A land bank is a mechanism for the county to take temporary ownership of tax- or mortgage-foreclosed land while working to put it back into productive use. “Productive use” could mean several things – such as selling it to a nonprofit like Habitat for Humanity to rehab, or demolishing a blighted structure and turning the land into a community garden.

The board has made attempts in the past to start a land bank, and actually formed one in the summer of 2009. But after commissioners were unable to resolve issues related to governance and funding, they voted to dissolve the land bank in March of 2010. Only three current commissioners were on the board at that time: Ronnie Peterson, Rolland Sizemore Jr. and Conan Smith.

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

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

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

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

Washtenaw County treasurer Catherine McClary, right, talks with deputy county administrator Bill Reynolds before the start of the Feb. 16, 2011 board of commissioners meeting. McClary delivered her annual treasurer's report during the meeting. (Photos by the writer.)

Ronnie Peterson started that debate by advocating for holding the board’s budget retreats and administrative briefings at the boardroom table, where they can be televised. The meetings are open to the public, but are more informal and not available on Community Television Network or online webcasts. The ensuing discussion revealed different perspectives on what kind of environments are most conducive to deliberations. At one point, board chair Conan Smith – who opposed a change of venue – argued that deliberations aren’t subject to the state’s Open Meetings Act. The county’s attorney, Curtis Hedger, advised the board that, in fact, deliberations do need to occur in open meetings, with limited exceptions allowed in closed sessions.

After roughly 90 minutes of debate, the board voted – with Smith dissenting – to hold future budget retreats in the boardroom following their bi-weekly working sessions. The retreats will be televised. An effort to relocate and televise administrative briefings failed, however, with support only from Peterson, Kristin Judge and Wes Prater.

In other business, the board appointed three staff members to a review committee that’s part of a new coordinated effort for funding human services nonprofits in the county. During a presentation by Mary Jo Callan – head of the office of community development, which is overseeing this process – Peterson expressed concern that smaller, community-based nonprofits will be unable to compete in this new system. Callan assured him that she understood his concerns, but felt that this new model could actually be better for those nonprofits. She noted that the board would ultimately control funding decisions for county dollars.

Catherine McClary, the county treasurer, delivered her annual treasurer’s report, giving an update on the county’s investment portfolio, delinquent taxes and foreclosures. She reported that the amount of residential tax foreclosures appears to be stabilizing, but foreclosures of commercial property are on the rise, especially for parcels of vacant, undeveloped land. Separately, the board approved the treasurer’s annual request to borrow funds – up to $50 million this year – to temporarily cover delinquent taxes in the county’s 80 taxing jurisdictions. Last year, there was about $29 million in delinquent taxes, and McClary expects a small increase this year.

McClary also told commissioners that later this year she’ll be asking them to approve a civil infractions ordinance for dog licenses, as part of a stepped-up enforcement effort. Right now, not having a license is a criminal misdemeanor of 90 days in jail or a $500 fine.

During Wednesday’s meeting commissioners also delivered several liaison reports, including news that the Washtenaw County Parks & Recreation Commission had approved $600,000 for the Connecting Communities trail program. Part of those funds will support a project that will eventually link Saline and Ann Arbor through a non-motorized pathway. The commission also authorized $250,000 to build a boathouse and fishing dock at Ford Lake, in partnership with the state and Eastern Michigan University.

Coordinated Funding for Human Services

On the agenda was a resolution to appoint three representatives to a review committee that will help award human services funding to local nonprofits through a coordinated funding approach. The appointees are: Hazelette Robinson, community relations director for the Washtenaw Community Health Organization; Susan Sweet Scott of the county’s Employment Training & Community Services (ETCS); and Michael Smith of the county’s veteran affairs office.

The funding process coordinates the efforts of five major funders: the city of Ann Arbor, Washtenaw County, the Urban County, Washtenaw United Way and the Ann Arbor Area Community Foundation. It is being managed by the joint county/city of Ann Arbor office of community development, led by Mary Jo Callan, who gave a presentation to county commissioners at their meeting.

Coordinated Funding for Human Services: Public Commentary

Julie Steiner, executive director of the Washtenaw Housing Alliance, thanked commissioners for their support of safety-net services. Washtenaw County is a leader, she said, because it understands the importance of nonprofits in providing those services. She said the WHA has seen benefits from the coordinated funding approach that’s being managed by the office of community development.

The WHA has 27 member organizations all working on housing and homelessness-related issues. About two years ago, they came up with a list of shared outcomes, Steiner said, which help in their goal of being transparent to the community regarding how tax dollars supporting these organizations are spent. [.pdf of WHA outcomes] Saying she’d bring the board a more detailed report in the future, Steiner ticked through several outcomes identified by the group, including: (1) reduce the number of people who become homeless; (2) reduce the average length of stay in local shelters; (3) increase the number of homeless people who get permanent housing; (4) increase the percentage of people who stay in permanent housing for at least 12 months and 24 months; and (5) reduce the number of formerly homeless people who become homeless again. Steiner praised the staff of the office of community development, saying they were a great help in developing a database to track this information, and in training nonprofits in how to use it.

Joan Chesler introduced herself as coordinator for the Washtenaw Alliance for Children and Youth (WACY). The group was formed just a couple of years ago, she said, and is in a planning and coordination phase using the national model called Ready by 21. [See Chronicle coverage: "Alliance Focuses on School-Age Kids"] The intent is to do some big-picture thinking about what groups are serving these children, what problems exist and what resources can be used to address those problems. They’ve developed some shared outcomes as well, and are looking at ways to coordinate services. It’s a long-term effort, she noted.

Several commissioners had comments and questions for Chesler and Steiner. Barbara Bergman said she hadn’t heard of WACY and wanted more information – as did other commissioners. When Rob Turner told Chesler that he still didn’t really understand what WACY did, she responded that they were just getting started – she could share their goals and plans, but those hadn’t been realized yet. Kristin Judge assured them that addressing homelessness and supporting youth are priorities for the board, and that commissioners are also fans of the OCD and Callan.

Wes Prater said he was glad to see the WHA’s focus on performance outcomes, and asked that Steiner provide a report to the board when it’s available. Steiner said they’ve just formed a new data leadership team – they’ll seek input on crafting benchmark data, with regular reports annually.

Ronnie Peterson said it was good to see Chesler “back in action.” [She previously served as executive director of the Corner Health Center in Ypsilanti.] He hoped they could schedule a working session on the issue of services for youth in the near future, and said it was important that the county departments get behind these types of consortiums to support them.

Coordinated Funding for Human Services: Presentation

Mary Jo Callan, head of the office of community development (OCD), began her presentation by introducing three county employees who were nominated for appointments to a funding review committee. The committee, part of a new coordinated funding model, will evaluate proposals from local nonprofits seeking financial support from five major funders: the city of Ann Arbor, Washtenaw County, the Urban County, Washtenaw United Way and the Ann Arbor Area Community Foundation.

Susan Sweet Scott, left, talks with Mary Jo Callan, head of the Washtenaw County/city of Ann Arbor office of community development. Sweet is an administrator with the county's Employment Training & Community Services (ETCS).

Susan Sweet Scott of the county’s Employment Training & Community Services has been with the county 22 years, and leads the community services portion of Employment Training & Community Services (ETCS). Hazelette Robinson, community relations director for the Washtenaw Community Health Organization, is another long-time county staffer, with a 19-year tenure. The third appointee was Michael Smith, who leads the county’s veteran affairs office.

Not only do these three people bring their experience to the review process, Callan said, but they will also take away a better understanding of the programs and services available outside of county government.

She then gave a presentation she’s delivered many times over the past year – an explanation of how the coordinated funding model works. [The county board voted to join the partnership at their Nov. 3, 2010 meeting. Callan had briefed them on the project at an Oct. 7, 2010 working session. She has given similar presentations to the Ann Arbor city council and Urban County executive committee, in addition to other groups.]

Though Conan Smith jokingly asked whether she was tired of talking about it, Callan replied that it might be the commissioners themselves who were tired of the topic. However, she noted that four new commissioners had joined the board since she’d last spoken to them, and she hoped this overview would answer any questions they had.

The county has a strong safety net of social services, through local government programs and nonprofits, she said, but it’s been handled in a shattershot way. They haven’t gotten the most out of their investments, and this coordinated approach attempts to focus on community priorities in a coherent way. It involves entities that are already planning and coordinating efforts for specific areas – like the Washtenaw Housing Alliance and Success by Six – along with major funders and the programs that directly serve people in need. There’s also a piece for strengthening the nonprofits themselves, funding “capacity building” needs like staff training, financial software or paying for mergers between two nonprofits.

The funding model focuses on these key areas: housing/homelessness, seniors, school-aged youth, children from birth to six, and health/nutrition.

Most of the dollars will be used for programs and services, Callan said. For the funding cycle that begins July 1, 2011, they hope to have just over $5 million as a “baseline investment”: $2.7 million from the three government entities, $2.3 million from United Way and $300,000 from the community foundation. Obviously, a lot can change in terms of available funding, she noted – both the city of Ann Arbor and Washtenaw County are working to address budget deficits in their coming fiscal years, and the Urban County faces cuts from federal funding it receives. [Chronicle coverage of possible reductions in human services allocations by the city of Ann Arbor: "Ann Arbor 2012 Budget: Parks, Plan, People"]

The process will be streamlined, Callan said. Instead of five applications for funds, there’s one. The same is true for the review process and final recommendations – there will be one set. However, the governing boards of each funding entity will retain control over how their dollars are allocated. Callan noted that they’ll be making those decisions in the context of what all partners are doing, and her hope is that everyone will look in the same direction, with the same strategy to achieve the same measurable outcomes.

Benefits include leveraging the funders’ investment, Callan said – for every dollar that’s invested, local nonprofits bring in $10 from state, federal and private funders. The coordinated approach is also minimizing duplication of efforts for both nonprofits and funders, and maximizing the effectiveness of their investments. She said her office has already seen benefits from previous coordination of funding by government entities, in terms of saving roughly 600 hours of staff time – those benefits will be even greater, with additional partners.

After getting approval from the governing boards of all five funders last year, the application process for the next funding cycle has already begun. Nearly 60 nonprofits applied to the first phase of the application process, in which they were asked to supply basic financial and governance documents. Of that group, 51 were qualified to respond to a request for proposals (RFP) that was issued Jan. 28. The deadline for applying is March 4, with reviews conducted in March and early April, and recommendations presented to funders in April and May.

For the county, funds will be invested in programs that reflect the board’s priorities, Callan said: school-aged youth (37%), pre-school children (19%), “safety net” health (22%), housing/homelessness (15%), aging (4%) and hunger relief via Food Gatherers (3%).

The need is great, Callan said. Unemployment remains stubborn, poverty has increased – an estimated 10,000 children and 2,000 elderly live at poverty levels in Washtenaw County – and roughly 8% of county residents are uninsured.

Coordinated Funding for Human Services: Commissioner Comments

Ronnie Peterson began by asking whether the guidelines given to nonprofits who applied for funding were the same as those used by United Way – he said it would have been useful for the board to see those guidelines. Callan said she’d send the board a copy. They aren’t identical to the United Way guidelines, but were developed with input from that agency.

