet is running against Democrat Christine Green for the 52nd District state House seat.] There’s no harder-working commissioner than Ouimet, Boonstra said – that’s why the board elected him vice chair. There’s also no more honest commissioner than Ouimet, he said, yet he’s been pilloried by Democrats and the press. Boonstra cited examples of Democrats on the board – Barbara Bergman, Jeff Irwin and Wes Prater – who have claimed per diem for attending multiple meetings in one day, but only Ouimet was singled out for this, Boonstra noted. He also cited higher out-of-county travel for Democrats.

All of this is all the more astonishing, he said, because it comes from someone who has presented herself as a champion of transparency and open government – referring to Kristen Judge. He charged that Judge had tried to divert travel funds from other commissioners into her own account in secrecy. [Transferring funds requires a vote by the board. A transfer request by Judge was discussed at the board's Sept. 1, 2010 meeting.] Boonstra called on commissioners to denounce these attacks and set aside partisan politics. He said the attacks had emanated from Mark Brewer, head of the Michigan Democratic Party, who had asked his communications manager to obtain records through a Freedom of Information Act (FOIA) request, and that Brewer’s minions locally had done the rest. Boonstra brandished a bundle of documents, saying they had obtained materials of their own through the FOIA, but that Democrats should remember who started the mudslinging – it hadn’t been the Republicans. He called on them to do an independent audit, and to make sure the rules are clear and apply to everyone equally.

Paul Schissler, a Lima Township resident, said he’s lived in Washtenaw County for 40 years, staying here after coming to attend the University of Michigan. He described his community involvement, which includes being a board member of the Western Washtenaw Area Value Express and a member of the Chelsea Rotary Club. Schissler said he’s never been so riled up in his life about anything political, and that Ouimet didn’t want him to be there speaking on his behalf. But when Schissler saw Ouimet’s character being attacked, he said he had to do something. Schissler said he’d read in AnnArbor.com that Ouimet got reimbursed for attending a lot of meetings and believed he was following the rules. But Schissler, who called AnnArbor.com a “blog of opinions,” said he didn’t see in the article the fact that Ouimet gives his salary and reimbursements to charity, and he didn’t read whether other commissioners did the same. Schissler called Ouimet “one of the finest people I’ve ever met in my life.” To assassinate his character is reprehensible, Schissler said, and it’s shameful to suggest that Ouimet is anything but hard-working and fair.

Washtenaw County clerk Larry Kestenbaum, left, talks with Curtis Hedger, the county's attorney, prior to the start of the Oct. 20 board of commissioners meeting.

Larry Kestenbaum, Washtenaw County clerk/register of deeds, said he hadn’t planned to speak – he didn’t have prepared remarks. He said he’d been characterized as a Democrat, and “I plead guilty to that,” he said. But he said he considered all commissioners to be friends and great public servants. The report that came from his office was never intended as any kind of attack on anyone, he said. Kestenbaum said he believed that everyone submitted expense requests in good faith, and that the standards that applied this year weren’t in place previously. He noted that Kristin Judge had pointed out the board rules have been in place for years, and that’s true – but not everyone reads the board rules, he said. Deputy clerk Jason Brooks applied the standards he’s been using this year to approve per diem expenses, Kestenbaum said. [Prior to 2010, no such approval was required.] Whether those standards are appropriate is something for commissioners to decide, he added.

Kestenbaum said he regretted that he didn’t include a cover letter with the report, to better explain what’s in it. He said he didn’t seek to do the report – it had been requested of his office – and while there may be some mistakes in it, everyone’s human. He noted that if someone makes a deduction on their taxes and it’s accepted every year by the IRS, it’s understandable that they believe the deduction is acceptable to make year after year. Finally, Kestenbaum  said that the commissioners knew he didn’t believe in per diems, and that this is an example of the kind of trouble it can cause.

In response to a follow-up email from The Chronicle, Kestenbaum clarified who had requested the report evaluating commissioners’ per diems:

Commissioner Ouimet made the original request. Then Commissioner Judge, through County Administrator Verna McDaniel, asked that the report be provided to the entire board. Then, after he was given the original report to review, Commissioner Ouimet asked for another report, covering ALL the board members. This was communicated to the county administrator as well, and she asked that Commissioner Ouimet’s report be merged in with the others rather than given separately.

Commissioner Spending: Commissioner Response

Wes Prater said Kestenbaum had explained what his office had done very well. Then directing his comments to Mark Boonstra, Prater said Boonstra was making statements without the facts. “You must not know how to read,” he said. Kristin Judge had nothing to do with the request for a report, Prater said, “and neither did I.” Prater said he might have made some mistakes in requesting reimbursements, but it wasn’t done intentionally. He said he had never accused Ouimet of anything, and that Boonstra should tell them who’d been making the accusations.

Kristin Judge spoke at length, and began by passing out a document she’d prepared that showed an itemized listing of commissioners’ spending, as a group, from 2005 through what’s been budgeted in 2010. Total spending in 2005, 2007 and 2008 topped $70,000. For 2010, under a new flex account structure, spending is capped at $39,050.

