From left: Washtenaw County commissioners Conan Smith (D-District 9, Ann Arbor) and Ronnie Peterson (D-District 6, Ypsilanti). (Photos by the writer.)

The retreat comes in the context of a projected $24.64 million general fund deficit over a four-year period from 2014 through 2017. A much smaller general fund deficit of $3.93 million is projected for 2014, but county administrator Verna McDaniel hopes to identify $6.88 million in structural changes for that year – a combination of new revenues and cuts in expenditures. If that happens, the larger projected deficit would be addressed, because those cuts and revenue increases would compound and carry over into future years.

The retreat didn’t aim to identify dollar amounts or even specific programs to be cut or supported. Rather, the conversation – which included small-group work – was designed to elicit broader priorities of the board. Commissioners did not explicitly reference priorities that had been developed for the previous 2012-2013 budget cycle, though some common themes emerged. [.pdf of 2012-2013 budget priorities]

Several commissioners stressed the importance of strategic investment to create an environment that supports the local economy. Transportation, education, and housing – particularly on the county’s east side, in the Ypsilanti area – were all cited as critical to economic development efforts. Funding strategies were floated, including the possibility of a human services millage, road tax, or “social impact” bond. Also discussed was the possibility of absorbing the road commission into county government operations.

The retreat follows a budget briefing that McDaniel and her financial staff had given to commissioners at their Jan. 16, 2013 meeting. The board has also discussed the budget process at two working sessions earlier in the year, and will follow up the retreat with a working session in April. McDaniel is expected to deliver a budget proposal to the board in September. The board must adopt the budget by the end of 2013.

Retreat Expectations, Framework

At the start of the evening, board chair Yousef Rabhi clarified that although it was a county board of commissioners retreat, he had invited other elected county officials because they work so closely together. [The county board is responsible for setting the budgets that are overseen by other elected officials.] Those “electeds” who attended the retreat included sheriff Jerry Clayton, prosecuting attorney Brian Mackie, treasurer Catherine McClary, clerk/register of deeds Larry Kestenbaum, and Evan Pratt, the county’s water resources commissioner.

Other administrators from the county who attended the retreat included Lloyd Powell, the county’s public defender; county administrator Verna McDaniel; Bob Tetens, director of the county parks & recreation commission; Mary Jo Callan, director of the office of community & economic development, and several other senior staff. Also participating in the retreat was Paul Krutko, CEO of Ann Arbor SPARK, this area’s economic development agency – funded in part by the county. Caryette Fenner – president of AFSCME Local 2733, the county government’s largest union – stayed for the entire retreat but did not participate in the discussions.

The session was facilitated by Mary O’Hare, who began by asking commissioners to state the outcomes they’d like to see from the evening. Several commissioners indicated that they wanted to emerge from the retreat with concrete action items.

Alicia Ping (R-District 3).

Rolland Sizemore Jr. noted that this would be his third budget retreat – joking that aside from Ronnie Peterson, he was now the “old guy” on the board. He hoped to get something done, since many times meetings like this just result in plans that are put on the shelf.

Alicia Ping agreed. She hoped the board would leave with something “actionable.” Sometimes the board develops a “40-word run-on sentence” about what it wants to do, she said, “and we never do any of it.” She’d rather see some quick wins, with actions that can have an immediate impact. She’d rather be able to emerge from the retreat with a few small items that can be tackled, rather than “overarching, grand ideas.”

Dan Smith joked that his goal was to be home and in bed by 10 p.m. He agreed with other commissioners about the need to focus on concrete actions that are within the board’s purview – items that could be brought to the board for a vote within the next year to 18 months. If commissioners simply sit around and talk about things, but never bring anything forward for a vote, then “it really hasn’t accomplished much,” he said.

Yousef Rabhi pointed out that input from this retreat will help guide the task force that’s developing the county’s 2014 and 2015 budget. So in that way, he said, the direction given by the board at this retreat will result in priorities reflected in the budget, which the board will approve later this year. The task force includes senior administrative and finance staff, as well as department heads and two commissioners – Rabhi, who serves as board chair, and Felicia Brabec, chair of the board’s ways & means committee.

Kelly Belknap, the county’s finance director, was asked to provide some context for the budget discussions. She noted that setting the budget is one of the board’s biggest responsibilities, and the staff looks to the board to help set the budget’s priorities. Many services are mandated by the state, but the board can prioritize the level of service that the county should provide above the minimum mandates. The board’s priorities will become part of a “toolkit” that each county department receives as it prepares its piece of the budget and business plan, Belknap explained.

For the next two hours, commissioners and other elected officials and staff broke up into small groups focused on six key areas: (1) labor force sustainability/internal equity; (2) environmental impact and mobility in Washtenaw County; (3) economic development; (4) human services/safety net; (5) mandated service provision/resources; and (6) long-term fiscal stability.

When the group reconvened, they discussed the outcomes of the small group work. This report summarizes that discussion.

Environmental Impact & Mobility

The category of environmental impact and mobility included: issues related to the condition of roads and infrastructure; the county road commission; transportation – both motorized and non-motorized; and parks and open spaces, including the parks & recreation commission.

Dan Smith (R-District 2).

Andy LaBarre reported out from the small group discussions in this category. The first theme was easy to identify, he said: better roads. He, Dan Smith and Evan Pratt had discussed possible funding strategies, such as taxes – “the T word,” LaBarre joked.

Another theme is to continue expanding non-motorized connections, LaBarre said, and to do both motorized and non-motorized projects in tandem.

Referring to the issue of taxes, Pratt added that “the other party of T is tangible.” The idea is to have a public process that clearly defines what taxpayers will receive if they are taxed at different levels. People agree that roads are in bad shape, but residents need to give input about “the level of pain tolerance,” Pratt said – that is, how much they’re willing to pay in taxes to improve the roads.

Conan Smith raised the issue of consolidating the road commission, saying he wasn’t sure if it was a budgetary issue for this year, but it’s certainly a potential budgetary issue for future years. [Smith was referencing amendments to Section 46.11 of Public Act 156 of 1851, which allows for county boards of commissioners to transfer the powers of the road commission to the county board.] There’s a sunset to that law, he noted. From Section 46.11:

(s) Before January 1, 2015, by majority vote of the members of the county board of commissioners elected and serving in a county with an appointed board of county road commissioners, pass a resolution that transfers the powers, duties, and functions that are otherwise provided by law for the appointed board of county road commissioners of that county to the county board of commissioners.

“If we’re going to have that conversation, we need to have it within the sunset,” Smith said. “If we make that decision, it has budgetary implications – that’s all I’m saying.”

Ronnie Peterson asked Smith if he wanted to add that item to the list of budget priorities, joking that, “We need to stir up something before we leave today. I’m sure I’ll get some phone calls tonight.”

Dan Smith agreed with Conan Smith. They need to start the discussion about whether it makes sense to take over the road commission, he said. “I’m certainly not interested in fixing a problem that doesn’t need it,” Dan Smith added. But they should have that discussion and make a decision, one way or another.

Toward the end of the retreat, Peterson returned to the issue of transportation by raising the topic of regional or countywide transit. He noted that the issue hadn’t been discussed during the evening. LaBarre pointed out that the general topic of transit had emerged, but nothing specifically about the regional transit authority or the countywide effort.

By way of background, the new southeast Michigan regional transit authority (RTA) was created by the state legislature at the end of 2012. Its geographic region includes the city of Detroit and counties of Wayne, Macomb, Oakland and Washtenaw, and is intended to coordinate regional public transportation initiatives. The separate effort to expand transit within Washtenaw County – which involved setting up a countywide Act 196 transit authority last year – was spearheaded by the Ann Arbor Transportation Authority but ultimately did not garner enough support from local municipalities to move forward.

Peterson wanted to put the issue of transit on the table. It’s a major topic of discussion among the county’s urban municipalities, he said. Whatever form it takes, enhanced transit needs to be discussed and the county must play a role in that, he said. “I think people are waiting for us to make a statement.”