Peterson, whose district covers Ypsilanti and parts of Ypsilanti Township, then asked if funds from the city of Ann Arbor only served Ann Arbor residents. Callan replied that the city supports agencies that serve residents in Ann Arbor, Ypsilanti and Pittsfield Township.

Peterson expressed concern about the status of smaller nonprofits, those that he called “community-based.” Sometimes those only have a couple of volunteers running a clothing bank or giving some other kind of assistance, he said. Years ago, the county set aside funds for those kinds of nonprofits, but over the years the funds have been going to larger, more “institutionalized” nonprofits, he said. He wanted to make sure the smaller nonprofits could compete within this new funding model.

He also asked whether the Ann Arbor city council or the county board could reject funding recommendations that are brought to them after the review process. It’s “absolutely within your power” to reject the recommendations, Callan said. If that happens, her staff would need to go back to the other funding partners and possibly reallocate the remaining funds. She said the county board has not historically done that – the board has in the past accepted the recommendation of the office of community development (OCD), and she would anticipate that to continue.

Peterson said the board hasn’t rejected recommendations since Callan joined the OCD, but in the past that did happen. He clarified that it would be possible to take 5% from one agency and shift it to another, for example. Callan said it would be possible, though she’d advise against it. She also told Peterson that she was aware of his acute concerns for smaller nonprofits, and felt that this model would actually be better for those groups. With capacity-building grants available for small nonprofits that provide a priority service, they could be strengthened, she said. And there’s nothing to say that small or innovative programs can’t get funded, she added, though there are minimum requirements – like having a functioning board, and meeting basic financial standards. The idea is that taxpayer dollars are accounted for.

Of course there should be accountability, Peterson said. He just wanted to ensure that nonprofits aren’t disadvantaged because of their size, and that the board has some flexibility in allocating funds. He noted that it’s unclear how much funding will be available from the county in 2012 and 2013. [The county faces a projected $20.9 million over that two-year period.]

Barbara Bergman said she supported the coordinated funding approach. It’s one thing if a small nonprofit can meet the criteria, she said, but the county isn’t a research organization – they’re not there to fund the development of someone’s good idea. They need to fund groups that demonstrate best practices. She said she won’t vote against the OCD recommendations: “I’m not willing to put a pot (of money) over here for my bright ideas.” Bergman added that it saddens and scares her that holes in the safety net are growing, and that the county can’t meet all the needs of its residents. She would hope that in the future, other funders would join the coordinated funding initiative, too.

Yousef Rabhi, whose district covers part of Ann Arbor, praised the city for funding work that serves other communities as well – it reflects the fact that Ann Arbor’s fate is tied to the fate of the county, he said. Referring to the statement that every dollar invested yields $10 in other funding, he asked Callan how much of that leveraged $10 goes directly toward programs and services. She estimated $7-$8. Wes Prater then clarified that a $5 million investment by the five funders would bring $35-40 million to the community from other sources. When Callan confirmed that it would, Prater replied, “Well, get going!”

Outcome: Commissioners unanimously voted to appoint Hazelette Robinson, Susan Sweet Scott and Michael Smith as county representatives to a review committee for the coordinated funding of human services nonprofits.

Delinquent Tax Borrowing

On the board’s Feb. 16 agenda was a resolution permitting the county treasurer to borrow against the amount of delinquent property taxes in all 80 taxing jurisdictions throughout the county, including cities, townships, schools systems and libraries, among others.

The process works like this: After Feb. 28, these jurisdictions turn their delinquent taxes over to the county – the first step in a long tax foreclosure process. The taxing jurisdictions are reimbursed for that amount by the county, and the county treasurer assumes responsibility for collecting the delinquent taxes. It’s a standard practice that’s conducted annually at this time of year. The funds that the county borrows – an amount not to exceed $50 million – are used for cash flow purposes, to fund operations for the first half of the year. The delinquent tax collections are receivables on the bonds.

Delinquent Tax Borrowing: Commissioner Comments

County treasurer Catherine McClary did not give a formal presentation about this request, though later in the board meeting she presented her annual treasurer’s report. However, some commissioners had questions on the bond issue.

Dan Smith thanked McClary, saying that as someone who previously served on a township board, he appreciated the fact that the county made the township whole early in the year. [Smith was a former trustee for Northfield Township.]

Conan Smith noted that the county covers the potential risk to other jurisdictions, and asked McClary to comment on how economic conditions are affecting this process.

McClary reported that the amount of delinquent taxes turned over to her office for collection has more than doubled in the past seven years. For the last two years, the county was not able to self fund the delinquent taxes. Last year, there was about $29 million in delinquent taxes, and she expects a small increase this year. But the request is to borrow the same amount as last year – an amount not to exceed $50 million. She commented that the figure “takes my breath away.” One change is that interest rates on the bonds will be higher this year than last year, due to the tightening credit markets.

McClary explained that every year, the treasurer’s office sets up a separate delinquent tax revolving fund, where money is deposited as the delinquent taxes are collected. If the county is unable to collect the taxes by year’s end, they charge back that uncollected amount to the taxing jurisdiction, charging them the same interest that’s charged for the bonds – last year, interest was around 2%, McClary said.

McClary characterized delinquent taxes as a leading economic indicator. For residential properties, it’s starting to level off, she said, but there are increases in commercial properties, and especially in undeveloped vacant land.

Yousef Rabhi asked about the cost of administering this process. Is that money recovered, or is that simply a service the county provides? McClary explained that state law requires a county’s general fund to pay for the salaries of the treasurer’s office. They don’t charge taxing jurisdictions an extra agent’s fee for handling the delinquent taxes – the county could do that, she said, but when she tried to bring forward a resolution to that effect last year, she was asked not to do it. There is interest charged on the delinquent taxes, she said – 1% per month for the first year, and 1.5% per month for the second year, plus a 4% administrative fee. Those funds are also deposited into the delinquent tax revolving fund.

When the bonds are paid off, any remaining money in the revolving fund is transferred to the county’s capital projects fund, to be used as the board and administration sees fit, McClary said. Last year, $5.5 million was transferred – double the amount that had been budgeted.

Treasurer’s Report

Every year, the county treasurer gives a report to the board. This year, commissioners began by giving Catherine McClary a round of applause – her presentation was the last major agenda item, and it followed an unanticipated, lengthy discussion by the board about how they handled their budget retreats and administrative briefings. [See report below.] They thanked her for her patience.

McClary described how her office manages the investment portfolio for the entire county – at the end of 2010, cash and investments totaled $147.545 million. That figure is invested in the following ways: $56.509 million in certificates of deposit (CDs) and money market accounts; $45.815 million in commercial paper; $35.660 million in U.S. treasuries and agencies of the U.S. government; and $9.561 million in bank accounts, including deposits in the Ann Arbor State Bank, Bank of Ann Arbor, Chelsea State Bank and Michigan Commerce Bank, among others. [.pdf file of two-page treasurer's report]

She clarified that the $147 million includes more than just the investments made using general fund money, which had only about $30 million in its account at year’s end. In addition to general fund monies, the total includes funds from the Washtenaw County Road Commission, Washtenaw Parks & Recreation Commission, funds from the water resources commissioner’s office, and the Washtenaw Community Health Organization (WCHO).

She reported that 2010 revenue from her office totaled $10.6 million, from five main sources: $737,602 from investment earnings; $6.262 million from delinquent taxes and fees; $3.539 million from the accommodation tax; $37,922 from dog licenses; and $24,971 from fees for tax searches.

Michigan’s Public Act 20 governs the types of investments that her office can make, McClary said, and decisions also conform to the board’s investment policies. The 2010 average weighted yield was 0.559% – “that’s not the best part of the presentation tonight,” she said, adding that nonetheless it outperformed the three-month Treasury benchmark of 0.12%.

The treasurer’s office is charged with safeguarding public funds, and they do that through diversifying investments and implementing strong internal controls, McClary said. Their other duty is to collect delinquent property taxes. These services raise money so that the county can fund its mandated activities, as well as support other programs that are board priorities – like those discussed earlier in the meeting, she said, for children, veterans, or others in need.

They do this with a staff of 11.5 employees, McClary said. They take receipt of a half-billion dollars each year, though much of that is a pass-through. For example, the treasurer’s office collects the Michigan education tax, which it passes on to the state. However, she noted, for the two weeks that the county holds those funds before passing them on, they were able to earn $30,000 in interest income.

McClary had spoken briefly about delinquent tax collection earlier in the meeting – when commissioners authorized her office to borrow up to $50 million to temporarily cover the cost of 2010 delinquent taxes for the county’s 80 taxing jurisdictions. She elaborated on the issue, saying that in order to get a top credit rating, it’s important that the county demonstrates strong management. The credit markets are tightening and rating agencies are especially scrutinizing public funds, she said. McClary reported that she’s working with county administrator Verna McDaniel and Kelly Belknap, the county’s finance director, to meet with the some of the major rating agencies, with the goal of ensuring that the county retain a top rating.

Regarding interest income, McClary acknowledged that the rates are very low, but the county’s earned income was well above the benchmark rate. Interest income on all county funds was $737,602 for 2010. The interest income for the general fund was considerably lower, she noted, in part because the amount of general fund dollars that can earn interest is low. At the end of the year, there was $30 million in the general fund account – of that, $17.5 million had been transferred in from the county’s revenue-sharing reserve fund.

McClary also reported on revenues from dog licenses, which totaled $37,922 in 2010. She thanked the board for approving a change last year that allows her office to issue multi-year licenses – that’s been well received by the public, she said. What’s not been as well received is an increase in the license fee, which was raised for the first time since 1981. [For spayed/neutered dogs, the fee is $12 for per year. It costs $24 per year for dogs that aren't spayed or neutered.]

Her office also collects fees for dog park licenses, and is working with the city of Ann Arbor and Washtenaw County Parks & Recreation to step up enforcement, McClary said. This spring or summer, she’ll likely be bringing a resolution to the board to adopt a civil infractions ordinance for dog licenses. Right now, not having a license is a criminal misdemeanor of 90 days in jail or a $500 fine, which McClary indicated is excessive. For a civil infraction, you’d simply be issued a ticket. The treasurer’s office is coordinating with Kirk Tabbey, chief judge of the 14-A District Court, who is interested in having the court help with collections, McClary said.

After adopting a civil infractions ordinance, a final step would be to conduct a dog census, McClary said. There are many unlicensed dogs in the county, she said, but without an ordinance in place, it doesn’t make sense to do heavy enforcement. She said they anticipate dog licenses will be a future revenue stream. They’re also exploring having a fee to pay for sheriff’s deputies who do kennel inspections, and perhaps adding a fee for checks that are returned for insufficient funds.

Treasurer’s Report: Mortgage and Tax Foreclosure Prevention

In additon to the financial overview, McClary reported on two programs that her office oversees: Mortgage foreclosure prevention and tax foreclosure prevention.

Efforts at tax foreclosure prevention aren’t supported by the general fund, she noted – it’s paid out of fees attached to a parcel after it enters foreclosure. Still, she thanked the board for approving the jobs in her office that deal with the program – including two social workers, who were probably the first social workers in the country to be hired by a county treasurer’s office, she said.