Judge said it’s the responsibility of each commissioner to read the board rules and abide by them. She then read the board rules regarding reimbursement – she’d read them during a statement at the start of the meeting as well. Here’s the section in its entirety:

B. COMPENSATORY SERVICE

In addition to the salary received by the Board of Commissioners, each member of the Board may receive a per diem payment of $25.00 and County mileage reimbursement from their residence or from their actual place of departure whichever is less from their CFA allotment for the following activities:

1. Attendance for a committee, subcommittee meeting or Working Session of the Board, when the member has been properly appointed to that committee or subcommittee, the meeting has been called in accordance with the Open Meeting Act, Public Act 267 of 1976, and the meeting has not been canceled twenty-four (24) hours prior to the scheduled time of the meeting and the Commissioner has not been notified of said cancellation within twenty-four (24) hours of the scheduled meeting.

2. Attendance at a meeting of a non-Board committee, subcommittee, commission, board, or attendance at a conference or convention as a representative of Washtenaw County when the member of the Board serves by appointment of the Board of Commissioners or the Chair of the Board.

3. For the purpose of receiving per diems, the Commissioner must be present for at least 1 hour or half of the meeting, whichever is less. Commissioners shall note their arrival and departure times on the meeting attendance per diem slip submitted to receive payments.

Any member of the Board of Commissioners may waive his/her per diem and/or mileage reimbursement by giving written notice to the County Clerk.

These are not difficult sentences to read, Judge noted, adding that she was sure that Ouimet had read them. When she was elected and started her term in 2009, Judge said she had looked at commissioner spending and questioned it. There was a line item for miscellaneous spending, for example – it totaled $12,278 in 2007, $7,075 in 2008 and $7,516 in 2009. Why hadn’t Ouimet cut that? she wondered. In 2009, when she first talked to deputy clerk Jason Brooks about what spending qualified for reimbursement, he referred her to the board rules, she said, but then told her that he’d have to approve whatever they submitted. That was like the fox guarding the henhouse, she said. There was a problem, she said, to the tune of thousands of dollars each year.

Judge said Boonstra gave her too much credit for bullying Kestenbaum – he’s not someone who could be bullied, but she appreciated the fact that Brewer thought she could. She said she’s not a minion of Mark Brewer, and has spoken to him only about four times. She said she’s never taken direction from Brewer, and never will. As for her own travel expenses, Judge said her $8,000 of travel to conferences has resulted in roughly $100,000 of tangible benefits to the county.

Finally, Judge noted that commissioners have to fill out forms to get reimbursed for mileage and to get their per diem. You have to take the time to do that, she said – it’s a choice. She asked whether it was OK to rob a bank, if you then gave the money to charity. It’s the commissioners’ responsibility to guard taxpayer money, she said, and if you follow the rules, you have nothing to hide. She concluded by saying that she’d brought commissioner spending under control.

[By way of background, starting in 2010, each commissioner has an annual flex account for expenses, capped at $3,550. A commissioner can only receive additional funds if another commissioner agrees to transfer unused funds from his/her account. [.pdf file of flex account rules] Flex accounts were voted into place in 2009, taking effect with the 2010 budget. From The Chronicle’s report of the June 3, 2009 board meeting:

The commissioners first considered a resolution to cut their own piece of the budget by 11.3%, and to create “flex accounts” that would pool previous line items for per diem, travel, and convention/conference expenses. The budget calls for $3,550 per commissioner for these flex accounts. The total budget for commissioners after the reduction is $532,885, an amount that includes salaries ($177,387), consultant fees ($55,150 for a lobbyist in Lansing), fringe benefits ($41,979) and an amount to cover administrative expenses (called the Cost Allocation Plan, at $143,462), among other things. The resolution also includes new guidelines for administering the flex accounts.

This resolution is the third iteration of an attempt to cut the commissioners’ budget, following two resolutions presented at the board’s May 20 meeting that did not receive sufficient support to pass. There was little discussion on the issue at Wednesday’s meeting.

Outcome: The motion carried, with Barbara Levin Bergman, Leah Gunn and Jeff Irwin voting against it.

At Wednesday’s meeting, several other commissioners weighed in on the issue of commissioner spending. Leah Gunn said she is a Democrat but didn’t agree with everything that the Democratic Party did. She has no control over what people say, Gunn added, and to accuse the Democratic commissioners of some nefarious plot against Ouimet was unfair. She recalled that Ouimet had served as her Ward 4 representative on the Ann Arbor city council some 20 years ago, and that she’d always found him to be upstanding and gracious. She noted that as a group, the entire board had addressed the $30 million budget deficit for 2010 and 2011. They had voted unanimously on the budget, and they had all worked to reduce commissioner spending.

Ken Schwartz characterized the situation as “Lansing politics” being brought to the county. He noted that the board has a track record of working together without divisive partisan politics, and that they’d all been surprised by the recent controversy. Though the Democrats are in the majority, they had elected Ouimet as vice chair of the board, and elected Republican Jessica Ping as chair of the board’s working session. He said it’s been great working with them both.

Rolland Sizemore Jr. said he didn’t like the kind of accusations he’d heard during public commentary, and that he agreed with Schwartz. They sometimes have little catfights and argue on the board, he said, but they work together and get things done. He said he’d been advised by the county’s legal counsel that he couldn’t stop people from speaking during public commentary. Sizemore said that if he could stop them, he guaranteed that he would.

Barbara Bergman said it had been a privilege to work with all the commissioners, and Ouimet in particular. Divisions on the board didn’t tend to go along party lines, she observed. They were more likely to be divided on issues like police services, where there were differences between commissioners who represented cities versus townships. She said the board worked together as a team.