Environmental Impact & Mobility: Parks & Rec

Related to the county’s parks & recreation, commissioners highlighted the renewal of a millage for capital improvements that’s expected to be on the ballot in 2014. The board should also think about how to “recharge” the parks & recreation commission for the next generation, LaBarre said. He noted that there are some “long-time champions” on the parks & rec commission who will likely be leaving, so the county board – which appoints the parks & rec commissioners – needs to be thinking about how to cultivate new members.

Conan Smith suggested that the parks & recreation commission needs to have that “longevity” conversation itself. [Smith is one of three county commissioners who also serve on the 10-member parks & recreation commission. Other county commissioners on WCPARC are Dan Smith and Rolland Sizemore Jr.] It’s an awkward conversation to have, Smith noted. A lot of great people have been there for more than 30 years, he said. “If they love the parks commission, they have to be concerned about its viability over the long-term just as much as we are.” He felt that if the parks commissioners address the issue, they might come up with helpful ideas.

Environmental Impact & Mobility: Other Appointed Commissions

Ronnie Peterson asked if the same type of conversation about succession planning should take place at the county road commission. [The commission is composed of three road commissioners, who are also appointed by the county board. One of them, Fred Veigel, has served since 1991, and also serves on the parks & recreation commission. Other road commissioners are Doug Fuller, appointed in 2008; and Ken Schwartz, appointed in 2011 after losing his 2010 re-election bid for the District 2 seat on the county board.]

Rolland Sizemore Jr. (D-District 5)

Peterson framed his comments in terms of the services the state has asked or mandated that local governments to deliver. Some of the appointed county commissions – like the road commission or parks & rec commission – directly oversee the delivery of services, he said, with fewer resources from the state and county. Ultimately, the elected board of commissioners has responsibility. Peterson noted that some appointed commissions haven’t reported back to the county board in more than a decade – if at all.

Some of these appointed commissions might not serve their purposes anymore, Peterson said. It’s important to ask “what should county government look like” in the coming years, he said, especially as employees have been asked to work for less compensation than in the past. The county needs to be more thoughtful about how it designs programs equal to its revenue, he said.

Conan Smith responded, saying that Peterson’s comments tie in to discussions that the board has had about the need to look at the number and structure of its appointed boards, commissions and committees, and about how to make those groups more effective.

Andy LaBarre, who chairs the board’s working sessions, committed to putting that issue on the agenda for a working session later this year.

Smith also raised the challenge of providing sufficient staff resources to support the work of appointed boards and commissions. He said he’s served on many boards and committees over the years, and “to be on a board that has no resources, that has no staff support, is a waste of my time.” So the county needs to think about how to effectively provide resources to its appointed boards and commissions, so that those groups can achieve the missions they’ve been charged with.

Yousef Rabhi said that’s why he appreciated the comments that Peterson had made during the March 6, 2013 county board meeting the previous night, regarding the county’s food policy council. [Rabhi, who serves on that council, had mentioned the possibility of asking the board for funds to hire staff support for the council's work. Peterson had raised concerns, indicating that he wanted to have a broader discussion – possibly at a working session – to develop a process for funding projects that other commissioners might want to bring forward.]

Many commissioners agree that it’s important to find a way to fund the work of these appointed entities, Rabhi said, but it’s important to do that fairly.

Smith suggested tackling it in a phased approach. The board doesn’t have to do it all at once, he said, but it’s important to have a strategy in place and a way to implement that strategy. “Phasing is fine with me,” he said. “The absence of a strategy and absence of resources is not fine.”

In the foreground is county board chair Yousef Rabhi (D-District 8), at the table with county clerk Larry Kestenbaum.

These issues also incorporate the idea of public engagement, Rabhi said, and how the county works with citizens to engage in policymaking that is ultimately the county board’s responsibility. The food policy council, for example, includes citizens from the community who’ve been appointed to develop policy recommendations for the board. That model can apply to all of the other service areas, he said. “It’s a way to engage citizens in the decision-making process, and there’s a lot of power to that.”

As part of that process, there needs to be a built-in way of reporting the work of these commissions and committees, Rabhi said. For example, these entities need to provide minutes of their meetings by posting them online and making them available to the public. All of these things need to be part of the discussion on building a more engaged public, he said.

Peterson cautioned against creating too many appointed entities, saying that he agreed with some conservatives who believe there’s “too much government within government.” In some cases, the work of these appointed entities might be more appropriately integrated into the work of county departments. “Sometimes you wonder ‘Why are they there?’” he said, referring to the appointed entities.

Economic Development

Yousef Rabhi reported on the small group work for the category of economic development, highlighting some commissioners’ interest in investing in the east side of the county. Issues included the role of government in job creation, as well as providing stable schools and adequate infrastructure. Also discussed was the idea of investing in people or in an environment that supports business, rather than investing in specific projects.

Alicia Ping elaborated, saying that the last item was a direct reaction to Ypsilanti’s Water Street project. [In the late 1990s, the city of Ypsilanti took on millions of dollars in debt to buy and prep about 38 acres of blighted property off of Michigan Avenue, next to the Huron River, for redevelopment that has not materialized. The county parks & recreation commission is working with the city possibly to build a new recreation center on part of that site.]

Instead of investing in projects like the Water Street development, Ping said, the idea is to invest more broadly to build an environment that creates jobs, as well as a workforce that can fill those jobs. “How can we be the catalyst for that – not the creator, but the catalyst?” she asked. That might mean investing in infrastructure, for example. As she has observed in the past, Ping noted that in some areas of western Washtenaw County, no high-speed wireless Internet service is available, and people can’t work from home. As another example, Ping pointed to the county’s Seeds for Change initiative, to provide job training in the food sector in partnership with Washtenaw Community College. How can the county do that same kind of thing for others, she asked – not just people who are dislocated from their job, but also for people who are trying to plan for their future? How can the county help facilitate that type of education to develop the local workforce?

Andy LaBarre (D-District 7).

Rabhi felt that this kind of workforce development connected to the conversation about mobility. Transportation is a barrier, too – because maybe the jobs aren’t located near where people are living, he said. Another issue raised during the small group work in the category of economic development was affordable workforce housing. “If the jobs aren’t where people are living, how do we create housing for people where the jobs are?” he said. So maybe part of the solution is transportation, and part of it is workforce housing, Rabhi said.

Another economic development issue raised was the Ypsilanti area school system. Conan Smith elaborated, saying the discussion had revolved around what the county can do to create an environment for investment in places where “it’s most systemically impactful for that investment to happen.” Regarding the Ypsialnti area schools, Smith described it as a big issue that needs a holistic discussion at the board level.

There are two systemic problems on the county’s east side, he said. The employment issue is a serious challenge. “You cannot have a prosperous, sustainable community with the levels of unemployment that you see over on the east side,” Smith said.

There’s also the question about the ability of government to provide basic services, if it’s not generating the revenue necessary to sustain those services. That all comes down to the market for property – especially residential property – in the Ypsilanti area. “Right now there’s no market, and property values continue to decline on the east side,” Smith said, so property tax revenue continues to fall. “If we want to change that dynamic, we have to change the competitiveness of the housing market,” he added, as well as the competitiveness of the commercial and industrial markets.

One strategy for improving the competitiveness of the housing market would be to improve the quality and competitiveness of the school system overall, he said, but also to present a compelling reason for someone to compete for housing in that area. By looking at the school system and the opportunity for children there, Smith said he thinks both issues could be addressed.

Smith suggested expanding the Perry Preschool in Ypsilanti, noting that it was recently touted on This American Life as the nation’s signature pre-K program. Access to that program could be expanded throughout the Ypsilanti school district, he said, which also serves a social service function. There are a lot of parents at or below the poverty level who struggle for childcare services, he said, which creates a barrier for them to go to work. Even when jobs are available, childcare can sometimes be an obstacle.