Each year, her office handles about 11,000 parcels with delinquent taxes. Her office works with owners to try to help them pay off the taxes, but that doesn’t always happen. Since 1999 – when action was taken on properties that had delinquent taxes from 1997 – the county foreclosed on 539 parcels. Of that total, 391 foreclosures occurred last year.

The properties that the county has lost money on – those that were sold at auction for a lower price than the delinquent taxes that were owed – were on undeveloped vacant land, McClary said. Right now, there are 900 parcels in the foreclosure process, McClary said, including 550 parcels of vacant land. She or her staff have talked to the owners and lenders on each of those 550 parcels, and at this point expect to collect on only 150 of them.

Regarding mortgage foreclosure prevention, the treasurer’s office only handles that directly when tax foreclosure is also involved. Beyond that, they partner with other agencies, including the Michigan State University Extension program and the county office of veterans affairs.

McClary urged people to contact her office if they needed help: either via email at taxes@ewashtenaw.org or by phone at 734-222-9595. Even if the county can’t help directly, her staff can refer them to the right resources, she said.

McClary described three waves of the mortgage foreclosure crisis. The first wave they saw was caused by predatory loans, which were easy to modify because interest rates were too high and they primarily affected vulnerable populations. The next phase concerned middle-class homeowners who had prime credit, but who lost their jobs and could no longer afford their mortage. These are the hardest to deal with, McClary said, because the income just isn’t there. The final phase are walkaways – owners who just leave their property because they owe more than the value of the parcel. That kind of foreclosure is the most detrimental to neighborhoods, she said, because the properties are simply abandoned.

Foreclosure prevention isn’t a mandated service, McClary noted, but with the board’s support, she said her office has been able to provide a valuable community service.

Kristin Judge noted that SEMCOG – the Southeast Michigan Council of Govvernments – recently released foreclosure data for counties in this area. Percentage-wise, Washtenaw is doing well compared to other counties, and she thanked McClary for her work.

Veteran’s Affairs

Commissioners gave initial approval to create a new full-time position – a veterans relief program specialist – as part of a minor restructuring in the county’s veterans affairs department. The restructuring includes downgrading an administrative assistant position to office coordinator. The moves are expected to result in about $20,000 in structural savings for the department. The board will likely take a final vote at its March 2 meeting.

The new position is estimated to cost $75,000 and will be funded from the indigent veterans relief fund, which gets proceeds from a dedicated millage and has a fund balance of $250,000. The job will entail coordinating the county’s veterans relief efforts and doing public outreach activities.

At Wednesday’s meeting, several commissioners praised the department and its leader, Michael Smith. All four of the board’s new commissioners – Dan Smith, Rob Turner, Alicia Ping and Yousef Rabhi – had visited the department recently, as part of an orientation tour of county facilities. They all applauded the staff’s efforts to assist local veterans. Ping cited the ability to leverage local dollars for state and federal funds, while Turner said the department served as an example of what he’d like to see all county units do – provide great services efficiently.

Rabhi asked about the percentage of staff salaries that are paid from the general fund, versus the veterans relief fund. Smith clarified that the percentages wouldn’t change. The general fund pays for 90% of his salary, 60% of the salary for analyst and service officers, and 57% of the department’s assistant – the millage pays for the rest. The percentages are based on the amount of time each staff member spends on indigent veterans relief activity – the millage can only fund those activities, he explained.

There’s been an increased demand for veterans relief, Smith said – that’s why the new position will be paid exclusively from the millage proceeds.

Smith gave credit to county administrator Verna McDaniel and her leadership as being an inspiration to him. The state has 19th and 20th century laws to take care of 21st century warriors, he said. Reservists are coming home to their communities with a plethora of problems, he said. Some counties haven’t even levied the veterans relief millage – Wayne and Macomb counties were sued over the issue, and Macomb still hasn’t levied it. Without those millage funds, Smith said, his department wouldn’t have been able to access the other resources it is tapping. He told the board they’d been brave to comply with Public Act 214, which authorizes the county to levy the millage without voter approval. [The 1/40 mill is expected to raise an estimated $362,415 this year. It was first passed two years ago, and cost homeowners $2.50 for every $100,000 of a home’s taxable value.]

Smith also told the board that he planned to offer internships later this year to disabled veterans who are pursuing degrees at local universities. The U.S. Dept of Veterans Affairs pays for such internships, he said – it would help the interns, provide more services to the local veterans community, and not cost the county.

Rabhi told Smith that the veterans affairs department had been his inspiration at the recent board retreat, when he’d suggested that the county provide help desk services to residents – he’d seen that model in action at Smith’s department.

Trial Court Memorandum of Understanding

Without discussion, commissioners gave final approval to a memorandum of understanding with the Washtenaw Trial Court, outlining the rights and responsibilities of each unit of government. Initial approval was given at the board’s Jan. 19, 2011 meeting, which included a presentation by chief judge Donald Shelton. A previous MOU expired in December 2010.

As part of the agreement, the county will fund operations of the trial court in four “lump sums,” allocated separately to: (1) the 22nd Circuit Court (including circuit court administration, juvenile-general fund, friend of the court and community corrections); (2) Probate Court (estates & mental health); (3) 14-A District Court; and (4) the child care fund. The county will not have line-item budgeting authority, but the trial court has agreed to submit a bi-annual line-item budget, and provide quarterly financial projections. The amount of the lump sum payments has not yet been determined.

Later in the meeting, during the time for communiciations from commissioners, Rob Turner and Rolland Sizemore Jr. reported that they’d had recent meetings with Shelton and other staff of the court, regarding renovations to the downtown courthouse. They said Shelton has indicated that he hopes the renovations will be finished in April, but Sizemore said they told him there are no guarantees – “and I think he understands that,” Sizemore added. Bids are also being solicited for the demolition of the Platt Road courthouse, where the juvenile court is located. The juvenile court will be relocated to the downtown courthouse, after renovations there are completed.

Where Should Commissioners Conduct Business?

A seemingly routine item on Wednesday’s agenda led to an animated debate that revealed disagreements among commissioners about how they conduct their business.

The discussion began when Ronnie Peterson asked about a resolution to approve a timeline and guidelines for the 2012-2013 budget process. Where were the guidelines? he wondered – they hadn’t been included in the meeting’s board packet. [The document had been part of the board's Jan. 19, 2011 meeting packet, when they gave initial approval to the process. .pdf file of budget timeline/guidelines]

Peterson then asked whether the board retreats were part of that process. Conan Smith, the board chair who has led the two budget retreats this year, clarified that the retreats are part of the budget process. The outcome will be a formal resolution of guidelines and priorities that the board will post, get public input on, and vote to approve, ideally at a board meeting in March, Smith said. The next retreat – possibly the last one – had been scheduled to follow the board’s Feb. 23 administrative briefing. [See Chronicle coverage of the Jan. 29 and Feb. 9 budget retreats.]

Commissioner Ronnie Peterson.

Peterson said he wished that the retreat discussions would be more in the public eye, held at the boardroom table and televised. [The retreats, unlike the board meetings and working sessions, have not been televised on Community Television Network.]

Budget decisions will affect the more than 1,000 county employees as well as constituents who depend on the county for services, he said. This is the board’s main job, he said, and he didn’t understand why they weren’t doing it more publicly – at a working session, for example.

The county will be downsizing, and some departments may be eliminated or consolidated, he said. People want to know how their tax dollars are spent – it’s frustrating when the budget is delivered and people don’t have the opportunity to understand the complexity of the decision-making. People distrust government because they don’t have the opportunity to see how it works, Peterson said.

Media coverage isn’t sufficient, he continued – the press only covers what they think is hot at the time, but people want more. Especially as the county faces a deficit, the public “should see everything we do.”

Peterson then moved an amendment to the budget timeline/guidelines resolution: to hold the budget retreats and the administrative briefings in the boardroom – where both could be televised. [Briefings are currently held in a small conference room.] Kristin Judge quickly seconded the motion.

Barbara Bergman noted there would be a cost to televising the administrative briefings, though she didn’t know what that would be. She also described benefits to the current format, which she said is more informal and allows for interesting give-and-take – and there’s less risk of appearing ignorant if you have questions. The meetings are open to the public and attended by the press, she noted. [The Chronicle attends all administrative briefings; there are rarely any other media or members of the public in attendance.] Meeting in the more formal boardroom venue would stifle discussion, she said.

Judge pointed out that the city of Ann Arbor has been using the boardroom and county staff to televise their meetings while renovation work is done at city hall. The county hasn’t charged the city for that, she noted. If the county can do it for Ann Arbor, surely they can televise meetings for county residents, she said. And while she understands the desire not to feel ignorant, that can be handled in other ways – by asking staff for clarification privately, for example.

The briefings are open meetings and deliberations are done there, Judge said, though some of the newer commissioners might not have experienced it yet. But many people expect to see the deliberations at the televised meetings, which they can also watch online. She described herself as an advocate for the Freedom of Information Act and Open Meetings Act – saying this is one of the reasons she got involved in local government. The administrative briefings “should be in the public eye.”

Wes Prater also supported that view. It might be a bit inconvenient and require some adjustment, he said, but it’s the proper thing to do.

Rob Turner disagreed. He said he didn’t care if the meetings were televised, but he wanted to keep the more informal setting. They were able to get a lot done by working closer together, or in small groups. How would that be televised? Would they have to rebuild the boardroom to accomplish that? He said he planned to vote against the amendment.

Yousef Rabhi reiterated the statements of other commissioner who noted that the retreats and briefings are open and that the press attends. He offered a compromise – that future retreats be held immediately after the working sessions in the boardroom, so that they could be televised. [Rabhi chairs the working sessions.] As for the briefings, he suggested that they agree not to deliberate, and simply listen to Joanna Bidlack – the staff member who leads the meetings – as she reviews the agenda items. That would save the cost of televising.

Dan Smith felt that Rabhi’s suggestions addressed Peterson’s concerns. The staff does a good job of reviewing the agenda at the briefings, he said, but sometimes the discussion goes off topic. He noted that at a recent briefing, he had to steer the group back to the agenda item. [He was referring to the Feb. 9 briefing, when Judge proposed adding a resolution to the agenda that would allow the county to join a dental discount program being piloted by the National Association of Counties (NACo). The ensuing discussion focused on the merits of such a program – after several minutes, Smith noted that they were getting ahead of themselves and should focus on whether to put the resolution on the agenda. It was not added.]

Leah Gunn proposed amending Peterson’s amendment, to keep the briefings as they are and move the retreats to the working sessions. When Judge objected – noting that it would reverse the intent of the original amendment – corporation counsel Curtis Hedger agreed, and Gunn’s amendment was modified to say retreats would immediately follow working sessions.

Peterson recalled that he wouldn’t have been allowed to join a country club years ago – he will never find a backroom where it’s acceptable to conduct the public’s business. He said he worked hard to tear down those walls, and he was shocked and alarmed to hear people who called themselves progressives shutting others out of the process.

Outcome on Gunn’s amendment: The board passed the amendment to hold the budget retreats immediately following the board’s working sessions, and in the same venue, with dissent from Conan Smith.

Peterson’s amended amendment was then considered: To hold future retreats in conjunction with working sessions, and to hold administrative briefings in the boardroom, where they can be televised.