In his response, Ouimet said it’s been a “very interesting process” to watch how people have reacted to this issue over the past two weeks. He restated what he’d said at the Oct. 6 board meeting – that he’d be happy to go over the expenses with the clerk’s office and repay anything if there was a discrepancy. He offered to put the disputed amount into an escrow account until the issue was resolved. Ouimet said that other commissioners knew him, and knew that any meetings he attended had been on behalf of his constituent base.

Judge spoke again, saying she agreed that the board had worked as a team. But she observed that she’d taken criticism in the past for her support of the flex spending account. She noted that when she had originally questioned the line-item budget for commissioners – which prior to 2010 had included line items for magazine subscriptions, books and a miscellaneous category, among other things – she’d been told she was micromanaging.

Act 88: Economic Development Tax

Earlier in the meeting, the board gave initial approval to levy 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 millage would be levied in December 2010 to be used in 2011.

The millage rate is slightly higher than what was passed a year ago, which raised $603,000 for use in 2010. The increased funding has been directed to the county’s department of economic development and energy, which will get $144,696 from the millage proceeds, compared to $87,000 allocated this year.

If given final approval, the millage funds will be allocated to the following groups [2010 funding is indicated in parentheses]:

• $200,000 to Ann Arbor SPARK ($200,000)
• $50,000 to SPARK East ($50,000)
• $100,000 to the Eastern Leaders Group ($100,000)
• $144,696 to the county’s department of economic development and energy ($87,000)
• $15,000 to fund a Michigan State University Extension agricultural innovation counselor for Washtenaw County ($15,000)
• $27,075 to fund horticulture programming for the Washtenaw MSUE horticulture educator ($27,000)
• $59,229 for 4-H activities, including allocation to the Washtenaw Farm Council for operating the Washtenaw County 4-H Youth Show & 4-H agricultural programming for the 4-H extension educator ($60,000)
• $15,000 to support the work of the Food System Economic Partnership (FSEP) ($15,000)

Act 88: Commissioner Discussion

Kristin Judge pointed out that she voted against the millage last year, and she’d be voting no again. It doesn’t mean that she doesn’t support these programs, she said. She praised Ann Arbor SPARK in particular, saying that the economic development agency is doing an amazing job. It’s short-sighted not to allocate funding for these programs out of the general fund, she said. [Until the budget that was passed in 2009, SPARK and other economic development programs received support out of the county's general fund budget.] It isn’t right to burden taxpayers with an extra tax for these programs, she said.

Jessica Ping said she’d be abstaining, since both Ann Arbor SPARK and SPARK East, a business incubator in Ypsilanti, are clients of hers. [Ping works for Paychex, a payroll processing firm.] If she were to vote, she said she’d vote against the millage, because it’s not the right time to be taxing residents. She cited a small business in Saline, which is in her district, that employs over 100 people – most of those employees live in Jackson, she said. The county needs to create an environment where businesses can grow, but also one in which people want to live, she said. It’s a small tax, but it adds up, Ping said, adding that if they want to increase taxes, they should put it on the ballot and let voters decide.

Mark Ouimet noted that he served on the board of Ann Arbor SPARK, and asked the county’s corporation counsel, Curtis Hedger, whether he should also abstain. Hedger clarified with Ouimet that it wasn’t a paid position, and said he didn’t see it as a conflict of interest.

Wes Prater also weighed in against the millage, saying the only taxes that should be levied are those approved by voters. He echoed Judge in saying that economic development programs should be supported with general fund dollars, and that he couldn’t support a tax that wasn’t voter-approved. “I just don’t think it’s right.”

Ken Schwartz asked the county clerk, Larry Kestenbaum, how much it would cost to hold an election on the millage. Kestenbaum said it cost about $1,200 per precinct, and there are 156 precincts in the county. If a measure were simply added to the ballot of an existing election, the incremental cost would be negligible, he said. [Kestenbaum later clarified in an email to The Chronicle that if a low-turnout standalone proposal were on the ballot, at least a dozen precincts likely would be combined, reducing the total number of polling locations to around 140.]

Schwartz also clarified that the amount of the tax works out to be 4.3 cents for every $1,000 of a home’s taxable value, or $4.30 for every $100,000.

Outcome: The board gave initial approval to the Act 88 millage, with dissent from Judge, Ouimet and Prater. Ping abstained, saying that Ann Arbor SPARK is a client of hers. The board is expected to take a final vote at its Nov. 3 meeting.

Resolution to Eliminate Commissioner Pension, Health Benefits

During the agenda time allotted for items for current or future discussion, Kristin Judge introduced a resolution to eliminate retirement pensions and health care for commissioners, effective Jan. 1, 2011. She noted that she had circulated the resolution via email prior to the meeting, though it was not on the agenda.

Commissioners, who are considered part-time county employees, are enrolled in the county’s Money Purchase Pension Plan (MPPP). They contribute 7.5% of their pre-tax wages to the plan, and get a matching 7.5% county contribution. In addition, they are eligible for lifetime health care benefits when they retire if they are at least age 60 and have served for eight years on the board, or if they are at least 50 years old and their age plus their years of service total 75.