Smith suggested tying together that pre-K effort with a universal college education component, which could be accomplished through “Promise Zones” or other methods. It creates incentives for current parents in the school district who are sending their kids elsewhere – to charter schools or schools of choice, for example – to bring their kids back into the Ypsilanti area district. He said there are about 2,000 students who fit that category, or about $14 million in state funding that the district isn’t receiving. Creating an incentive for those students to return would help increase revenues to support the quality and sustainability of the school district, he said.

What if living on the east side gives you the opportunity to send your kids to a nationally-known preschool program – and is coupled with the chance to send them to a renowned post-high school institution? Smith ventured that “has to make you think twice when moving to Washtenaw County about choosing that as the place to live and invest – which transforms the market around housing. I think it’s one of the most systemic projects and strategies we could spend some time on.”

By way of background, Smith had made a formal presentation to the board on the issue of revitalizing the county’s east side at a Dec. 7, 2011 board meeting. Smith, who served as board chair at the time, suggested a range of strategies, including the possibility of putting a new countywide millage or Headlee override on the ballot in 2012 to raise revenues. The board did not pursue his proposal.

There is also a county connection to the new Ypsilanti Community School District – a consolidation of Ypsilanti and Willow Run districts. Tony VanDerworp, the county’s economic development officer, is a board member of the new consolidated district.

Human Services/Safety Net

In the category of human services, access to mental and public health services was identified as a priority. That access might be related to transportation, as well as program availability and capacity to serve all those in need.

Greg Dill, Washtenaw County’s infrastructure management director, talks with county treasurer Catherine McClary.

Ronnie Peterson noted that as the county shifts the location of some of its offices – in part to reduce costs by centralizing operations – in some instances it becomes more challenging to meet the needs of clients, he said.

Alicia Ping described a concept of taking county services “on the road.” Like a bookmobile, the county’s public health department could have one mobile point of service, which would make stops throughout the county – in Manchester, Chelsea, Whitmore Lake and other locations, staying at each spot for a few days. That way, she said, people who have transportation challenges could more easily get access to these services.

Conan Smith elaborated on the issue of program capacity:  Does the county have enough employees to provide the services that residents need?

The other thing that stood out in the notes from these small group discussions, Smith said, is the need for innovative or new financial tools to meet these challenges – a millage, bonding or tax increment financing. Catherine McClary added that the phrase “financial tools” might not be direct enough. The suggestion was for a human services millage, she noted. Smith agreed, adding that another tool could be a “social impact” bond.

Another theme from this category was to focus on the welfare and root causes of issues related to human services. The idea is to make a “more front-end investment,” Smith said.

A final concern that emerged from the small group work related to the impact of external factors on the county’s ability to provide services. For example, what happens if federal sequestration continues? What happens in a prison-privatization scenario, with possible increases in recidivism and its impact on the county?

Mandated Service Provision/Resources

The category of mandated services focused on serviceability levels and the board’s responsibility for providing mandated services. Felicia Brabec reported out from the small group work in this category, noting that the main theme centered on revenue, which relates to the levels of service that the county can afford.

Conan Smith argued that state-mandated service levels should be interpreted at the “absolute possible minimum.” Beyond that, every other dollar should be invested strategically, he said. That might mean investing in higher levels of service for those services that are mandated. But he indicated that levels of serviceability should be a county board decision, not one made by the state. “I don’t give a crap about what the state tells me to do anymore; they clearly don’t have the prosperity of my community in mind.” He joked that his wife “will probably beat me up when I get home” because of that statement. [Smith is married to state Sen. Rebekah Warren.]

Felicia Brabec (D-District 4)

Catherine McClary said there’s a need to have a public discussion about what loss of services the community is willing to tolerate. Yousef Rabhi reported a comment that sheriff Jerry Clayton had made during the small group discussion. Clayton had said that from a pragmatic standpoint, he would deal with whatever budget the county board gave the sheriff’s office. But a cut in the budget means a cut in services. So the board needs to weigh its priorities when making cuts, Rabhi said.

Dan Smith noted that budget cuts quickly become a “complex piece of machinery.” The board could define the bare minimum mandate for the register of deeds office, for example. Perhaps that means it’s open only four hours on Monday morning, he said. But the potential repercussions might be that it becomes very difficult to buy and sell property in Washtenaw County – so the backlog of paperwork grows and closing on a new house takes a lot longer. That would hurt economic development, he said. His point was to illustrate how complex and interrelated these services are.

Continuing the example of the register of deeds, Rabhi added that this kind of work needs to be done – and it would just take longer, if fewer resources exist to do the work. McClary elaborated, saying that if the county has a furlough day and its offices are closed, people could make payments to the county through their banks. But if those payments aren’t being processed by the county in a timely way, the money isn’t going into the county’s accounts. So there are external issues related to economic development, but also internal issues related to the county’s fiscal stability. The example that Clayton gave, McClary reported, is whether the county will tolerate a five-minute response time from the sheriff’s office, or is 10 minutes good enough, even if someone is injured?

Dan Smith noted that if you reduce those mandated levels of service in public safety and justice, then crime might increase. He said he understands Conan Smith’s point, “but when you start tweaking those dials, the unknown ramifications quickly start to come forward.”

Conan Smith said his point about mandates wasn’t to suggest that the current levels of service should be reduced. Rather, he said he doesn’t want the state’s mandate to drive the county’s decision-making process about appropriate investments. “Let’s sideline that as much as possible,” he said. Instead, the question should be asked from the county’s perspective: “What is our desired serviceability level, as opposed to what the mandate is?”

Dan Smith pointed out that it’s a very hard discussion to talk about what levels of serviceability should be above the bare minimum mandate. Conan Smith agreed, adding that “I think we should have those hard discussions.” Especially if the board decides to move to a four-year budget process, then commissioners need to have these hard discussions this year, he said.

Andy LaBarre summarized Conan Smith’s point this way: By minimizing the definition of what’s mandated, the county maximizes its flexibility.

Collaboration was another theme identified in this category, Brabec said. An example cited was a software system that’s being used by both the treasurer’s office and the clerk/register of deeds, which helps link departments and cut costs.

Labor Force Sustainability/Internal Equity

Alicia Ping described the small group discussions for the category of labor force sustainability and internal equity. She reported a suggestion to do a compensation study using an organization like the Michigan Municipal League, which is based in Ann Arbor. Another suggestion is to look at part-time contractual workers as an option, but not a long-term solution. Also, the idea was raised to focus on succession planning and training the workers of the future.

From left: Washtenaw County public defender Lloyd Powell and Brian Mackie, the county’s prosecuting attorney.

Yousef Rabhi described the succession planning as a contrast to the model used by Lloyd Powell, the county’s public defender. In the public defender’s office, Rabhi said, young people are coming there to get experience. The idea is that it’s fine to provide experience for entry-level workers, but that approach shouldn’t be used to replace full-time staff, he said.

Ping reported that other ideas from the small group work included the need to update the county’s nepotism policy, and to restore the county’s commitment to professional and educational development. Another suggestion was to maintain the size of the county’s staff.

Conan Smith elaborated on that last point, saying he believed the county had already cut its capacity so severely that maintaining current staff levels ought to be a priority. Further reductions would result in community impacts that aren’t acceptable, he said.

Dan Smith noted that it’s important to keep in mind the cost of an employee, but also the value that taxpayers get as the result of having that person employed. The board needs to craft policies and make budget decisions so that “we continue to get high value for our expenditure,” he said. For example, if the organization becomes a training ground for people, where workers stay for 3-5 years then move on to something else, it’s great for the employee but perhaps not so good for the county, he said. In that scenario, the county is spending taxpayer dollars constantly educating employees, compared to a situation where an employee stays for a career with the county. “Finding the right balance is difficult,” Smith said.