Both Judge and Prater argued that deliberations did occur during the briefings, and the meetings should be held in a more public venue. If there were no deliberations, Judge said, she’d have no problem with the meetings held where they are now. But “it has not been that way since I’ve been there,” she said. They’ve done a lot of the people’s business in that small conference room, and it’s made her very uncomfortable. Prater said the briefings are really unnecessary – Bidlack could simply review the agenda with the three board leaders: the chair of the board (Conan Smith), the chair of the ways & means committee (Rolland Sizemore Jr.), and the chair of the working sessions (Yousef Rabhi).

Conan Smith weighed in, saying he wasn’t supportive of Peterson’s amendment. Deliberations could and should happen in different contexts and environments. They have different kinds of conversations that don’t happen at the boardroom table – that’s important for good government, he said. The intent of the Open Meetings Act isn’t to situate people physically or require televised meetings, Smith said. It’s to ensure that when they make a decision, it’s done in public. “The process of deliberation isn’t subject to the Open Meetings Act,” he contended. When they face contentious topics – as they inevitably will, he said – they need a space to have that kind of dialogue, to arrive at a solution.

Prater asked Hedger to review Smith’s statement. Hedger, the county’s corporation counsel, clarified that deliberations are, in fact, subject to the Open Meetings Act. The exception is when the board holds an executive session, but that’s only limited to certain purposes, he said. But both deliberations and decision-making are subject to the OMA.

Saying she agreed that briefings shouldn’t be used for deliberations, Gunn then proposed setting a new rule to limit discussion at those meetings. Hedger advised dealing with this at the next ways & means committee meeting, since it would be setting board policy. [The board's ways & means committee, on which all commissioners serve, immediately precedes its regular board meetings. Resolutions are first reviewed and voted on at ways & means before being considered for a final vote at the regular board meeting.]

Saying he meant no disrepect to Peterson’s past experience, Turner said he agreed with Conan Smith. The backroom meetings of past years, to which Peterson referred, weren’t open to the public or the press. The board’s briefings are, he said. Good deliberations happen there, he said – deliberations that wouldn’t occur in the more formal boardroom setting.

Gunn then proposed separating out the two issues in Peterson’s amendment, and suggested voting on the budget retreat first – to hold future budget retreats during working sessions.

Peterson clarified that the retreats would be held after the regular working session, and expressed dismay that such an important issue – the budget – would come last.

Outcome: The amendment to hold future budget retreats during working sessions passed, with dissent from Alicia Ping, Conan Smith, Dan Smith and Rob Turner.

The discussion then focused on the administrative briefings. Peterson noted that he hadn’t attended one in years. [Since The Chronicle began covering the briefings when the publication launched in September 2008, Peterson has been the only commissioner who hasn't attended a single briefing.] He clarified that the briefing included an agenda, opportunity for public comment, and that minutes were taken. [The briefings are attended by deputy county clerk Jason Brooks, who records the minutes.]

Peterson said that until about eight months ago, he wasn’t aware that decisions were being made at these briefings – it didn’t used to be that way, he said. He’d found out that some of the things he advocated for – including the land bank – had been killed in the briefings. It’s a cop-out to say that the press is there, he added. They were elected to the board of commissioners, not the board of administrative briefings. He noted that the conference room where briefings are held is so small that there’s not enough room for the public to attend. “That’s not the way you do government business,” he said.

Regarding some commissioners who don’t feel comfortable having these informal briefings televised, Peterson said that those who make jokes about staff members “need to check yourself, because you need to stop.” Everyone should be respected, he said. And for those who are uncomfortable, they should get another job. “We’re not here for a comfort zone,” he said. “You find your loving at home.” The board isn’t a lovefest, he said, it’s a place to do the government’s business. He said he knows people are upset with him about raising these issues, but whatever he might say in private he’ll say in public, too.

Rabhi noted that he’d heard both his experience and his progressiveness called into question that night, and said he’d yield on the first issue. [Rabhi took office in January, and at age 22 is the board's youngest member.] What’s come out of this debate is the question of what an open meeting is, he said. Not everyone has a television or Internet connection – that’s not what makes a meeting open. He agreed that they should do the public’s business on television if it reaches more people, but he argued that they don’t do business at the briefings. He said he yielded on the question of his experience because perhaps deliberations have occurred in the past. He supported Gunn’s proposed rule change to limit discussion. He said he agreed strongly with Peterson about the importance of open government, but was approaching it a little differently.

Judge told Rabhi that lack of experience can be a positive thing – she didn’t intend it as a criticism. It brings new ideas and compromise, and she appreciated that. However, she said it saddened her to hear a public official say they can have better conversations when the cameras are off. She would hope they could have that dialogue at the boardroom table, noting that hundreds of employees are watching. She said she’d never be comfortable saying it’s better to do board business elsewhere. As for having dialogue, “if we all agree, then we’re probably not going our jobs.”

Turner told his colleagues that he doesn’t often get passionate, but that he was now. Pounding his fist on the table, he said the briefings aren’t “backroom” meetings – they’re open to the public. What’s more, he said, “I have never talked about anybody’s character or said anything derogatory about staff members.”

Peterson, who sits next to Turner, said that in his remarks he wasn’t referring to Turner.

Turner again said he didn’t care if any of the meeting are televised, but that it’s important to have the informal setting. He learns from the give-and-take, much more so than in formal sessions. He noted that having served on the Chelsea school board for nine years, he’s very familiar with the Open Meetings Act. He knows that their discussions at briefings are open, but values the informality. “Please don’t take that away from me.”

Bergman agreed with Turner. If the meetings are more formal, the discussions will be taken out of view of the public and press, she said – it’ll become “telephone buzz.” She also objected to Peterson’s comparison of these meetings to racial or religious discrimination. Bergman, who is Jewish, said she’s been the subject of discrimination, when a house wasn’t sold to her family. “It ain’t the same,” she said.

At this point, Gunn called the question – a parliamentary move that prompts action on the motion that’s on the table. The motion to call the question passed, and a roll call vote was taken on the amendment.

Outcome: The amendment to the budget timeline/guidelines – to hold the administrative briefings in the boardroom, where they can be televised – failed, with support only from Judge, Peterson and Prater. The resolution adopting the budget timeline/guidelines was later approved as part of the regular agenda.

Misc. Communications, Commentary

There were several communications from commissioners, and one speaker during the regular board meeting’s time for public commentary.

Public Commentary

Raymond Mullins introduced himself as co-founder of The Loyal Opposition to the Status Quo (LOSQ), a nonprofit group launched to address disparities between African-Americans and Caucasians, including the academic achievement gap, imprisonment and poverty. [Mullins, former president of the Ypsilanti/Willow Run chapter of the NAACP, spoke on the same subject at the January 2011 meeting of the University of Michigan board of regents.] He said he was there to plug the group’s Fourth Annual Celebration of African-American Life in Washtenaw County, on Feb. 26 from 10 a.m. to 4 p.m. at the Peace Neighborhood Center in Ann Arbor. They’re inviting the whole community, he said, not just African Americans. The free event will feature panel discussions and exhibits, and will highlight accomplishments of people from Washtenaw County who’ve distinguished themselves in ways that aren’t widely known. Mullins told the board that he hoped this was the start of a beautiful friendship.

Rob Turner said he’d met Mullins at the recent African American Writers Celebration at the Ypsilanti District Library, and he plans to attend the Feb. 26 event as well.

Rolland Sizemore Jr. suggested that Mullins contact the B.Side – an entrepreneurial program at Eastern Michigan University. He described the B.Side as an excellent program led by Jack Bidlack, the husband of Joanna Bidlack, who works in the county administration office.

Communications from Commissioners

Several commissioners gave liaison reports from the committees and commissions on which they serve, as well as other various communications. Highlights include:

• Conan Smith and Rolland Sizemore Jr. both serve on the Washtenaw County Parks & Recreation Commission. Smith reported that the commission recently approved $600,000 in grants for the Connecting Communities trail program. The projects include one in Pittsfield Township that will be part of a non-motorized path eventually connecting Saline to Ann Arbor. Sizemore noted that the commission also approved $250,000 for a project to build a boathouse, to be used by crew teams, and a fishing dock on Ford Lake. The project is in partnership with the state and Eastern Michigan University, he said. Kristin Judge noted that it will be the only boathouse in Michigan that’s ADA compliant, and she thanked Sabrina Gross of Pittsfield Township for her efforts on the project.
• Rob Turner, a liaison to the Washtenaw County Road Commission, said the road commission is hoping that the rest of the winter is a mild one, given their budget constraints. [.pdf of 2011 road commission budget] Two mechanics are retiring and the commission is replacing them – they’re down to six mechanics, he said, though the standards for their fleet size call for 11.
• Yousef Rabhi gave reports from two groups: the Western Washtenaw Recycling Authority is moving to single-stream recycling, which Ann Arbor adopted last year, and the Washtenaw Area Transportation Study (WATS) has changed a policy toward employees, becoming an at-will employer. He also reported that Gretchen Driskell, the mayor of Saline, is urging local officials to contact state and federal representatives to advocate for keeping the Community Development Block Grant program. Communities in the county receive several million dollars each year in federal CDBG funds, but the program is targeted for deep cuts in the proposed federal budget.
• Wes Prater, a liaison to the county’s public health advisory board, highlighted a letter from a resident of Lodi Township, Melissa Higgs, regarding the county-certified inspection of a water and sewage disposal. [.pdf of Higgs' correspondence] Prater said the letter, which is highly critical of the county operations, troubled him. He asked county administrator Verna McDaniel to make sure that someone followed up on it.

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

Next meeting: The board’s administrative briefing, to preview the March 2 agenda, will be held on Wednesday, Feb. 23 at 5:30 p.m. in the offices of the county administration building, 220 N. Main St. The board’s next regular meeting is on Wednesday, March 2, 2011 at 6:30 p.m. at the county administration building, 220 N. Main St. The Ways & Means Committee meets first, followed immediately by the regular board meeting. [confirm date] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public comment sessions are held at the beginning and end of each meeting.

The board dissolved the land bank – a tool used to help the county deal with foreclosed and blighted properties – at their March 2010 meeting, but commissioner Ronnie Peterson has pushed to bring it back. He initially proposed putting a resolution on the June meeting agenda, but later agreed to a request by board chair Rolland Sizemore Jr. to hold off until July. But at the June 29 briefing, Sizemore and Conan Smith, who chairs the board’s Ways & Means Committee, said they were not putting a resolution on the July 7 agenda either, though discussion on the topic is scheduled for the meeting. Peterson did not attend the briefing.

A range of other items are on the agenda, including a public hearing on possible expansion of the county road commission, and a resolution regarding a transparency initiative that’s been in the works for several months. Led by commissioner Kristin Judge, the effort aims to put more of the county’s public documents, especially financial information, online.

Commissioners expressed some concern over one agenda item: Restructuring the debt for a Dexter Township wastewater system, with the goal of lowering payments – payments the township might otherwise have trouble making. The item led some commissioners to ask for a report on debt held by local townships that’s backed by the county’s credit.

Land Bank: Unresolved Issues

The board of commissioners authorized the Washtenaw County Land Bank Authority a year ago, at their July 8, 2009 meeting. In general, land banks can be used to take temporary ownership of tax- or mortgage-foreclosed land while the county works to put the property back into productive use. “Productive use” might mean selling it to a nonprofit like Habitat for Humanity to rehab, or demolishing a blighted structure and turning the land into a community garden.