The MPPP is a defined contribution plan, in which employers pay a set amount into the retirement plan while a person is employed. In 2008, the county shifted most employees out of the MPPP and into the Washtenaw County Employees’ Retirement System, known as WCERS, a defined benefit plan. In defined benefit plans, retirees receive a set amount per month during their retirement.

In addition to benefits, commissioners earn $15,500 annually. Officers receive higher pay: $18,500 for the board chair (Rolland Sizemore Jr.), $16,000 for the board vice chair (Mark Ouimet), $16,500 for the Ways & Means Committee chair (Conan Smith) and the working session chair (Jessica Ping).

By way of background, the issue of pension benefits was mentioned at the Jan. 6, 2010 board meeting:

Leah Gunn asked that they revisit the issue of getting the board out of the Money Purchase Pension Plan (MPPP). [Commissioners are the only county employees still participating in this defined contribution plan. Other county employees have been moved to the Washtenaw County Employees’ Retirement System, known as WCERS, a defined benefit plan.] A resolution to eliminate the county’s contribution for commissioners to the MPPP was pulled from the board’s Nov. 18, 2009 agenda, at Wes Prater’s request. Prater had asked that the item be moved to the board’s Jan. 20, 2010 meeting.

The issue was raised again at the board’s April 10, 2010 meeting, during a report to the board from Mark Kettner of the accounting firm Rehmann Robson, which conducts the annual audit of the county’s financial report:

Mark Ouimet asked about the county’s Money Purchase Pension Plan. He said that he and Gunn feel it’s time to close the plan and move the remaining $1.9 million in assets somewhere else. There are only a dozen people in the retirement plan – all of the county commissioners, and a judge. He asked Kettner to explain how it might be terminated.

Kettner said it was his understanding that commissioners couldn’t make changes to their salaries or benefits until the beginning of their next term.

Wes Prater objected, saying there needs to be some discussion about what to do with the pension plan. Nobody has convinced him that eliminating the plan is the best option. “I, for one, am not ready to go that route,” he said.

[Retirement benefits for most county employees have been shifted out of the MPPP, a defined contribution plan, to the Washtenaw County Employees’ Retirement System, known as WCERS, which is a defined benefit plan. Commissioners contribute 7.5% of their salary on a pre-tax basis to the MPPP and receive a 100% employer match. The county also contributes to a voluntary employee beneficiary association (VEBA) on behalf of each commissioner.]

Most recently, Gunn referred to her support of eliminating the MPPP in a comment thread on The Chronicle’s report of the board’s Oct. 6 meeting:

Once again, I will say that I proposed ending the MPPP (the Money Purchase Pension Plan, a defined contribution program that the Commissioners benefit from) last year, and I got violent pushback from Commissioners (whom I will not name out of courtesy). When I became a Commissioner, I asked to be excluded from this benefit, and was told that I had to take it. All Commissioners put in 7.5% and the county matches that. This year, with the county employees all in a different plan, this plan has only eleven members, the Commissioners. It is my understanding that a memo will be sent out soon to dismantle the plan and put Commissioners in a 457 deferred compensation plan, which will have no county match. Then, individual Commissioners can decide what they want to do – stay in the plan, roll it over to another tax deferred instrument such as an IRA, or pay taxes and cash out. I am hoping that all Commissioners will support the ending of this pension benefit. It costs about $10,000 a year to administer, and that is an expense we do not need to bear. I realize that $10,000 is a small amount, but we have already cut to the bone in our budget, and are in the position of looking at digits and perhaps limbs in the future. I am also willing to take a salary cut, and actually earn nothing, if my fellow Commissioners will agree to that. It is about public service, not about us.

A cover memo accompanying Judge’s resolution also mentioned the $10,000 annual fee that Prudential charges for administering the MPPP. In addition, during Wednesday’s meeting Judge noted that eliminating the pension would result in a $13,200 annual savings because the county wouldn’t be making a matching contribution. Eliminating health care benefits – medical and dental – would result in an additional $12,522 annual savings.

Judge pointed out that if they are re-elected on Nov. 2, two commissioners would be eligible to retain their pension and lifetime health care benefits if they retired by the end of the year. She did not name the two commissioners. [Responding to a follow-up email from The Chronicle, Judge clarified that only Barbara Bergman would be eligible.]

Judge said that residents in her district feel strongly that part-time commissioners shouldn’t get these benefits. They shouldn’t be expected to do the job for free, she said, but it’s time to let go of the benefits.

Outcome: No one seconded the motion, and it died without further discussion.

Ypsilanti District Library Millage

Linda Gurka, a member of the Ypsilanti District Library board of trustees, spoke during public commentary and urged commissioners and residents to support a millage increase that will be presented Ypsilanti District Library voters on the Nov. 2 ballot. Gurka was there to enlist general support for the measure – the county board of commissioners does not have purview over the question.

Because of declining property values and millage rollbacks triggered by the Headlee Amendment, the library has seen a 13% loss in revenue since 2008. They anticipate another 30% loss over the next three years, she said. Gurka described the library as a “jewel of the community,” and said that even as revenues declined, the demand for services has increased. They’re simply trying to bring revenues back up to 2007 levels, she said. A homeowner whose house is valued at $100,000 would pay $19 a year, or $1.60 per month.

More information about the millage is available on the library’s website.

Ypsilanti District Library Millage: Commissioner Response

Several commissioners praised the library, and said they supported the millage increase.