Rabhi pointed out that turnover is also a factor. The county needs to compensate its employees adequately to attract and retain people who are valuable and who can provide good services to residents. Dan Smith noted that the county has a lot of skilled employees with a lot of experience who deliver high value for what they’re being paid. “That’s a great taxpayer benefit,” he said.

Conan Smith said he was interested in expanding a compensation study to also encompass staff motivation. You don’t pursue a career in government with the intent of becoming a millionaire, he said. Your motivation is usually more social – the desire to have an impact on the community, to be a civil servant, he said. So how can the county create an environment where that motivation stays high, and people don’t want to leave? Some of that is the compensation structure, he said, but some of it is “How awesome is my job? Am I making a difference that matters to me?”

Dan Smith said it’s easy for boards – whether in government or private corporations – to think that money and compensation are the solution. It’s an easy solution to put in place, he noted, but it really papers over problems because the underlying problems don’t go away.

Rabhi added that it relates to equity, too. If you don’t feel you’re being treated fairly, then that makes your job more miserable. A compensation study would help flesh out some of these issues, he said.

Ronnie Peterson urged that rank-and-file employees should be involved in designing the study, and should be part of any discussion about what it would take to entice employees – both to join the organization, and to stay there. Right now, employees have sacrificed and have shown commitment by staying, despite the sacrifices, he said. Years ago, employees sought out the county because of its reputation, he said. How can the county recreate that environment, even as a smaller organization? Employees are public servants, not public slaves, Peterson said. Employees should be fairly compensated for their labor.

Long-Term Fiscal Stability

Reporting on the category of long-term fiscal stability, Alicia Ping identified the common theme from the small group discussions as information. Commissioners want more information, she said, including information related to the impact of federal sequestration cuts and general trend data.

From left: County administrator Verna McDaniel talks with Mary O’Hare, who facilitated the board retreat.

There was also some interest in developing different versions of the upcoming budget, based on different revenue assumptions.

When looking at the economy, Dan Smith noted that it’s been an interesting 5-6 years, or even decade, and most people agree that it’s been a once-in-a-lifetime experience. The question is: What’s the future going to look like? In developing a budget, does the county make projections more in line with the long-term historical past? Or do they project a future based on very conservative assumptions? Both approaches have implications for the budget, he said. Smith said he doesn’t know what the answer is, but those decisions will have a compounding effect on the budget.

Conan Smith felt that the county’s finance team has been keenly focused on the county’s long-term fiscal stability. What the board needs to do is to focus on community impacts that result in long-term sustainability and stability. They could take a conservative fiscal approach and focus on things that they can control, like the county’s budget, he said. They can control costs and not make structural investments that result in long-term, compounding costs. In contrast,  other actions could be more risky, he said, but might offer a different community and fiscal impact – like investing in improvement of the county’s property value base. Over the long-term, it could result in the restoration of prosperity and property values.

Smith said the county doesn’t control the market, but the board ought to have a discussion about what the county can work to influence. Right now, economic development is not a primary focus for the county programmatically, he said, but he felt it’s an area that should receive increased attention, in terms of the investments that the county is making. For some county employees who are leading current programs, it might mean a wholesale revamp of how they do business. It goes back to investing in root causes instead of immediate pain, Smith said. Instead of putting a band-aid on a wound, the goal is to make sure the wound never happens. Those are tough decisions to make, but the board is doing a disservice to the community if it’s not at least having a conversation about these issues.

Next Steps

Mary O’Hare wrapped up the retreat by telling commissioners that the discussion would be summarized and provided to them, to use as they continue setting priorities. Andy LaBarre, chair of the board’s working sessions, reported that a working session on April 4 is scheduled as follow-up to the retreat.

Ronnie Peterson wanted to know how this process falls in line with the board’s existing budget timelines. He noted that there’s some urgency with this, as the board works to develop the 2014-2015 budget.

County administrator Verna McDaniel reviewed the timeline and guidelines that the board had adopted at its Jan. 16, 2013 meeting. [.pdf of timeline and guidelines] That timeline includes:

• March-April: Budget preparation with county finance staff and organization.
• April: 2013 equalization report delivered to the board.
• May: Board leadership gets budget development update; full board gets revised financial State of the County presentation.
• May-June: Meetings with administration, finance and organization to review all options & define budget targets.
• June: Board leadership gets budget development update.
• July-August: Development of administrator’s recommended budget.
• August: Board leadership gets budget development update, and board holds preliminary budget review sessions.
• September: Presentation of administrator’s recommended budget.
• Sept.-Oct.: Deliberation on budget at Ways & Means Committee meetings.
• October: Public hearing on budget.
• November: Board adopts budget.

McDaniel noted that the board chair, Yousef Rabhi, as well as Felicia Brabec, chair of the board’s ways & means committee, are both members of a budget task force that includes key staff and administrators.

From left: Washtenaw County clerk Larry Kestenbaum and sheriff Jerry Clayton.

Conan Smith suggested holding a working session at some point about potential millages. He noted that the issue of revenue was mentioned during the retreat in connection to several areas. If the board is considering a millage in 2013, they need to have that discussion fairly quickly, because there’s a statutory timeframe for putting a millage on the ballot. More importantly, he added, is the need to build up public will for a millage. Maybe there’s not the will to have that conversation, Smith said, but he did want to raise the issue.

Peterson noted that some of these issues are political decisions, and should be separated out – like whether to seize control of the road commission, he said. Another example is whether to support expanded public transit, he said. These issues don’t need to be tied to the budget timeline. He felt that the board might need an extra meeting to deal with these broader questions.

The economy is rebounding, Peterson said. Ann Arbor and some other communities are doing extremely well, although the east side of the county is still hurting. He said the board needs to schedule at least one more session to talk about these issues.

Rabhi agreed, suggesting that they devote future budget sessions to specific topics, like transportation. He said he appreciated the dialogue that they’d had during the retreat. It’s important to take a step back and ask what they’d like the county to look like, he said. It’s not a question they can answer in one night, but it’s something they should keep in mind as they go through the budgeting process.

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

Next regular board meeting: Wednesday, March 20, 2013 at 6:30 p.m. at the county administration building, 220 N. Main St. in Ann Arbor. The ways & means committee meets first, followed immediately by the regular board meeting. [Check Chronicle event listings to confirm date.] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public commentary is held at the beginning of each meeting, and no advance sign-up is required.

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County officials say the new contract will provide time for ongoing talks to develop a longer-term solution to animal control services in Washtenaw County, including services that are mandated by the state. During the rest of 2012, the county will work with HSHV to determine the cost of an animal service unit, and eventually will issue a request for proposals (RFP) to solicit bids for the next contract.

A work group, led by the sheriff, is tasked with determining the cost of animal control services. The work group will involve other jurisdictions in the county that have animal control ordinances – like the city of Ann Arbor and Ypsilanti Township – but that do not currently make financial contributions to the county’s animal control services. The board plans to appoint commissioner Rob Turner as a liaison to the work group. The group will present a report to the board by Sept. 15 that recommends a final cost methodology and animal control services budget for 2013, based on an agreed-upon scope of services.

In an amendment to the resolution that was proposed from the floor, the board also created a separate task force to develop an animal control policy for the county. The policy will be used to guide the scope of services for the RFP. Meetings of the task force will be open to the public and to any commissioner who wants to participate. The task force will submit a preliminary report to the board by May 15, with a final report due by Oct. 15.

The budget approved by the county board for 2012 cut funding for animal control services to $250,000, although during last year’s budget deliberations commissioners also discussed the possibility of paying an additional $180,000 to HSHV – if the nonprofit took over work previously done by the county’s animal control officers. That brought the total amount budgeted for animal control services to $430,000 in 2012. HSHV officials have said that even $500,000 wasn’t sufficient to cover costs for all the work they do.

The new $415,000 contract approved on Feb. 15 does not include the $180,000 that the county has budgeted for its own animal control officers. Instead, the board is allocating an additional $165,000 from its general fund balance, to be added to the previously budgeted $250,000 for animal control services in 2012.