The idea is to provide some options to deal with blighted properties. In the case of a tax foreclosure, for example, the county treasurer must auction off the parcel to the highest bidder – often, that’s an out-of-state buyer who’s looking for cheap rental property, sight unseen. That scenario often results in a high likelihood that the cycle of foreclosure will repeat itself.

Before it was formed last year, several commissioners voiced concerns about establishing a land bank, citing issues of governance, control and liability for the county. Ronnie Peterson was among the more vocal in his doubts, saying the board wouldn’t have sufficient control over the land bank authority, other than appointing some representatives. He was also worried about maintenance of the properties acquired by the county, and who would manage and pay for that. Ultimately, though, the resolution to form a land bank passed unanimously.

The land bank authority was chaired by county treasurer Catherine McClary, who had championed the proposal. But commissioners never came to agreement about who to appoint to the authority’s board, and didn’t receive the amount of federal support they’d anticipated would help fund the effort.

Citing these concerns, commissioners voted to dissolve the land bank at their March 17, 2010 meeting. Peterson was the lone vote against that decision at the March board meeting. He asked instead that McClary and others involved in the effort be given more time to address these issues. However, Peterson was not able to persuade other commissioners to table the resolution that dissolved the entity.

Then, at the board’s May 19, 2010 meeting, Peterson told his colleagues that he wanted to reestablish the land bank, and intended to bring a resolution to that effect in June. “I’m going to get this passed,” Peterson said at the time. “I’m going to get this passed at all costs to me.” Peterson represents a district that covers Ypsilanti and parts of Ypsilanti Township, which have a high number of foreclosures.

But by June, board chair Rolland Sizemore Jr. had convinced Peterson to wait another month. From Chronicle coverage of the June 2, 2010 meeting:

Peterson told commissioners he’d subsequently had a breakfast meeting with the board chair, Rolland Sizemore Jr., who had asked him to wait until July 7 before proposing a land bank resolution.

Peterson said that he’d be respectful of that request, but that on July 7 “I’ll be aggressive.” Jessica Ping, who chairs the board’s working sessions, pointed out that the topic of a land bank was on the agenda for the July 8 working session. Peterson said he didn’t have a problem with that – they can discuss the resolution that they’ll pass on July 7. He said he had delayed it until July 7, but would not push it back until August. [In the summer, the board meets only once a month.]

Sizemore said the land bank is a good idea, but there are still some glitches to work out. He encouraged commissioners to attend a seminar on land banks being held next week in Lansing.

Ping proposed shifting the discussion from the July 8 working session to the July 7 meeting of the Ways & Means Committee, which is held immediately prior to the regular board meeting. That way, they could talk through the issues they needed to discuss, then vote on the resolution that same evening. Conan Smith, who chairs Ways & Means, agreed.

Administrative Briefing: Questions about Land Bank Remain

At the June 29 administrative briefing, when commissioners got an advance look at the July 7 agenda, Conan Smith explained why a land bank resolution wasn’t on it. He described the land bank as a surgical tool, not something to use broadly. Commissioners hadn’t yet agreed about exactly how the land bank would be used, and that has caused a lot of consternation among the group, he said. It’s worth talking about what unique functions of a land bank should be applied in Washtenaw County, he added, so that they can fine tune it before moving forward.

Rolland Sizemore Jr. told his colleagues that a lot of questions still needed to be answered. He knew that McClary had been working on it, he said – she also attended the briefing. Foremost among the unanswered questions, he said, were 1) Where will the funding for a land bank come from? and 2) What should it be used for? He wanted to see it be more of a countywide tool, not just something used for properties in Ypsilanti, Ypsilanti Township, Ann Arbor and Superior Township – all areas where there are higher concentrations of foreclosures.

Wes Prater said they shouldn’t forget that the land bank can also be used to deal with abandoned property that’s bringing down the value of surrounding property. The big value, he said, is in keeping other properties from losing their taxable value.

Barbara Bergman said she’d like to see a grid that compares the uses of a land bank to those that are provided by the Washtenaw Urban County, a consortium of local governments that receive federal funding for low-income neighborhoods. Smith noted that the main interest for Peterson – who did not attend the briefing – is in keeping people in their homes. There are a lot of other programs that have the same goals, Smith said, including some operated by the treasurer’s office aimed at preventing mortgage foreclosure and tax foreclosure. The joint county/city of Ann Arbor Office of Community Development also has programs providing assistance to low-income homeowners, he said.

McClary told the board that she was not promoting the land bank – she was just hoping to provide answers to the questions that commissioners had. She said she had pushed for the land bank last year, after seeing the number of tax foreclosures in the county climb – from 11 two years ago, to 100 last year, to nearly 400 this year. That’s why she had originally approached the board about starting a land bank, because she thought they could make a go of it and deal with some of those properties. But at this point, she said, it didn’t matter whether they considered it at their July meeting, or pushed it back to the meeting in August.

She clarified that the land bank authority would be an independent entity from the county. That meant that the county wouldn’t be responsible for the authority’s debt or other obligations, she said. McClary explained that some communities funded their land banks from a portion of the interest payments on forfeited properties – the board of commissioners could choose to do that as well, she said.

[In response to a follow-up email from The Chronicle, McClary explained that the state's General Property Tax Act allows the county to collect 1% interest per month from delinquent taxpayers. That interest is credited to the county's delinquent tax revolving fund to pay delinquent tax notes. Taxpayers also pay a one-time administrative fee of 4%, which also goes to the delinquent tax revolving fund. After delinquent tax notes are matured and paid off, any leftover funds are transferred to the county’s Capital Improvements Fund (CIF) and used to pay the debt service of other bonds committed by the board of commissioners. McClary wrote that for a small sub-set of properties that enter forfeiture – the first step in foreclosure – an additional ½% interest is added to the parcel and goes to the delinquent tax revolving fund.]

Bergman pointed out that the land bank authority wouldn’t really be independent, if the county were providing a revenue source.

Sizemore wrapped up the land bank discussion by saying that he thought the land bank was a good idea, but they still needed to work through some of these issues. He said if someone wants to fight about it at the July 7 meeting, he wouldn’t be supporting it at this point.

Though there’s no resolution on the agenda, Peterson – or any commissioner – has the option of bringing a resolution from the floor during the meeting.

McClary thanked the commissioners, saying that this had been the most productive discussion they’d had on the land bank issue so far.

Transparency Initiative

At the June 29 briefing, commissioner Kristin Judge passed out a draft copy of a resolution she intends to bring forward at the July 7 Ways & Means Committee meeting – a committee of the whole board that meets immediately prior to the regular board meeting. The resolution would establish “Open Book eWashtenaw.org,” providing online access to county data, including more detailed budget and expenditure information.

Judge said a team of people – including commissioner Wes Prater, the county’s knowledge manager Andy Brush, and Pete Collinson, interim finance director – had been working with department heads and others on this project. Brush and Collinson attended the briefing.

Rolland Sizemore Jr. asked Judge why she feels they need to do this. Judge replied that it’s the right thing to do, giving the taxpayers access to information about how their money is being spent. It’s also a directive of the Obama administration, she noted. Though the county already does a good job at this, they can do more, she said.

Check registers will be first to go online. Next will be credit card and P-card (purchasing card) information, as well as salaries.

Barbara Bergman expressed some concern about privacy issues. Judge pointed to one of the Whereas clauses, which states:

” [...] the presumption of openness does not preclude the legitimate protection of information whose release is exempted by the Michigan Freedom of Information Act, or in any other way protected by any applicable federal law, would threaten security, invade personal privacy, breach confidentiality, or in any way damage other genuinely compelling interests.” [.pdf file of full resolution]

Conan Smith suggested that they monitor the amount of staff time it takes to put this information online, and how many hits it gets. Tracking the number of Freedom of Information Act requests before and after the data goes online is another way to monitor its effectiveness, he said.

Judge agreed that it was good to monitor those things, but reiterated that the public owns the information, and government should make it as accessible as possible.

The board will consider the resolution at the July 7 Ways & Means Committee meeting. If approved, it will come before the board for final approval at their Aug. 4 board meeting.

Other Items on the July 7 Agenda

The board will consider and vote on several other items at its July 7 meeting, including the following:

Public Hearings: Road Commission, Brownfield Plan

The board will hold two public hearings on July 7, seeking input on: 1) possible expansion of the Washteanw County Road Commission from three to five members; and 2) a brownfield plan for the Mellencamp Building in downtown Ypsilanti.

No additional action is expected regarding the road commission on July 7.

In addition to the public hearing, the board is scheduled to vote on approval of the Mellencamp Building brownfield plan. [.pdf file of Mellencamp brownfield plan] The developer is buying and rehabbing three vacant buildings at 120, 122 and 124 W. Michigan Ave., between Huron and Washington, and converting them to residential and commercial space. The $2.2 million project is seeking brownfield status as a “functionally obsolete” property, which will make it eligible for Michigan Business Tax credits. [For more details on how the brownfield process works, see Chronicle coverage: "Zingerman's Project Seeks Brownfield Status"]

Portage Lake Dam Repairs

The board is being asked by the office of the water resources commissioner to authorize maintenance and repair costs for Portage Lake Dam. The estimated cost is $184,690 over a three-year period, from 2010 through 2012. In addition to monitoring several potential problems – including a crack in the right downstream retaining wall and a downstream retaining wall on the left embankment that’s leaning towards the river – the project includes updating the electrical control system and adding “No trespassing” signs, among other changes. [.pdf file of suggested maintenance and repairs]

At the June 29 administrative briefing, the item prompted Rolland Sizemore Jr., the board’s chair, to ask county administrator Verna McDaniel for an update on the dams along the Huron River in Washtenaw County. He suggested a working session with the Huron River Watershed Council and the county’s water resources commissioner, Janis Bobrin.

The request prompted Conan Smith to quip: “Let the record show that Rolland wants another dam meeting.” The comment was met with a certain number of good-natured groans from his colleagues.

Bond Refunding for Dexter Township

The board will vote to authorize the sale of refunding bonds for Dexter Township – debt that was originally incurred in 1994 to build the Multi-Lakes wastewater system, in partnership with Lyndon Township, and with Putnam Township in Livingston County. The system initially served portions of North Lake, Silver Lake, Half Moon Lake and Blind Lake. A later phase added service to Island Lake, Ellsworth Lake, and portions of Bruin Lake and Joslin Lake in Lyndon Township and Patterson Lake in Putnam and Unadilla townships, as well as the village of Gregory.

In 1999, Washtenaw County had issued refunding bonds of $6.53 million for Dexter Township’s portion of the debt. Now, $3.05 million in debt remains – restructuring it would entail reducing the township’s payments by extending the debt for another five years, a move that’s expected to save the township $38,000.

Commissioners were told that without the restructuring, the township would potentially not have sufficient funds to make its debt payments.