Ronnie Peterson, whose district includes Ypsilanti and parts of Ypsilanti Township, said he appreciated the leadership of the library board, which he characterized as aggressive. Its management is the best they’ve ever had. Many communities have closed their libraries or reduced services, he noted, and they needed to spread the word about the importance of libraries, not just in Ypsilanti, but throughout the county.

Leah Gunn, a former librarian, praised the library for its support of the nonprofit Washtenaw Literacy. “I may be from Ann Arbor, but boy, I love the Ypsilanti District Library too,” she said.

Ken Schwartz, whose district includes Superior Township, told Gurka that the library needs to provide a map of the district on its website and in its literature. He said the township had voted several years ago to join the library system, but that many residents still didn’t know they are a part of it.

Saying he supported the library, Rolland Sizemore Jr. also reported that the library’s geo-caching isn’t quite right – that information came from his grandson, he said,”so please check that.”

Coordinated Funding Model for Human Services

At its Oct. 7, 2010 working session, the board was briefed on a proposed coordinated funding model involving the Washtenaw United Way, Ann Arbor Area Community Foundation, Washtenaw County, the city of Ann Arbor and the Urban County. Those five entities provide about $5 million annually for local human services nonprofits. Already, the county and city of Ann Arbor coordinate their funding via the office of community development, a joint county/city department led by Mary Jo Callan.

The proposed public/private model would focus funding on six priorities that have been identified for the entire county: housing/homelessness, aging, school-aged youth, children from birth to six, health and food.

The board of commissioners is expected to vote on the proposal later this year, likely at their Nov. 3 meeting.

Coordinated Funding: Public Commentary

Todd Clark, president of United Bank & Trust’s Washtenaw operation, said he was there to strongly support the proposed coordinated funding strategy. He noted that he is co-chair of the United Way of Washtenaw County‘s fundraising campaign and serves on the board of SOS Community Services, so he sees the perspectives of both the funders and the nonprofits seeking funding. The bank is also a large funder, he said, contributing about $100,000 annually to local nonprofits, and about 5,000 hours of employee time.

Clark said the four guiding principals of the coordinated funding strategy really resonated with him: 1) focusing on the consumer of services, not on the organization that provides the services, 2) creating savings and improving the process for funders and service providers, 3) leveraging the assets and strengths of each funding organization, and 4) providing a model of cooperation and collaboration. If funders can do this, he said, it will carry through to other organizations. He noted that one example of current collaboration that’s already providing a benefit to consumers is a waiting list for the homeless that’s being managed by SOS, the Shelter Association of Washtenaw County and the Salvation Army. Clark urged commissioners to support the funding model.

Coordinated Funding: Commissioner Response

Leah Gunn, Kristin Judge and Mark Ouimet all commented that they support the coordinated funding approach. Ouimet noted that he sits on the board of United Way, and that they spend a lot of time and energy trying to figure out how to allocate funding. The coordinated model is a better way to do that.

Conan Smith said he’s close to one of the board members at SOS, and he commended Clark for dealing with that “unruly bunch.” [Smith is married to Rebekah Warren, who serves on the SOS board.]

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

Next board meeting: The next regular meeting is Wednesday, Nov. 3, 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]

The working session also included a presentation by executives of the Southeast Michigan Council of Governments (SEMCOG) and a brief update on the progress of the jail expansion. This report focuses on the health benefits presentation.

Cost of Health Benefits

Jennifer Watson, the county’s budget manager, began the report by giving an overview of current costs and a comparison of expenses over the past five years in the major categories of health care: medical, dental, life insurance and long-term disability. Medical costs are the largest expense, projected to be $19.779 million in 2010 – an amount that includes coverage of about 1,350 employee positions as well as about 700 retirees. That cost represents a 33% increase from $14.833 million in 2005.

Washtenaw County employee health care costs from 2005 to 2010. (Links to larger image)

Dental costs climbed 19% during that five-year period, from $1.09 million in 2005 to a projected $1.3 million this year.

However, medical and dental costs were even higher in 2009 – $22.8 million and $1.44 million, respectively. Union concessions and a shift from HMOs to Blue Cross/Blue Shield PPOs accounted for much of the cost savings in 2010.

The health benefit costs include amounts paid by the county as well as modest employee contributions. Most union employees pay no contribution toward their health care. However, all of the county’s 184 non-union employees contribute $600 annually. Members of four unions – representing a total of 51 employees – pay $400 annually. Those include members of the Assistant Prosecutors Association, the Public Defenders Association, and two bargaining units of the Michigan Nurses Association. There are 17 bargaining units representing county employees, and each negotiates its own contract with the county.

The county is self-insured for its medical and dental costs, buying its coverage through Blue Cross/Blue Shield – that company is projecting significant annual increases in the coming years, Heidt said. In addition to standard benefits offered by the county, employees can choose to buy additional optional coverage, at their own expense.

Impact of Federal Reforms

Going year by year, Heidt outlined several changes anticipated from recently passed federal health care legislation. Starting this year, the county will be reimbursed for part of the health care costs for retirees over the age of 55 who aren’t yet eligible for Medicare. Only $5 billion in subsidies were available nationwide and employers had to apply to be selected. Heidt said that the county’s application was accepted, and reimbursement began in July.

In 2011, employers must extend coverage to the married or unmarried dependents of their employees through the age of 26, unless the dependent is covered under another plan. This is expected to add a 1% to 1.5% cost increase, Heidt said.