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

Board chair Conan Smith reported that HSHV board chair Mike Walsh had been sent a draft RFP, including a “scope of work” for animal control services that the county believes are mandated by the state. [.pdf of draft RFP] Representatives from the county and HSHV are planning to meet soon to continue negotiations, Smith said. HSHV’s current contract, for $500,000 annually, ends on Dec. 31. The county has budgeted a total of $430,000 annually for 2012 and 2013, which HSHV has indicated is insufficient for the work required by the county. [See Chronicle coverage: "Animal Control Mandate Unresolved" and "Washtenaw County Budget Set for 2012-2013"]

When pressed by Peterson about what might happen after Jan. 1 if a new agreement isn’t reached, Smith said that the county has budgeted roughly $25,000 a month for animal control services, and that county administrator Verna McDaniel has investigated other options for service providers, finding at least two. For contracts under $25,000, the county administrator has the discretion to authorize those agreements. Such a contract would be temporary, Smith said, while negotiations with HSHV continue.

Some commissioners wanted to ensure that a new long-term contract with HSHV – or perhaps another provider – would be brought to the board for approval. They noted that the funding for animal control services was part of the sheriff’s budget now, and that the sheriff had authority to enter into such contracts. After further discussion, Smith proposed a resolution amending the 2012 budget line item for animal control services, stating “No contract for animal control services that extends beyond 60 days shall be entered into without approval by the board of commissioners.” That amendment passed on a 10-1 vote, with dissent from Barbara Bergman.

This brief was filed soon after adjournment of the county board’s Dec. 7 meeting. A more detailed report will follow: [link]

Bill Reynolds, Washtenaw County's deputy administrator, with a framed copy of the county's "guiding principles."

The discussion was another step toward developing a framework that county administrator Verna McDaniel and her staff can use in their budget planning for 2012 and 2013, when the county faces a projected $20.9 million deficit. The session followed a five-hour Jan. 29 retreat. The board also plans to continue their budget talks on Feb. 23, after their regular administrative briefing.

Conan Smith, chair of the board, told the group he hoped they could form an outline of their priorities – not in terms of programs, but at a policy level. He said that focusing on specific programs at this point would limit the administration’s flexibility for future restructuring.

During the two-hour session, commissioners talked about the importance of providing a safety net of services for residents who are most in need – perhaps through a combination of the county’s own services, and partnerships with outside agencies. Though some commissioners expressed concerns about privatizing, there seemed to be consensus about exploring ways to market the county’s infrastructure services – like payroll processing and human resources – to other local municipalities.

They discussed the need for more self-reliance on local resources, as opposed to state and federal funding – while acknowledging the dependence that many county programs have on state and federal grants. The board also talked about the importance of balancing short-term budget needs with long-term investments that could bring more significant structural savings in future years.

Also during Wednesday’s retreat, some commissioners noted the importance of keeping all budget discussions in public view. The retreats – unlike the board’s regular meetings and working sessions – are not televised, though they are open to the public. In addition to county commissioners, the retreats are attended by other elected officials and county staff.

The bulk of Wednesday’s session focused on trying to craft a framework to prioritize “county business.” Of the five topics sketched out as possible parts of that prioritization framework, the group tackled three on Wednesday night, which can be recast as grouped questions: (1) Is a service mandated by state law? (2) Is a service part of the basic reason county government exists? Does a service address longer-term root causes of problems? Does a service address crisis situations? and (3) Does the county itself currently operate a program? Does the county invest in some outside agency to provide a program?

Because of time constraints, commissioners decided to continue discussion on the remaining two topics at their next session. Those topics are: (1) Is it better to provide world-class services, but fewer of them? Is it better to provide a broader range of services, but at lower levels? and (2) Should commissioners prefer solutions that have a sustainable, long-term budget impact or those that address immediate needs?

Before tackling these questions, commissioner Ronnie Peterson asked whether they should revisit the county’s “guiding principles,” which were adopted several years ago. Will their decisions be consistent with those? They should either abide by the principles, he said, or change them. Bill Reynolds, deputy county administrator, fetched a framed copy of the guiding principles that was hanging in the boardroom. The principles are:

1. Ensure long term fiscal stability for the county.

2. Reduce the cost of conducting the county’s business.

3. Enhance customer service.

4. Provide the necessary knowledge, skills and resources to county employees to carry out these principles.

5. Ensure adequate provision of mandated services.

6. Focus on the root causes of problems that affect the quality of life of county citizens by aggressively pursuing prevention strategies

7. Provide leadership on intragovernmental, intergovernmental and intersectoral cooperation and collaboration aimed at improving services to county citizens.

Smith suggested that Peterson’s question should be the topic for a future Wednesday retreat discussion. Kristin Judge said she also wanted to make sure they sought constituent input as the budget process moves forward. It’s important to get feedback about what priorities residents have regarding county services, she said.

This report summarizes the key points of the board’s two-hour discussion.

Mandated vs. Non-Mandated Services

In introducing the topic of mandated vs. non-mandated services, Conan Smith (D-District 10) noted that the priorities in Lansing – where the state legislature sets mandates for services that local governments must provide – might not be the county’s priorities. How does the board answer the question of serviceability, or guide the administration to determine what levels of mandated services they should provide?

Leah Gunn (D-District 9) characterized this as a crucial issue. “World-class service may not be attainable,” she said. Many of the non-mandated services that the county provides affect people who are most in need, Gunn noted. When asked by Smith to identify some principles that the administration can use to determine levels of serviceability, Gunn suggested getting guidance from the county’s department heads and other elected officials who lead departments, like the treasurer and clerk. She said she knows that Brian Mackie, the county’s prosecuting attorney, disliked the exercise they did during the last budget cycle when departments were asked to identify impacts if their budgets were cut 5%, 10%, 15% or 20%. But that was helpful, she said, because department heads know their operations much better than commissioners do.

While department heads are the best to determine the impact on their operations, Gunn added, it’s up to the board to decide which of those impacts are acceptable. Barbara Bergman (D-District 8) noted that some savings might not be worth it, if the consequence of cuts is too great.

From left: Washtenaw County commissioners Ronnie Peterson and Yousef Rabhi.

Ronnie Peterson (D-District 6) said they need to keep in mind three different categories: (1) mandated services for departments led by elected officials; (2) mandated services for departments led by staff; and (3) non-mandated services.

Dan Smith (R-District 2) agreed, saying the state had determined that certain services are important enough to mandate, and that most of those mandated services are in departments led by elected officials. Those services are deemed to be core, he said, citing several examples: a place to put people who break the law; a place to file deeds; a way to ensure that flooding is under control. The board needs to keep that distinction in mind during these discussions, he said.

Wes Prater (D-District 4) said that in general, he wanted to see a focus on performance measures and outcomes, to help determine serviceability levels.

Dan Smith pointed out that they can’t ignore the impact of decisions in Lansing. It’s probably too late for this budget cycle, he noted, but they need to lobby for relief from some of the state’s unfunded mandates – they need to lobby for additional state funding for those services. For non-mandated services, he observed that sometimes the county gets a huge return on its investments, by leveraging county dollars to get state or federal funding for programs. When that’s the case, “we should keep doing it,” he said.

Gunn added that lobbying the federal government on these issues is also important.

Regardless of lobbying efforts, Prater said it’s clear the county will need to do more on its own in the future. If they depend on Lansing, “I think you’re only wishful thinking.” The same is true at the federal level, he said. Despite the success of Rep. John Dingell in getting earmarks for his district, which covers much of Washtenaw County, that funding will might evaporate soon, Prater said.

Yousef Rabhi (D-District 11) expanded on Prater’s point, saying the county should try to relocalize what it does, and become self-sufficient as much as possible. That’s what local government is all about, he said.