Rolland Sizemore Jr. pointed out that the board took similar action for Sylvan Township earlier this year. In March 2010, the board approved the sale of $10.4 million in refunding bonds to restructure debt from construction of that township’s water and wastewater systems. From the cover memo of the Sylvan Township resolution:

On July 18, 2001, the Washtenaw County Board of Commissioners approved a Resolution (Resolution #01-0138) to sell $12.5 million in bonds to assist Sylvan Township in the construction of a water and wastewater system. Although the bonds were issued by the County, the Township contractually agreed to be responsible for making the required bond payments. In recent years, the economic difficulties that have beset Michigan have also affected the ability of the Township to generate cash flow for debt service through new connections to the system. However, those same economic conditions have reduced interest rates and provided an opportunity to restructure the original debt to provide cost savings for the Township and additional time for economic recovery.

Sizemore asked McDaniel that the board be given a review of debt incurred by these and other townships, which have used the county’s full faith and credit. Barbara Bergman agreed, wondering how many similar projects there are. It was scary, she said, to think what the county’s responsibility would be if a township defaulted.

At their administrative briefing on Wednesday, commissioners discussed the move with county treasurer Catherine McClary, who also attended the meeting. McClary had originally proposed the land bank as a mechanism allowing the county to take temporary ownership of tax- or mortgage-foreclosed land. The intent would be to give the county options for dealing with blighted property, other than selling it off at auction.

But anticipated federal funding didn’t come through, and a dispute among some commissioners about who would serve on the land bank authority board stalled the project. “It’s fair to say that the county was not sold on it,” McClary said at Wednesday’s meeting.

Land Bank: Issues of Funding, Control

Starting back in July 2009, when Catherine McClary first asked the board to formally support creation of a land bank authority, issues of funding and control were at the forefront in the board’s discussions. [See Chronicle coverage: "Banking on a Land Bank"]

Funding

At their July 8, 2009 board meeting, commissioners quizzed McClary about details of the proposal, which they ultimately approved that evening. While some commissioners expressed support, others – including Wes Prater and Ronnie Peterson – said they were concerned about taking property off the tax rolls and worried that the board wouldn’t have any control over the land bank’s governing entity. Board chair Rolland Sizemore Jr. asked McClary at the time whether the board could dissolve the land bank, if they didn’t feel it was effective. She told him that they could.

The initial plan called for funding the land bank with $300,000 from the federal Neighborhood Stabilization Program, which the county had already been awarded. In July, the county applied for additional NSP funds – including nearly $5 million for the land bank – but did not receive the funding.

At Wednesday’s briefing, commissioner Leah Gunn pointed to that lack of funding as the primary reason for dissolving the land bank, saying “I think the land bank train has left the station.” She said the Washtenaw Urban County – a group which she chairs – can use the original NSP dollars to rehab blighted properties, working with housing nonprofits like Avalon Housing and Habitat for Humanity. The Urban County is a partnership of the county, the cities of Ann Arbor and Ypsilanti, and eight townships, working together to allocate funding from the federal Community Development Block Grant program.

Ken Schwartz said it seemed to be a question of whether the land bank was a good vehicle for the county to use at this time. He said there’d been a lot of fighting around the issue, and that it never seemed as though the board could get behind it.

Control

Conan Smith, an advocate for the land bank, said the blame for not making it work rests “squarely on our shoulders.” The board’s bickering with McClary over the land bank authority’s bylaws dominated the conversation, he said, and they weren’t able to come to consensus about which commissioner to appoint to that governing entity. [The Ann Arbor city council appointed a representative – councilmember Sabra Briere – but commissioners themselves never did.]

The land bank authority was to include one commissioner on its board – an appointment that both Smith and Prater sought. At Wednesday’s meeting, which Prater did not attend, Smith said he originally had the six votes needed for the appointment. But rather than push the issue and create tensions during the already difficult budget deliberations, Smith said, he chose to lobby to get two positions created for commissioners on the authority’s board, so that both he and Prater could serve. In hindsight, that was a mistake, he said.

Likening it to the county’s Economic Development Corporation, Smith said the land bank would have allowed the county to be proactive. “It’s a tool we should have at our disposal,” he said. However, if they can’t use the land bank efficiently, he added, it makes sense to dissolve it.

For her part, McClary told commissioners she felt like she’d done a poor job in explaining the benefits of a land bank. It was primarily aimed at tax-foreclosed properties, she said, more so than mortgage foreclosures – though both kinds of foreclosures have been on the rise. In 2008, there were 26 tax foreclosures from tax year 2005, she said. [It takes three years to get to the point of foreclosure, beginning when a taxpayer is delinquent on their taxes.] In 2009, there were 102 tax foreclosures, with 45 of those ultimately sold at auction. This year, there are 515 properties in tax foreclosure, though McClary said some of those will be redeemed if property owners come forward to settle their bills.

It’s often out-of-state companies that pick up properties in tax-foreclosure auctions, McClary said: “They’re bottom fishing.” The mechanism of a land bank would have allowed the county to  hold the properties temporarily and partner with nonprofit housing agencies to rehab and resell them. Or if necessary, the houses could be demolished and the land used for other purposes.

The beneficiaries are really the municipalities, particularly in the Ypsilanti area, McClary said. But without the board’s support, she added, it was difficult to move forward.

Neither topic is new to commissioners or Chronicle readers: The federal foreclosure funds were discussed at last week’s administrative briefing, and the budget crisis has been on the table since the board’s Feb. 4 meeting. So commissioners were prepared to ask pointed questions on both issues, and they did.

Foreclosure rehab funds

Mary Jo Callan, director of the city/county office of community development, and Jennifer L. Hall, the office’s housing manager, gave a report on the $3 million received by the county through the federal Neighborhood Stabilization Program (NSP). [Separately, the city of Ann Arbor is receiving $850,000 through this program.] These funds, administered by the U.S. Department of Housing and Urban Development (HUD), are part of the 2008 Recovery Act, not the most recently passed stimulus package.

Hall, who is directly managing this effort, gave most of the presentation and fielded questions from commissioners. Nationwide, she said, HUD used a formula to determine the  areas of greatest need. For the Washtenaw County grant, those areas are Ypsilanti, Ypsilanti Township and southern Superior Township. Need was determined by the number and percent of home foreclosures, the number of homes financed by subprime mortgage-related loans, and the number of homes in default or delinquency.

The funds can’t be used for foreclosure prevention. [The county treasurer's office has other programs for that.] Rather, NSP funds will be used to deal with three types of properties: 1) abandoned properties, 2) “blighted” structures, and 3) foreclosed properties. Specifically, here’s the breakdown of uses:

• $1.9 million to buy and rehab abandoned and foreclosed residential properties within the targeted areas, with the goal of reselling these units to low-income buyers. The bulk of that – $1.12 million – will be split between two nonprofits that are partnering with the county: Habitat for Humanity of Huron Valley, and Community Housing Alternatives. In addition, $60,000 will be used for owner education programs and $740,000 will be invested in multi-unit rental properties.
• $300,000 for a land bank. This project is being set up through the county treasurer’s office and will be used to acquire foreclosed property as a “last resort,” Hall said – for instance, when there are no interested buyers  on the open market.
• $500,000 for demolition of blighted properties. Hall said that Ypsilanti officials have indicated they might use their portion of these funds for properties in the Water Street area, which the city is attempting to redevelop.
• $302,471 for administrative costs, spread over four years.

For this program, eligible applicants to purchase properties can have income no higher than 120% of the area median income (AMI). For a four-person household, 120% of AMI is $98,900. At least 25% of funds must be used for households at 50% AMI or lower.

After her presentation, several commissioners had questions and comments. Commissioner Leah Gunn – who chairs the executive committee of the Urban County, the entity through which these funds were awarded – described the program as “incredibly complicated” and praised Callan, Hall and Damon Thompson, operations manager for the office of community development, for successfully pulling off the application in record time.

Commissioner Barbara Levin Bergman expressed concern that people who get homes through this program will end up in the same cycle of foreclosure. “I want this to work, but it’s sounding a little rocky to me.” Hall said they had the same concerns, and were addressing those concerns with rigorous guidelines. There are also strategies to make the purchase more affordable. If the house is acquired through Habitat for Humanity, for example, homeowners have a 0% interest loan, so their payments are lower. The program also can assist with a down payment. And when rehabbing the properties, they make energy-efficiency improvements on the houses, thus lowering utility bills.

Hall said that over the past 25 to 30 years the city and, more recently, the merged city/county office of community development has worked with about 1,500 households and had only 25-30 foreclosures.

[Later, in a follow-up phone conversation with The Chronicle, Hall said that applicants for NSP funds go through a homebuyer education program, administered by the Washtenaw Housing Education Partners. Then, they'll get one-on-one counseling to look at their income level, assets, debt, credit rating and other factors, making sure they'll be able to take on the financial burden of home ownership. The program also requires that buyers secure fixed-rate mortgages, not the riskier adjustable-rate mortgages. Hall said they expect hundreds of people to apply for this program, but not everyone will be eligible.]

After describing the program as “government at its best,” commissioner Kristin Judge asked how many homes would be part of it. About 45-50 was their best guess, Hall said.

Commissioner Jeff Irwin asked for more details about the rental properties. Hall said there weren’t a lot of multi-family units in foreclosure. They’re looking at three properties, and would be one of several investors in each one: 1) a property that Avalon Housing is acquiring from the Washtenaw Affordable Housing Corp., 2) two other properties that Keybank holds the mortgage on, and that Community Housing Alternatives will be acquiring.

Irwin also asked how the administrative funds would be used. Callan said that since the funding wasn’t a permanent revenue stream, they didn’t plan to hire additional full-time staff. She also noted that because these funds will be targeted to specific parts of the county, “I think these funds will really let us free up other funds for other jurisdictions.”

In response to a query from commissioner Ronnie Peterson, Callan said they expected to receive additional NSP funding from the 2009 federal stimulus package, which has allocated $2 billion nationwide for the program. Unlike the 2008 funding, which was distributed based on a HUD formula, the 2009 funds will be awarded on a competitive basis.

County budget update

As part of ongoing discussions related to the projected budget deficit, county administrator Bob Guenzel gave an update on efforts to address this issue. He reported that he’d had a long, productive meeting with department heads. He passed out several documents that they’d discussed at that meeting, including a chart that showed a range of funding scenarios, department by department, if across-the-board cuts were made. The chart showed the amount of funding that would be reduced if departments cut their budgets by 5%, 10% and 20%. A 20% cut for the trial court, for example, would mean $1.36 million in cuts out of a current $6.8 million budget. For the sheriff department’s corrections budget – by far the largest on this chart, at $14.66 million – a 20% cut would reduce that budget by $2.9 million.

Guenzel stressed that these documents are intended as tools, and not as recommendations for across-the-board cuts. He said he’d heard “loud and clear” from commissioners that they want cuts to be strategic, not across-the-board, but he said the chart allows departments to see the implications of the different levels of funding cuts that might be required.

The chart did not include all of the county’s operations, and several commissioners queried Guenzel about that. Commissioner Barbara Levin Bergman asked why police services funding wasn’t included in the chart, referring to the contracts that the county has with several townships to provide sheriff deputy patrols. Guenzel said he didn’t include that funding because the board has already made a contractual commitment with the townships for fiscal 2010, so that’s off the table. Bergman said that it’s not set for 2011, and she felt it should be included on this kind of public document. Guenzel said he would add it.