Also in 2011, employers will be expected to offer plans that include preventive health care services. This won’t impact the county, Heidt said, because their coverage already includes preventive care. Nationwide, the change is expected to increase costs for employers by 3.5% to 4%, she said.

An additional change next year is that health care plans can’t put lifetime dollar limits on certain coverage. However, the county has never had an employee hit their lifetime limits, Heidt said, so she doesn’t expect this to be a factor. Also starting next year, employers will be required to enroll their workers in a new public long-term care program starting in 2011, unless the employee opts out. It will be paid for through a mandatory payroll deduction.

Fewer details are known about changes coming in 2012 and beyond, Heidt said. There will be significantly more reporting requirements to the federal government in 2012, she said, and in 2013 there will be a new Medicare payroll tax for people with wages over $200,000 for individuals or $250,000 for joint filers.

One fairly significant impact would occur in 2018, Heidt noted, when the county would be required to pay a 40% excise tax on its health coverage, which is considered a “Cadillac” plan by the federal government. A “Cadillac” plan is defined as a plan in which the aggregate annual value of an employee’s health coverage exceeds $10,200 for an individual or $27,500 for a family. Heidt said they’ll need to decide how to address this issue in the coming years.

Heidt also informed commissioners that as part of their open enrollment this fall, the county would be doing a complete audit of its employees to determine whether dependents that are claimed for coverage are actually eligible. She said that typically, up to 12% of employees in an organization have ineligible dependents covered by their health care plan. It’s possible that savings from this effort will amount to 5% of the county’s overall health plan.

Heidt also described a fringe benefit workgroup that’s being formed, with representatives from most of the county’s labor groups. It’s in preparation for contract negotiations that will begin next year, she said, and will be a comprehensive review of benefits. The idea is to make sure that everyone has an understanding of how costs are derived for benefits. The effort will start later this month, and likely continue through mid-2011.

Commissioner Comments, Questions

Leah Gunn asked whether the reimbursement for retiree health coverage would save the county money. Heidt said they expect that it will – retirees account for about 30% of the county’s total health care costs. The federal program will reimburse employers 80% of the cost per retiree in excess of $15,000 and below $90,000.

Gunn asked if they had any details about the long-term care coverage that would be required in 2011. Heidt said that it’s one of the things they know very little about – it hasn’t been defined by the federal government. She said she’d update the board as details emerge.

Jessica Ping said that the company she works for has a wellness program, which offers incentives when employees do certain things, like quit smoking or get regular cholesterol testing. She wondered whether the county had explored offering something similar. Heidt said they’d looked into it, but that there are significant upfront costs for these programs. It would likely be three to four years before they’d see a return on that investment, she said.

Wes Prater asked for more details about the dependent audit that the county planned for this fall. He wanted to make sure that employees are informed about it. Cheyenne Cooper, the county’s benefits manager, told Prater that employees would be asked to provide some kind of validation, such as a birth certificate, to prove that their dependents are eligible for coverage. She said they would be communicating with employees well in advance. The county’s roughly 700 retirees won’t be part of this audit.

Kristin Judge said that she’d like to see more consistency among the different employee groups – among the unions, as well as with non-union employees. Heidt said it was one of the administration’s goals, too. Judge clarified that if an employee waives the insurance benefits, they’re entitled to a cash stipend.

Judge noted that the National Association of Counties (NACo) had been active in developing the federal health care legislation, and that the organization had resources that Washtenaw County – as a member – might tap. She also urged the human resources staff to be sensitive in their audit of dependents, saying she didn’t want employees to be embarrassed.

Mark Ouimet asked whether the county had identified a total aggregate amount that they’d be able to afford for employee health benefits. Heidt said that they hadn’t approached it that way, but that she’d appreciate direction from the board as they tackle the 2012-13 budget deficit. Ouimet praised the staff for being forward-thinking on this issue.

Ken Schwartz commented on the 40% excise tax, saying it seemed counter-intuitive that the federal government would want to tax good benefits while at the same time encouraging employers to offer better benefits. Heidt said that the county has eight years to explore its options.

Ping asked whether the county had considered increasing the premiums that employees pay, noting that $600 and $400 annually is “nothing.” [For many employees, those contributions are negotiated as part of their union contracts. Most county employees with union contracts make no contributions to their health care costs.]

Prater noted that the fringe benefits workgroup provided an opportunity to establish a standard for benefits, and to include benefits in a discussion about total compensation. It’s important that employees understand that the more they receive in fringe benefits, the less they’ll get in salary increases. He pointed out that the county will be facing some very difficult times in the coming years.

UM president Mary Sue Coleman, right, talks with Olympic silver medalist Meryl Davis, left, while regent Martin Taylor looks on. Davis is one of four ice dancers who attend UM and who competed in the winter Olympics. (Photos by the writer)

During the less rambunctious portions of the meeting, regents approved two building renovations – at the Duderstadt Center and Lorch Hall – totaling $3.8 million. They also authorized the awarding of six honorary degrees at the May 1 commencement ceremony, including one to the keynote speaker, President Barack Obama.

The main presentation of the afternoon came from Laurita Thomas, associate vice president for human resources, who updated regents on the status of employee benefits.