But Peterson cautioned against taking that approach to the extreme, saying that state and federal funding is a plus for the county. One of the reasons the county has world-class departments is that they’ve been aggressive – and successful – in getting state and federal dollars, he said. Do you walk away from those population groups that are served by these programs? Most of those programs support families and children, he noted. The programs get federal funds, but they aren’t mandated. He urged the board not to abandon these people on principle. “It’s about the babies,” he said.

Bergman said they should at least question how much real benefit they’re getting from programs supported by the county’s general fund, even if they leverage federal dollars.

Prater clarified that he wasn’t advocating to abandon what they already have. If the county can hang on to the funding it’s got, that would be a success, he said. But commissioners need to anticipate that state and federal funding might be eliminated – that’s likely the case with state revenue-sharing dollars, he noted – and they should figure out how to deal with a decrease in outside funding.

Rabhi, too, said he wasn’t advocating to let go of all state and federal funding. But it’s important to look for ways that county government can be more independent.

Washtenaw County commissioners Leah Gunn and Dan Smith.

Rob Turner (R-District 1) brought the conversation back to the underlying issue: The county is facing a $20.9 million deficit. The state and federal government has evolved to make local governments dependent on them, he said, by taking local taxpayer dollars, then returning only a portion to local entities by funding certain programs. Local municipalities rely on the state and federal government to “give us our money back,” he said, but it’s just not happening.

The only way to address the situation is to ask every department to look for excesses in their programs and services, whether they be mandated or non-mandated, Turner said. They’re going to have to survive on less, and it will be difficult. He said he understood that cuts have already been made, but they need to do more, to squeeze out as much efficiency as they can. It should be a bottom-up process, he added, not a top-down decision.

Turner noted that he’d been on a tour that afternoon of several county facilities, and had come away more depressed than happy. [The tour included all four newly elected commissioners – Turner, Alicia Ping, Yousef Rabhi and Dan Smith – as part of their orientation to the county's operations.] Turner observed that the county provides so many great, essential services – and they won’t be able to do it all in the future.

Ping (R-District 3) agreed with Turner, saying it’s clear they can’t be all things to all people. She said their tour of the county children’s services department especially touched her heart. There are employees whose job entails both cooking and janitorial work, she noted, and counselors on the third shift do laundry as well. In many places they’ve already cut to the bone, she said, but they’ll need to do even more.

Gunn thanked Turner for pointing to the bottom line, and reminded her colleagues that in county administrator Verna McDaniel’s state of the county presentation last month, McDaniel had targeted making $8.5 million in cuts to employee compensation and benefits, and another $8.5 million in organizational changes and baseline reductions in the 2012-2013 budget. Gunn indicated that those are daunting cuts.

Conan Smith wrapped up the discussion on the topic by noting that so far, they hadn’t yet identified which non-mandated services they consider sacrosanct – which ones they’ll choose to do, regardless of state or federal support. That’s something they’ll need to address, he said.

Core Business, Root Causes or Crisis Management?

In starting the conversation on this topic, Conan Smith noted that the county exists for some purpose that’s distinct from why a city, state or federal government exists. The county supports services like the county jail, among other things. Rob Turner had previously characterized these as core businesses. How should they prioritize those services, Smith asked, compared to services that address “root causes” – one of the county’s guiding principles. [The principle states: "Focus on the root causes of problems that affect the quality of life of county citizens by aggressively pursuing prevention strategies."]

Smith said they know that when they attack root causes, there’s a long-term gain – but that gain is sometimes hard to quantify. How should they prioritize core services that don’t address root causes? Does a core service automatically take priority? And finally, how should they prioritize services that fall into the category of crisis management?

Washtenaw County commissioner Kristin Judge.

Yousef Rabhi described the role of government as providing services for those who’ve walked the length of the road, and there’s no more road for them to walk. Government is the safety net, when there’s nowhere else to turn. Of course, he added, it’s prudent to provide services aimed at preventing people from reaching the end of the road. But the county’s focus should be to support people when they most need it.

The most critical services provide food and health care, Barbara Bergman said. Leah Gunn agreed that the county’s role should be to cover holes in the safety net. But how do they do that, given the resources they have?

Ronnie Peterson said he considers core services to be those that are overseen by elected officials like the sheriff, water resources commission and clerk. But he also considers public health and mental health services to be core as well. People move to Washtenaw County for a reason, he said. And people who move here to work for the county are proud to be associated with it. The county’s reputation carries a great deal of respect, he said.

Dan Smith agreed with Peterson about prioritizing those core services for which county elected officials are responsible. Regarding root causes, he said the four new commissioners had just spent the afternoon learning about county programs focused on addressing those areas, which try to “nip problems in the bud” before they become major expenses later. Every dollar they spend on a child saves hundreds of dollars later on, he said, by keeping people out of jail, or making them healthier.

Conan Smith said this is a question he’s struggled with: How do they balance an investment in root causes today, given their declining resources? Such an investment would be important to yield a longer-term payoff, but won’t have an effect on the current budget. How do they balance their short-term goal of balancing the budget, with long-term strategic goals?

That’s the crucial question, Turner said. This is not just a two-year problem – the economic recovery likely won’t occur until at least 2015, he said. So commissioners need to factor in those long-term gains. Decisions about things like employee health care and pensions might not have a significant impact for 10 years, but they need to make those decisions now “or we’ll be revisiting this year after year,” he said.

Turner also noted that the four new commissioners had visited the county’s veterans affairs office earlier in the day. The office leverages less than $200,000 to get millions of dollars in federal funding, he noted, while providing help for local veterans. That’s what it means to do business well, he said, and the county needs to find similar areas of its operation that provide those kinds of returns for a relatively small investment.

Alicia Ping said it might take 18 years to see a payoff from investing in kids. When you visit the juvenile detention center or family court, you wonder how kids ended up there, she said.

Conan Smith summarized the point, saying the county needs to prioritize both financial and social ROI (return on investment).

Looking back at the previous 2010-2011 budget cycle, Gunn said they didn’t tackle real structural reform at the time. It’s time to address structural change, including departmental restructuring and labor costs, she said.

Wes Prater asked whether they were being realistic, in terms of their ability to address root causes. Shouldn’t much of that, for children, be the responsibility of parents? He questioned how the county should deal with that.

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

Kristin Judge (D-District 7) observed that the county’s Head Start program serves about 580 families, and parents participate, too – she’s sure they’re making a long-term difference. One of the program’s new employees had been part of Head Start as a child, she said.

Some of it comes down to the question of whether it’s the county government’s job to provide these services, Dan Smith said. Is it something that taxpayer dollars should support? Some people in the county would say that the services are important, he said, but that it’s not the county’s role to provide them, even if it’s a worthy cause or a good investment. It would be easy to tell the county administration to just provide the basics, he said, but the board needs to find a balance.

Judge said she was an advocate of zero-based budgeting – looking at what it costs to provide the county’s core services, then seeing how much was left over before deciding where to spend it.

Turner cautioned that the departments led by other elected officials shouldn’t simply get carte blanche on their budgets, even if they are core.

Running a County “Business” vs. Investing Elsewhere

Conan Smith set up discussion of this topic by asking commissioners what areas the county should itself take responsibility for.  Are there areas where the county should be aggressive about partnering with other organizations? For example, the county made a decision to invest in literacy – it helped develop the blueprint to end illiteracy, and is part of the Literacy Coalition of Washtenaw County. But the effort is being handled by others, Smith noted – that is, the county is a partner, rather than a driver. So what are the areas in which the county needs to be the primary leader, Smith asked, versus taking a secondary or tertiary role.

Dan Smith started by saying that perhaps they should look at the “transparent” services the county provides, those that taxpayers don’t see but that support the county’s operations – things like human resources and payroll. Perhaps they should explore transferring those services to a third-party provider. How much of its infrastructure does the county need to run? he asked.

Barbara Bergman said a better characterization might be “invisible” – there are many services provided that the public doesn’t see.

Conan Smith flipped that question, asking whether the county could provide those kinds of services to other local governments. He cited the example of the county taking on human resources for the Washtenaw County Road Commission, which previously had its own HR staff.