Commissioner Wes Prater agreed with Bergman, and noted that the chart represented $73 million out of the county’s $104 million budget. He wanted to see the entire general fund budget represented, including the entire amount for the sheriff’s department. Guenzel said they’d provide that information.

As he has in the past, commissioner Mark Ouimet stressed the importance of managing cash flow, and said it was crucial to ensure that the county was getting use of its capital as quickly as possible. He praised the documents showing the impact of various budget cuts, saying it was a good place to start wrapping their minds around what these cuts will mean.

Commissioner Ronnie Peterson urged the administration to start talking about “early nipping” of the budget, rather than waiting until July. [The administration plans to make a formal proposal to the board for budget reductions in early June.] Guenzel agreed, noting the county did have a hiring freeze in place. He also said that employees aren’t retiring or taking other jobs at the rate they have in the past – the implication being that the county didn’t have as much opportunity to shrink its payroll through attrition.

Later in the meeting, commissioner Conan Smith presented a draft proposal to the board for a series of community forums they plan to hold about the budget. The forums are planned for late May and early June, but no dates have been set. Smith said for these forums they’d be partnering with community groups like the local chambers of commerce, nonprofit agencies and others.

Stimulus package update

Verna McDaniel, deputy county administrator, gave an update about the administration’s efforts to coordinate among departments with regards to anticipated federal stimulus funding. She said they’re communicating with state legislators as well as Congressmen John Dingell and Mark Schauer, and are tracking which county departments are applying for and/or anticipate receiving funds. For example, the Head Start and the Employment Training & Community Services (ETCS) groups expect to get significant stimulus funding. The goal is to get a handle on how the county will be affected by this funding, McDaniel said. At this point, however, ”there isn’t a lot of super-solid information about amounts,” she said.

Guenzel said they’d prepare a status report for the board within the next couple of weeks.

Public commentary

Tom Partridge was the only person to speak during the four times allotted for public commentary, and he spoke twice. He said it was not permissible to require speakers to state their address or citizenship before they spoke. [The county asks speakers to state their name and address before making a public comment.] He then directed his first remarks toward commissioner Conan Smith, who chairs the board’s Ways & Means Committee. Partridge said the board, as well as all elected bodies, should form a code of ethics that would prohibit officials from holding paid public office while also having positions within political parties. He asked Smith to choose: either serve as county commissioner or as chairman of the Ann Arbor Democratic party [a position Smith was elected to earlier this year].

In his second turn, Partridge chastised the board for being overly pessimistic, and called on them to reject the worst-case scenario when planning their budget. He said he listened intently for big ideas during their meeting, but said he heard none. These times require forward-thinking programs, he said, such as ones to bring about the rapid expansion of public transportation.

Present: Barbara Levin Bergman, Leah Gunn, Jeff Irwin, Kristin Judge, Mark Ouimet, Ronnie Peterson, Jessica Ping, Wes Prater, Ken Schwartz, Rolland Sizemore Jr. (who attended the Ways & Means Committee, but had to leave before the regular board meeting), and Conan Smith

Next board meeting: Wednesday, March 18 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]

News of the county grant came during an informal administrative briefing for county commissioners on Wednesday, a gathering that also featured an exploding pen and a word that one commissioner described as sounding like a sexually transmitted disease.

Aid for Foreclosed Properties

Foreclosures have been a concern countywide. At their Feb. 18 meeting, the board of commissioners heard from county treasurer Catherine McClary, who reported filing a record number of tax foreclosures earlier this month. And last year was a record for mortgage foreclosures in Washtenaw County, according to the county clerk’s office: 1,439 homes were auctioned at a sheriff’s sale in 2008, up from 1,151 in 2007 and 703 in 2006. In January 2009, 85 homes were auctioned after foreclosure, down from 106 last January and 88 in January 2007. In January 2006, 32 foreclosed homes were sold at the sheriff’s auction.

This new grant for the county is part of  the nationwide $4 billion Neighborhood Stabilization Program. Locally, the grants will be coordinated by the Office of Community Development. Mary Jo Callan, the joint city/county community development director, will give a brief presentation about the program to commissioners at their March 4 board meeting.

In explaining the federal program at Wednesday’s administrative briefing, Joanna Bidlack of the administrator’s office said the funds can’t be used for foreclosure prevention, such as counseling or legal aid. Those services will still be handled by the county treasurer’s office, which has prevention programs aimed at mortgage foreclosures and tax foreclosures.

Other agenda items for March 4 meeting

Commissioners were briefed on several items that they’ll be voting on next week. They include:

• Through the Ann Arbor Area Community Foundation’s “Big Ideas” grant, the county is applying for $199,320 to support the Ann Arbor Region Success Strategy, a project that several county leaders are involved in. The community foundation will award up to $200,000 to as many as four projects, using funds Pfizer had donated after it announced plans to pull out of Ann Arbor. If the county is awarded the grant, they’d use it for project management support, and would provide an in-kind match of office space and staff time. Bidlack cautioned that many projects were vying for these funds, so it’s unclear whether the county will be granted this money.
• The county plans to raise the brownfield project application fees paid by developers. The biggest change is for projects under $1 million – currently the county charges $500 to apply, and plans to raise that fee to $5,000$3,000. Bidlack told commissioners that in this category, the county hasn’t been covering its cost to process applications and is far below national state benchmarks. Last year, these fees brought $12,000 in revenue. Under the proposed fee increases, that amount would have totaled $27,000.
• The board will be asked to authorize a vendor pool for as-needed construction and renovation projects. For general construction, the companies are Allied Building Service Co., Carver Construction Co. and Krull Construction. For electrical work, the companies are Huron Valley Electric, Ronald A. Meyer Electric and Shaw Electric. Except for Allied Building, all are based in Washtenaw County. The staff will be drafting a policy, which board chair Rolland Sizemore Jr. asked to review, for how to assign work out of this vendor pool.
• The county is applying for a $24,140 state grant to begin testing for cylindrospermopsis – a toxin which can cause skin allergies and other health problems – in four area lakes: Joslin, North, Sugarloaf and Whitmore. It’s part of a broader program administered by the county’s Public Works group, which is developing a “toxin profile” of Washtenaw County lakes. They’ll simply be adding this test to the other water quality monitoring already underway, Bidlack said. (The toxin’s name prompted commissioner Jessica Ping to say, “That’s not a good word!” to which commissioner Ken Schwartz said, “Sounds like an STD to me.”)

In-Kind Contributions, Commissioners’ Expenses

At a couple of points during the briefing, commissioner Jessica Ping raised questions about the county’s in-kind contributions as part of various grant awards. For example, the county match for the cylindrospermopsis testing is $10,236. For the “Big Ideas” grant, it’s $107,160. Ping noted that almost every time there’s a grant awarded, it involves some sort of in-kind contribution from the county, and that adds up. Jeff Irwin pointed out that you could also view it as leveraging the county’s resources in order to get some of these grants. Ping asked staff to tally the in-kind contributions that the county commits to in a given year, and report back to the board.

Curtis Hedger, the county’s corporate counsel, said he’d almost completed a report analyzing the county’s mandated and discretionary spending, department by department. The report is meant to help commissioners and staff as they look for expenses to cut in the upcoming 2010-11 budget. [As previously reported, the county faces a budget deficit unless expenses are cut or revenues increase more than projected.]

Commissioner Kristin Judge said they need to look at the board of commissioners and administration line items before anything else. Bob Guenzel said that the administration’s expenses would be scrutinized just like all other departments, but that it was up to commissioners to decide what to do with their expenses.

Commissioner Leah Gunn suggested that the staff send commissioners a line-item report related specifically to expenses for the board, so that they could look for possible cuts.

Guenzel reminded commissioners that the only thing they can’t cut is their salaries – they’d have to wait until next term if they wanted to do that. That prompted Jessica Ping to say that they don’t get paid enough right now based on the amount of time they put it, and Judge allowed that in that light, she probably earned about $1 an hour, if that.

“I’m willing to give up Jeff’s pay,” quipped commissioner Mark Ouimet, referring to Irwin.

Eight of the 11 county commissioners earn $15,500 a year. The board chair (Rolland Sizemore Jr.) makes $18,500, and commissioners who chair the ways and means committee (Conan Smith) and the board’s working session (Jessica Ping) get $16,500 each.

The Perils of Pens

Jeff Irwin, a Democrat, spent a portion of the meeting doing cleanup after a pen spurted blue ink onto his jacket and the cabinet where he was standing. Referring to Mark Ouimet, a Republican, Irwin said: “That’s what I get for stealing Mark’s pen.”

Commissioner present: Leah Gunn, Jeff Irwin, Kristin Judge, Mark Ouimet, Jessica Ping, Wes Prater, Ken Schwartz, Rolland Sizemore Jr.

County administrator Bob Guenzel and his staff also presented various scenarios for increasing revenues, as points of discussion, not recommendations. Those included a couple of options to raise or reapportion taxes that would require voter approval and appeared to have little traction among commissioners at this point.

The discussion was part of an ongoing effort to deal with a budget crisis faced by the county and other local governments as the economy brutalizes this region and the nation. Two weeks ago, Guenzel gave commissioners a best case/worst case budget scenario that included potential deficits of up to $28 million for 2010-11, unless revenues increase or expenses are slashed.

Revenue Projections

At Wednesday’s meeting, Guenzel began by reminding commissioners that projections could change as the months progress. He described the 16 revenue sources that account for about 95% of all general fund revenues. They include property taxes (by far the largest source), fees collected by the registrar of deeds and drain commission, state revenue sharing dollars, state cigarette and liquor taxes, court fees, ordinance fees and interest income, among others.

The county’s treasurer, Catherine McClary, was on hand to discuss the interest income piece of the budget’s revenue. Two factors are at play, she said: Interest rates, and the amount of county funds available to invest. In both cases, the news isn’t good. Interest rates fell by half over the past year, from just over 5% to 2.5%. A three-month Treasury bill is under 1% now, she said. The county’s investments are still holding at about 2%, she said, thanks to prior investments. Her staff is working on interest income projections for the coming budget cycle.

A state-mandated change in the timing of local tax collection is also having an impact. Over the past few years, county tax collection has shifted from December to July. Today, all county taxes are collected in July. That’s causing cash-flow issues, as the county must spend money before its mid-year tax collection. To deal with that, the county borrows money from its state revenue-sharing reserve fund, transferring it into the general fund to cover expenses.

Foreclosures are also an issue. McClary told commissioners that earlier in the day, she’d had to file property tax foreclosures on 102 properties – a record number, despite her office’s efforts to work with homeowners to prevent that from happening. (The owners have until March 31 to redeem their property by paying their tax bills, so the final number will be lower, she said.) Last year, the treasurer’s office foreclosed on 26 properties, with 16 ultimately not redeemed.

McClary said the county is working under tremendous constraints right now, and to the extent commissioners can make budget decisions as early as possible, “the county will be in a much better position.”

Shifting The Fiscal Year – Or Not

Jennifer Watson, the county’s budget manager, presented two options related to shifting the county’s fiscal year, which is currently tied to a calendar year. She noted that the county doesn’t receive its equalization report – which tells them how much they’ll be collecting in taxes – until April. That means they’re already four months into the fiscal year before they have firm revenue numbers, and if the projected revenue turns out to be lower than expected, they’re forced to cut expenses to balance the budget. Guenzel said the options were in response to at least two commissioners who’d wondered whether shifting to a fiscal year that started in July or October would help with these issues.