At the end of the meeting, one person spoke during public commentary. Ann Arbor resident Rita Mitchell urged regents not to proceed with the Fuller Road Station project, a joint UM/city of Ann Arbor parking structure and transit center planned on city-owned land near the university’s medical campus. She argued that the project violated both the spirit and intent of a city charter amendment passed in 2008, which requires voters to approve the sale of city parkland.

Thursday’s meeting was in its usual location – the boardroom in the Fleming administration building, on Thompson Street. UM president Mary Sue Coleman reminded regents that next month’s meeting will be held in a different venue: the city of Grand Rapids.

U.S. Olympians: “Proud Wolverines”

During her opening remarks, UM president Mary Sue Coleman alerted regents and others in the room that they’d be joined later in the meeting by the four UM students who had competed in the winter Olympics. Meryl Davis, Charlie White, Emily Samuelson and Evan Bates were on their way over after finishing practice, she said, in preparation for the upcoming World Figure Skating Championships, held March 20-29 in Torino, Italy.

Several minutes later, as Laurita Thomas – UM associate vice president for human resources – was wrapping up a presentation on employee benefits, the four Olympians quietly slipped into the room, taking seats that had been reserved for them behind the board table. They listened politely as Thomas concluded her description of health plan aggregate cost sharing and retiree contribution levels.

University of Michigan regents get ready to pose for photos with students who competed in the winter Olympics. Front row, from left: Denise Ilitch, Andrea Fischer Newman, Julia Darlow, Meryl Davis, Charlie White, Emily Samuelson, Libby Maynard. Back row: Andy Richner, Evan Bates, Martin Taylor.

But as soon as Thomas was done, Coleman introduced the skaters and they stood up to a round of applause. Coleman told them that they’d not only represented the United States well, but also “the maize and blue.” She added: “You just did us all proud.”

Regent Andrea Fischer Newman went up to the podium to read the text from a certificate of recognition that each of the skaters received. She said that as soon as she had received an email announcing that they’d be coming to Thursday’s meeting, she had immediately emailed back, asking if she could make the presentation. “That’s the science behind getting to do this,” she joked. After Newman read the text of the certificate, regents and university staff gave the students a standing ovation.

The four Olympians spoke briefly. Meryl Davis thanked the regents for  the recognition. Her partner and fellow silver medalist, Charlie White, explained his choice of sport: “At a young age, I knew I probably wasn’t going to make the football team,” he quipped. He noted that they were among the very few figure skaters who went to college, and they were proud of that.

Evan Bates said he was born and raised in Ann Arbor, and has always been a huge Michigan fan. “We do take the block M wherever we go,” he said. Emily Samuelson, who partnered with Bates to place 11th in the ice dancing competition, said they’d received incredible support from the entire campus: “We’re proud to be Wolverines!”

Regents then took a 15-minute recess from their meeting to talk with the students, take photos and try on their medals. “It’s the nicest piece of jewelry I’ve ever seen,” Denise Ilitch said.

HR Benefits Update

Earlier in the meeting, Laurita Thomas gave regents an update on the university’s employee and retiree benefits. UM president Mary Sue Coleman introduced her by noting that she’d been with the university for 38 years, and knows every facet of its human resources operation.

Laurita Thomas, UM associate vice president for human resources.

For fiscal 2010, the university will contribute a projected $554.4 million toward its benefits plans, Thomas said. That includes $297.35 million for employee health benefits covering 89,140 people. That amount is growing, she said.

Rate increases, compared to national trends, have been kept relatively low, she said. That’s due to several factors, including a decision to handle their prescription drug program internally, and the sale of M-Care, as the university moved to become self-insured – a change saved about $15 million annually.

The university also has seen an increase in the rate of generic drugs that are used – from 46% in 2003 to more than 70% last year. Each percentage increase in that rate decreases drug expenses for the university by $450,000, Thomas said.

UM is also keeping costs down by increasing the amount that its employees pay. Over the next two years, the university is gradually implementing a 70% (UM)/30% (employee) cost-sharing split, compared to a previous 80%/20% split for health care premiums and co-pays. The change is expected to save the university $31.3 million annually by 2011. Thomas noted that UM is using a salary index to calculate payments, meaning that employees on the lower end of the pay scale are paying less.

Other benefit changes include a modified retirement savings plan, which now requires a one-year waiting period before starting the 10% university match for faculty and staff retirement contributions. That change will save the university $8.3 million this year, and $11 million annually in 2011 and beyond.

Thomas reported that a committee was appointed in January to review retirement health benefits. They’ll be looking at ways to reduce costs, which at this point far exceed the market, she said. The committee will be making recommendations to benefit changes, as well as suggestions for how to implement those changes.

Looking ahead, Thomas said that employees will likely be asked to pay different rates for their health care, depending on what they do to reduce their risk factors. Incentives could be lower rates for premiums and co-pays.

Thomas also indicated that the university will be issuing requests for proposals (RFPs) for most benefits they offer, in order to secure more favorable contracts with vendors.

After her presentation, Coleman and several regents praised Thomas for her work. Coleman said that in addition to controlling costs, the university was also finding ways to encourage its employees to be healthier.

Olivia Maynard recalled that previously when benefits changed, she and other regents were inundated with complaints. This time, she didn’t receive any emails or phone calls: “That says it’s working.” Andrea Fischer Newman joked that they were not suggesting they wanted more emails.