Yousef Rabhi said he didn’t like the idea of outsourcing infrastructure services, but he did favor being a place where other governments could come to for those services. The question is: How does the county market those services?

Rabhi described the veterans affairs office as a place where veterans could come and get help. If the county doesn’t offer the specific services a veteran needs, the staff would direct them to the right source. Maybe the county should take that approach on a broader level, he suggested. Sometimes they should just serve as a help desk, pointing people toward other resources in the community. But when there’s nowhere else to go, that’s when the county should provide a service. He said the county’s mission should be to make sure residents are provided for – it doesn’t matter who’s providing the services.

Wes Prater pointed out that the Washtenaw United Way’s 211 system is the kind of help desk that Rabhi described. Conan Smith said the county’s role could be to ensure that people are aware of that service. A possible framework, he said, is for the county to identify the services that its residents need, and to ensure that those services are provided – either by the county government, or some other agency. In that case, Prater responded, they need to do an inventory of services.

Rolland Sizemore Jr. (D-District 5) expressed concern that there’s a disconnect between the county board and other local governments, and between the county board and state leaders. Commissioners need to do more networking, he said. Sizemore also cautioned that they shouldn’t overburden the staff to the point that work isn’t getting done that needs to get done, but he liked the idea of providing services to other local governments. They’ve done that to some extent with training programs, he noted, but the word’s not out in the community about it.

Conan Smith said it’s a theme that comes up repeatedly – the county needs to do a better job at communicating what it does. In a sense, he added, that might be one of the “businesses” they should be in.

Going back to the topic of outsourcing services, Bergman said that the idea of privatizing scared her. She urged her colleagues to think about the possible long-term implications. As a metaphor, she posed a theoretical situation: What if they provided garbage pickup but decided to privatize that service, selling off their garbage trucks. What would happen if they later decided they didn’t like the services that a private company was providing? What would it cost to buy back those garbage trucks? [The county does not provide garbage pickup services.]

On the other hand, Bergman said, if more people know about the “invisible” services of the county, they might be able to sell those services.

Janis Bobrin, Washtenaw County water resources commissioner.

Janis Bobrin – the county’s water resources commissioner, an elected position – said they should also think about the standards and expectations they’d have for an outside service provider. What standards would they want to set so that the services remain as efficient as the county’s currently are?

County treasurer Catherine McClary, also an elected official, agreed with Bergman on the importance of looking at long-term implications. Her department handles payroll for county employees – would an outside firm be able to provide the same level of service? Whatever they decided, it would have consequences, she said.

Dan Smith clarified that his earlier remarks were just meant to talk through some of these issues – clearly there are different ways of looking at it. He noted that in his district – District 2, covering much of the county’s northeast region – there are six township boards that each have to deal with pension issues, for example. They might be happy to use the county’s resources for that, he said. Obviously the townships retain control over that decision, he added, but the county might not be doing enough to reach out to other local governments.

Prater suggested that as Smith traveled through his district, he might ask those local officials what they thought of the idea. That way, he could get a feel for how receptive they’d be. Prater noted that his own district, District 4, covers four jurisdictions in southeast Washtenaw: the city of Milan and the townships of Ypsilanti, York and Augusta. One of them might be interested in sharing services, he said, but for the other three, “it’s a turf war.”

Ronnie Peterson weighed in, saying he hoped they’d give departments a chance to streamline their operations first, before they considered privatizing.

Rob Turner said he’s not a big fan of privatizing, but there are times when it wouldn’t hurt to compare the county’s services with outside vendors. Turner, a former trustee for the Chelsea School District board of education, said it was amazing how when the school board started talking about outside services, the district’s employees found ways to streamline and save money. When the district was exploring the possibility of consolidating its bus services with the Washtenaw Intermediate School District, he said, the transportation department came up with a lot of ways to cut costs.

Alicia Ping, a former Saline city councilmember, said the city’s union contracts stipulate that if the city issues a request for proposals (RFP), the unions are offered the chance to come in at a lower cost on the project. She also cautioned commissioners not to assume that private businesses would deliver lower levels of service. There are many companies out there that are willing to go the extra mile, she said.

Kristin Judge echoed that sentiment, saying that privatization isn’t necessarily a bad word. They need to look at ways to support local businesses as well.

Prater said they need to keep in mind that the private sector needs a profit margin – but government doesn’t.

Verna McDaniel explained that most of the union contracts prevent the county from displacing workers by contracting out for services. However, she noted that when the county stops offering a service – for example, as they did when they discontinued the Library for the Blind and Physically Disabled – then there’s some flexibility. In the case of the library, those services were taken over by the Ann Arbor District Library – an entity McDaniel noted could provide the service well.

Next Steps

Near the end of almost two hours of discussion, Conan Smith asked county administrator Verna McDaniel about the budget timeline – at what point did she and her staff need the board to provide some kind of definitive guidance? Having it by early April would be fine, she replied – giving the board several more weeks to continue their budget discussions.

Smith proposed holding the next retreat on Feb. 23, from 6-8 p.m., following the board’s administrative briefing. He said he hoped they could ultimately provide McDaniel with a statement that would indicate the board’s agreed-upon outcomes and principles for investment, which could guide the staff’s budget planning.

Janis Bobrin, the water resources commissioner, hoped that the details of the evening’s discussion wouldn’t be lost. Details are almost as important as a final official statement, she said.

When Smith said that Rolland Sizemore Jr., as chair of the board’s Ways & Means Committee, would meet with McDaniel to get budget planning updates and feedback, Ronnie Peterson objected.

All of their budget-related talks should be held in the public eye, he said, adding that he even had concerns about the retreats they were holding. [Unlike the board's regular meetings and working sessions, the retreats aren't recorded for Community Television Network.] He said he certainly didn’t want any backroom meetings out of public view.

Smith said that wasn’t his intent. So he asked McDaniel if instead of meeting with Sizemore, she could give reports to the board at their regular meetings. She agreed, saying that her plan is to be very public about this process.

Wes Prater noted that Peterson has raised these same concerns at previous meetings. Commissioners need to keep everything on the table, he said, adding “we don’t have as much time as we think we do.”

Kristin Judge pointed out that this same situation had arisen during the last budget cycle, when Smith had served as chair of Ways & Means. She recalled that she and Prater had asked whether the board rules designate that the Ways & Means chair serves as a budget liaison between the board and administration – they don’t, she said. She agreed with Peterson that the board hasn’t authorized anyone to work on their behalf. They are each one of 11 commissioners, she said, and if there are budget discussions, they should all be involved. During the last budget cycle there were some “trust issues” that shouldn’t be repeated, she said.

Smith reiterated that it was not his intent to keep discussions out of public view – he said he had just wanted to give McDaniel an avenue for giving feedback.

Present: Commissioners Barbara Levin Bergman, Leah Gunn, Kristin Judge, Ronnie Peterson, Alicia Ping, Wes Prater, Yousef Rabhi, Rolland Sizemore Jr., Conan Smith, Dan Smith, Rob Turner. Other elected officials who attended the meeting: treasurer Catherine McClary, water resources commissioner Janis Bobrin. Several county staff members were also present, including county administrator Verna McDaniel; deputy administrator Bill Reynolds; Bob Tetens, director of Washtenaw County Parks and Recreation; and finance director Kelly Belknap.

Next retreat: These budget-related discussions, which are open to the public, will continue on Wednesday, Feb. 23 at a special meeting following the board’s administrative briefing, which is held to preview the March 2 board meeting. The briefing begins at 5:30 p.m. at the county administration building, 220 N. Main St. The special meeting focused on the budget is scheduled from 6-9 p.m. [confirm date]

Leading up to the city administrator’s proposed budget in April, the city council is also holding a series of work sessions on the budget. Their typical scheduling pattern is for the weeks between council meetings. But the work session on the 15th District Court was held just before the council’s Feb. 7, 2011 meeting.