Both options would result in financial challenges, however. Starting the fiscal year in July would mean that the first six months of the year would be unfunded initially. Starting in October means the county would go through seven months of its fiscal year before getting the April equalization report, which could then require significant adjustments.

Commissioner Mark Ouimet, a former banking executive, expressed concern about the county’s cash position. Shifting the fiscal year would mean that the county’s cash needs would be even greater. And noting that he’d made this point before, he said that focusing on the balance sheet – rather than on the county’s income statement – would be critical in the planning process.

Commissioner Kristin Judge, in a comment that garnered some laughs, asked if she’d missed something in the analysis of fiscal year options: “It sounded like one was bad and the other one was bad.”

Later in the meeting, McClary told commissioners she would not recommend shifting fiscal years, calling it a gimmick the state already used that’s resulted in cash-flow problems. McClary also pointed out that general fund revenues – about $104 million – accounted for only half of the county’s budget, though the other half consisted primarily of  restricted funds. However, she said those non-general fund monies are being invested and used to help manage cash flow.

Several commissioners weighed in against making any changes to the fiscal year. “I don’t think we can take the risk,” Leah Gunn said.

Other Revenue Factors: CPI, Property Taxes

Guenzel said the county looks at several factors when trying to project property tax revenue. Among them are changes that occurred the previous year, housing values, building permits, median income and general economic indicators like unemployment and the stock market. They also project changes in the CPI (the consumer price index, an indicator of inflation), which they estimated to be 4.4% this year, though that shows signs of dropping. Later in the discussion, commissioner Conan Smith cited the importance of CPI, noting that a higher CPI results in more revenue for the county. However, annualizing the data based on the first part of this year, the CPI would come in at only 1.6% for 2009.

Guenzel also talked about property tax projections, noting that residential property taxes account for about 65% of the total property taxes collected. Here again, the news was not good. The county projects a 10% drop in residential SEV, or state equalized value – the amount at which a property is assessed. In addition, new residential construction has stalled – only 238 residential building permits were issued in Washtenaw County last year, down from a peak of 2,758 in 2004.

Also important is the gap between SEV and taxable value. For about 49% of properties in the county, SEV equals taxable value, Guenzel said. That means if a property owner’s assessment decreases, so will their taxes. For all other homeowners, even if their assessment goes down, their taxes could increase as much as the rate of inflation. [The Citizens Research Council of Michigan, an independent nonprofit, provides a decent primer on Michigan's tax system, including information on Proposal A, which places a cap on taxable value.]

The county’s commercial tax base is also a challenge. Top taxpayers in that category include Pfizer, General Motors and Ford/Visteon. Pfizer’s sale of its Ann Arbor research campus to the University of Michigan will take it off the tax roles completely.

Property Tax Assumptions

Guenzel presented a range of revenue projections, and asked commissioners for their feedback – i.e., what projections would commissioners like the staff to use when preparing their budget:

• CPI in a range of 3.5% to 0%
• Percentage of properties in which SEV equals taxable value. County staff estimates that the current 49% will increase each fiscal year as property values decline.
• Projected percentage changes in SEV for 2010 through 2012. For the total county SEV, the ranges are: -6.8% to -9% in 2010, -5% to -10% in 2011, and -3% to -8% in 2012.
• Estimated change in taxable value, which is the most important factor, Guenzel said: a range between -3.75% to -8% in 2010, -3% to -10% in 2011, -2% to -7% in 2012, and 0% to -3% in 2013.

Commissioner Discussion

Leah Gunn said the county should be “ultra, ultra conservative” in terms of its revenue projections, noting that if they aren’t, they’ll be making major budget adjustments as each year unfolds. “It’s easier to adjust up than to adjust down,” she said.

Barbara Levin Bergman agreed, saying that they need to prepare for the worst-case scenario. She also said she hoped that budget cuts would be applied surgically, rather than across the board.

Jessica Ping, one of only two Republicans on the 11-member board, joked that she was a bit surprised to hear Commissioner Gunn use the word “conservative.”

Mark Ouimet, the board’s other Republican commissioner, agreed that they should err on the side of caution. He added that if they select the lower revenue target, the result will be a fairly significant burn rate on capital. They need to plan for that soon, or they won’t have the capital to “ride this thing down.”

When Ouimet ended his comments by saying he was trying to come up with something positive to say, Conan Smith quipped: “You could go with, ‘See? The conservatives are right!’”

After commissioners Kristin Judge and Ken Schwartz said they agreed with setting cautious projections, Jeff Irwin voiced a slightly more moderate view. He said that although almost 50% of homes will have their taxes lowered, that means the other 50 percent still have the “Proposal A spread” and will see a tax increase, which translates to more revenue for the county. He said that taking the worst-case scenario might lead to shortchanging departments and services, when the county doesn’t need to go that far. And some indicators, he noted, aren’t as horrific as others.

Smith asked if anyone wanted to estimate the impact that the federal stimulus package will have on CPI, to which Wes Prater replied, “Not as much as you’d think.” Smith added that he thought the CPI will be strong enough to pull the county’s revenues into the middle-low target area.

Bergman asked Guenzel to comment on the 2009 budget, wondering whether they should start looking at cuts now. “I’m no longer sanguine that we’re ok in ’09 when we’re so not ok in the future,” she said.

“We may not be ok for ’09,” Guenzel replied. They won’t know the county’s property tax revenue for the year until April, he said, and might have to make adjustments based on those numbers. He said he didn’t think the board could wait until Jan. 1, 2010 to take action.

Rolland Sizemore Jr., the board chair, had the last word in this discussion, saying that he promised that they’d look at cuts from the top levels of the administration to the bottom. He said they needed to start talking about those decisions now.

Options for Revenue Reforms

Guenzel asked the county’s corporate counsel, Curtis Hedger, to go over some possible longer-term changes that could help on the revenue side.

Headlee Override: Hedger began with a bit of history, noting that the county’s 5.5 millage rate was set in 1964. But since the Headlee Amendment passed in 1978, that rate by law has been gradually rolled back to offset property assessment increases. The current rate is 4.5493 mills.

An override, which would need to be approved by voters, could reset the millage up to its original rate of 5.5 mills. To do that, the county would have to specify what those funds would be used for. But as soon as the rate was reset, it would again be subject to the gradual Headlee rollbacks. And it’s unclear whether voters would give their approval.

Millage Reapportionment: Countywide, there’s a limit of 18 mills in total that can be levied by all taxing entities, including the county, townships and others. In 1964, Hedger said, a county tax allocation board was formed to determine how to allocate the 18 mills – of that total, the county’s rate was set at 5.5 mills. Commissioners could reconstitute that board, Hedger said, to allocate new rates. The risk, of course, is that the allocation board could set the county’s rate at a new, lower level.

In addition to the two longer-term options described by Hedger, Guenzel said that other revenue-generating options include a new millage dedicated to operating costs, and, more broadly, sustained economic growth. County departments could also consider increasing fees, increasing their rate of collections, and adding programming. Outside funding opportunities include anticipated funding from the federal stimulus package, federal and state earmarks and grants, among others.

Guenzel also said that staff was looking at generating revenue from within the county’s infrastructure, such as selling buildings, renting out unused county-owned space, and decreasing or eliminating its leased spaces. “We’re seriously looking at our space issues,” Guenzel said, noting that the building on Zeeb Road was only half full, and that the 15th District Court will vacate the county courthouse sometime in 2010, and would be available for use in 2011.

Selling property might be helpful, he said, but it’s not a structural savings. However, he added, reducing the county’s building footprint would save on operating expenses. Guenzel said he’d asked some local brokers, on a pro bono basis, to look at what county properties might sell.

Sizemore said he wanted to see a plan related to property sales sooner rather than later. Ouimet said they’d probably hear from brokers that it’s not the right time to sell because of the market, but he said it’s a good time to assess the county’s future space needs, while getting rid of excess real estate.

Ping wanted to know what county-owned space is being used by other organizations at no charge, and to see what they could ask in rent instead.

At the end of their discussion, Guenzel said his staff would bring back a plan for revenue projections based on what they’d heard from commissioners, noting that it was always subject to revision based on changing conditions.

Smith said that this was the only substantive discussion the board had planned related to the revenue side of the budget. Ping, who chairs the board’s working sessions, said they could always discuss budget issues at that venue, if needed.

Sizemore asked Washtenaw County sheriff Jerry Clayton, who was in the audience, whether he could give commissioners an update on how the county’s criminal justice system would be affected by Gov. Jennifer Granholm’s proposal to cut the state’s Department of Corrections. Clayton said he expected it would have some impact locally, but that the proposal would undoubtedly be changed as the budget moved through the state legislature, so it was too soon to tell. He said his department would plan some kind of strategic response, whatever those final numbers are.

Sizemore said he’d like to hear from other elected officials too, including county prosecutor Brian Mackie, treasurer Catherine McClary and water resources commissioner Janis Bobrin. Smith reported that Guenzel was already setting up those meetings.

Bergman said she felt she must fire a shot across the bow, stating that it wasn’t right that the commission – before it even dealt with the 2010 budget – had already approved a rate for what the county charges the townships for police services. She said she used to read her children a book about a lion and an alligator in a swamp. The lion said to the alligator: “There is an old saying, I know that it’s true, you can’t have your friends and eat them all too.”

Gunn cited several examples of nonprofits that are struggling to keep up with demand for their services. “It’s getting tough out there,” she said, later adding, “we are the government of last resort.”

Public Comment

The only person to comment during the times set aside for public comment was Tyrone Bridges, who runs a program in Ypsilanti that teaches at-risk youth how to build computers. He said he’d recently tried to apply for a $6,500 community development block grant, and was told that he wasn’t eligible because his group hadn’t been audited. “I’m asking someone to help me,” he said, saying he was tired of having doors slammed in his face as he was trying to help kids who might otherwise get into trouble.

Several commissioners expressed sympathy and support for Bridges and his program, and said they’d do what they could but that they couldn’t promise him money. Commissioner Ronnie Peterson, whose district represents Ypsilanti, said that perhaps it was time to review this policy of requiring an audit. Saying that Gunn had whispered into his ear, Peterson informed Bridges that the two of them would pay for an audit, and that he’d provide a referral to an accountant. Referring to the other commissioners, Peterson quipped, “We’ll give tonight – we’ll ask them next time.”

Executive Session

At the end of their meeting, the board went into a closed session to discuss the settlement strategy for its police services litigation with Augusta, Salem and Ypsilanti townships. The county has not publicly announced how it will respond following a legal victory in the case. The state Court of Appeals ordered a lower court to calculate how much the townships owe the county for unpaid services, plus interest – an amount could top $2 million, not including legal fees. However, the townships have the option of appealing to the state Supreme Court. The board emerged from its executive session with no announcement about the case.

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

Next board meeting: Wednesday, March 4 at 6:30 p.m. at the County Administration Building, 220 N. Main St. The Ways & Means Committee meets first, followed immediately by the regular board meeting.  [confirm date] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public comment sessions are held at the beginning and end of each meeting.