Thomas credited the university’s union leadership, saying that six of the seven unions agreed to the changes in benefits because they understood it was in the best interests of their members.

Tim Slottow, UM’s chief financial officer, wrapped up the presentation by recognizing Marty Eichstadt, UM’s director of benefits, who also attended Thursday’s meeting. He noted that she’ll be retiring in June, and thanked her for her leadership.

Honorary Degrees

UM president Mary Sue Coleman read through a list of six people who’ll be receiving honorary degrees at the university’s May 1 commencement ceremony. They are:

• Jean Campbell, founder of the Center for the Education of Women
• Ornette Coleman, a jazz musician
• Barack Obama, current U.S. president
• Stanford Ovshinsky, president of Ovshinsky Innovation
• Susan Stamberg, a public radio journalist
• Charles Vest, president of the National Academy of Engineering

“We’re very excited about all of them,” Coleman said. Regents approved the awarding of the degrees, without comment.

Building Projects: Sealing Up “The Dude”

Regents approved two building projects, at the James and Anne Duderstadt Center and at Lorch Hall.

A $2.2 million project at the Duderstadt Center, located on UM’s north campus, will deal with the underlying cause of damage to soffits in the building that have been weakened by air infiltration and water condensation. Unless the problem is addressed, the soffits are at risk of falling off the building, according to a memo on the project.

In discussing the project, Tim Slottow – the university’s chief financial officer – described it as “basically to seal up The Dude.” Workers will install a vapor barrier and air barrier, add thermal insulation and upgrade the building’s mechanical systems.

Regent Larry Deitch wondered why the work needed to be done on a building that’s “relatively new.” Hank Baier, associate vice president for facilities and operations, said that though they think of it as new, it was built in 1995.

There was no question about the age of Lorch Hall, which was built in 1928. Regents authorized a $1.6 million project to do masonry and steel repairs, roofing repairs, and repair of damaged rain conductors. The building, at 611 Tappan, houses the departments of economics and linguistics.

Other Misc. Reports and Actions

Thirteen items required regental approval because of potential conflict-of-interest issues – all were approved in one vote, with no discussion. The majority related to contracts that in some way involved university employees. One item involved the purchase by the university of a piece of multi-media artwork created by UM faculty member James Cogswell Jr. – the work will be displayed at the Ross School of Business.

In a slight departure from the norm, the board’s finance, audit and investment committee report was given by regent Olivia Maynard, rather than the committee’s chair, Katherine White. Maynard noted that White had to miss the meeting because she was performing her civic duty – sitting on the city of Ann Arbor’s board of review. [The Chronicle covered a board of review meeting in 2009 on which White's father, Robert White, served.]

Thursday’s meeting was the final one for Michigan Student Assembly president Abhishek Mahanti, who noted that MSA elections will be held within the next month. However, he said he plans to attend the board’s next meeting in Grand Rapids, to introduce his successor. He received a round of applause from regents at the conclusion of his remarks.

Public Commentary

Ann Arbor resident Rita Mitchell was the only speaker during public commentary. She discussed the Fuller Road Station, a joint project between the university and the city of Ann Arbor. [James d'Amour, who also lives in Ann Arbor, had attended the regents' January meeting and spoke on the same subject.]

Rita Mitchell, an Ann Arbor resident, urged regents to reconsider the Fuller Road Station project.

Mitchell noted that in 2008, city voters had overwhelmingly approved a charter amendment requiring that the city get voter approval before selling parkland. By building a parking structure on city-owned land that’s designated as parkland, the project will irreversibly re-purpose that land without voter approval, she argued.

Mitchell acknowledged that the university has leased the site for several years, but said that a parking lot is reversible construction, while a structure is not. She also argued that the university’s payments to the city will be lower for Fuller Road Station than they have been to lease the surface parking lot – it’s a “gross undervaluing of the land,” she said.

Her main concern, however, was that the project would set a precedent for re-purposing parkland. It was coming at a time when city officials are saying they anticipate a $5 million deficit and budget cuts, she said, yet the city will be paying more than $14 million for the project, plus 22% of future operating costs. “I am seriously concerned with an arrangement for a project that would jeopardize the financial health of the city which hosts the university,” Mitchell said. “Our mayor told us that he does not yet know the source of the city’s funds for the project.”

She also questioned whether a later phase of the project – a train station for commuter and high-speed rail – will ever materialize. What’s more, she said, the project runs counter to the university’s sustainability efforts, as it will pollute the air, water and night-time light.

Mitchell offered four options as alternatives to the Fuller Road project: 1) use university-owned land for parking, 2) pay fair-market value for the land, 3) take a public vote on whether to sell the land, before re-purposing it, and 4) work with university engineers and experts to reduce the overall need for parking.

As part of her presentation, Mitchell gave regents a handout showing two photos of the site, at night and during the day, and asked them to imagine it with a large parking structure in place. The handout reads: “Fuller Park: Is it a noun or a verb?”

Present: Mary Sue Coleman (ex officio), Julia Darlow, Larry Deitch, Denise Ilitch, Olivia Maynard, Andrea Fischer Newman, Andy Richner, Martin Taylor, Kathy White

Next board meeting: Thursday, April 15 in Grand Rapids [details to come]. The meeting begins at 1:30 p.m. at the Amway Grand Plaza Hotel, 187 Monroe Avenue Northwest, Grand Rapids.