Former city councilmember Chris Easthope was elected in 2008 to serve as a judge on Ann Arbor's 15th District Court. In this photo, Easthope was pointing out other judges, the magistrate and staff of the court, who attended the Feb. 7 work session along with Easthope. (Photo by the writer.)

An hour before the city council’s regular meeting on Feb. 7, 2011, scheduled to start at 7 p.m., councilmembers received a presentation from Chris Easthope on the financial picture for the 15th District Court. The court is funded primarily, but not completely, by the city. Last year, the city’s approved FY 2011 budget for the 15th District Court was $3,776,080, or around 4.5%, of the city’s $81,449,966 general fund budget.

Salaries for the three judges on the court – Easthope, Julie Creal and Elizabeth Hines – are set and paid by the state of Michigan. The judges, along with other key court staff, also attended the work session.

Easthope stressed to councilmembers that he understood the difficult position the council is in, having served on the city council himself. [First elected in 2000 to a Ward 5 seat on the city council, Easthope won a narrow victory in the 2008 race for the 15th District Court judgeship.]

The basic picture Easthope sketched out for the council was of a court that had already reduced its budget – from $4.1 million in FY 2008 to $3.8 million in FY 2011, the current fiscal year. Easthope estimated the needed budget for the court in the next two years at around $3.7 million.

Measures already implemented include optimization of staffing that has allowed a reduction in full-time employees from 40 FTEs four years ago to 32 FTEs today. Easthope also stressed that the court’s probation program, even though it is not mandated by the state, actually saves citizens money, because it offers an alternative to fines (which many defendants aren’t in a financial position to pay anyway) and jail (which may not be the best solution for mentally ill defendants).

Background: What Is the 15th District Court?

Before diving into the budget picture for the court, it’s worth considering: (1) where the 15th District Court fits in the state of Michigan’s court system; (2) what specific kinds of cases the court handles; and (3) the volume of tasks the court handles, including those that are not reflected in its caseload statistics.

Background: State Court System

Michigan uses what it calls a “One Court of Justice” system – there’s one court with various divisions. The main divisions of the One Court:

• Supreme Court [last resort, all decisions final]; number of judges statewide = 7.
• Court of Appeals [handles cases when a party wants a review of a decision that has been made by another court]; the Court of Appeals divides the state into four districts with four sets of seven judges; number of judges statewide = 28.
• Circuit Court [trial court of general jurisdiction, including criminal cases like felonies and certain serious misdemeanors, as well as civil cases involving amounts greater than $25,000];  the individual circuits follow county boundaries, with the number of judges per county set  based on caseload; number of judges statewide = 221.
• Probate Court [handles cases involving wills, trusts, and treatment of mentally ill people]; the geographic parceling out of different individual probate courts mostly follows county boundaries, with some exceptions in northern Michigan, where consolidation has taken place; number of judges statewide = 103.
• District Court [handles all civil claims up to $25,000, including small claims, landlord-tenant disputes, land contract disputes, and civil infractions]; geographically, the number of individual district courts varies by the workload; Washtenaw County, for example has three district courts – 15th District Court for the city of Ann Arbor, 14B District Court for Ypsilanti Township, and the 14A District Court (with four physical venues) for the rest of Washtenaw County; number of judges statewide = 258.

The One Court, across all its divisions, includes more than 600 judges. All three judges from the 15th District Court attended the city council’s budget work session: Chris Easthope, Julie Creal and Elizabeth (Libby) Hines.

Background: Specific Kinds of Cases

The 15th District Court’s docket, which is available online via the Judicial Information System (JIS), gives a more concrete idea of the kind and volume of cases that a district court judge handles. Here’s Easthope’s schedule for three upcoming days, as retrieved from JIS last week and annotated by The Chronicle:

MONDAY 2/14/11
AT 9:00 a.m.
MARIJUANA AA [possession of marijuana; city charter Chapter 16]
UNLICENSED [driving without a license]
DWLS [driving with suspended license]
FLS INFO PO  [giving false information to a police officer]
DWLS [driving with suspended license]
NOISE [noise ordinance violation]
DISORDERLY C [disorderly conduct]
MIP MISD [minor in possession of alcohol]
DISORDERLY C [disorderly conduct]
DWLS [driving with suspended license]
EQUIP VIOL [defective equipment]
NOISE [noise ordinance violation]
DISORDERLY C [disorderly conduct]
EXPIRED LIC [driving with expired license]
MIP MISD [minor in possession of alcohol]
DWLS [driving with suspended license]
NOISE [noise ordinance violation]
NOISE [noise ordinance violation]
OPEN INTOX [opened intoxicants]
NOISE [noise ordinance violation]  

AT 1:30 p.m.
ASSAULT/BATR [assault and battery]

TUESDAY  2/15/11
AT 9:00 a.m.
DISORDERLY, RESISTING [disorderly conduct, resisting arrest]
MIP MISD [minor in possession of alcohol]
OW INTOX [operating while intoxicated]
OPEN INTOX [opened intoxicants]
MIP MISD [minor in possession of alcohol]
DWLS [driving with suspended license]
NOISE [noise ordinance violation]  

AT  10:30 a.m.
OW INTOX [operating while intoxicated]

WEDNESDAY  2/16/11
AT 8:30 a.m.
PARKING VIOL [parking violation]
PARKING VIOL [parking violation]
TRAFFIC DEV [disobeyed traffic device ]
SPEED 1-5 [speeding 1-5 mph over limit]
PROH TURN [making prohibited turn]
FL TO YIELD  [failure to yield]
NO PROOF INS [no proof of insurance]
EXP PLT CI [expired license plate]
SCHOOL BUS [failed to stop for school bus]
IMPR LIGHTS [improper use of lights]
SPEED 1-5 [speeding 1-5 mph over limit]
TRAFFIC SGNL [failure to observe a traffic signal]
SPEED 26-30 [speeding 26-30 mph over the limit]
SPEED 16-20 [speeding 16-20 mph over the limit]
SPEED 1-5 [speeding 1-5 mph over limit]
FL SGNL/OBSV [failure to signal]
PROH TURN [making prohibited turn]
PARKING VIOL [parking violation]
ZONING CI  [zoning civil infraction]
ZONING CI  [zoning civil infraction]
ZONING CI  [zoning civil infraction]
FL STP ASSUR [failure to stop assuring a clear distance]
FL SGNL/OBSV [failure to signal]
FL TO YIELD  [failure to yield]
SPEED 11-15 [speeding 11-15 mph over the limit]
SPEED 11-15 [speeding 11-15 mph over the limit]
TRAFFIC SGNL [failure to observe a traffic signal]
TRAFFIC DEV  [disobeyed traffic device ]
SPEED 6-10 [speeding 6-10 mph over the limit]
SPEED 16-20 [speeding 16-20 mph over the limit]
SPEED 21-25 [speeding 21-25 mph over the limit]
SPEED 1-5 [speeding 1-5 mph over limit]
BASIC SPEED  [violation of basic speed law]
XWY SPD 6-10 [speeding 6-10 mph over limit on expressway]
TRAFFIC SGNL [failure to observe a traffic signal]
PROH TURN [making prohibited turn]
SPEED 1-5 [speeding 1-5 mph over limit] 

AT 9:00 a.m.
TRAFFIC SGNL [failure to observe a traffic signal]

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Background: Volume of Work – Preliminary Exams

In his Feb. 7 presentation to the city council, Easthope stressed that there’s a category of work that’s not counted for the district court’s caseload statistics, but that is nonetheless a significant additional burden on the courts resources: preliminary examinations conducted for the circuit court.

A preliminary examination is one of the steps in criminal prosecution. A defendant accused of a felony, which will be tried in the circuit court, has the right to such a preliminary exam. But it’s not the circuit court that conducts these hearings – it’s done by the district court. They’re sometimes called “probable cause hearings” because it’s an occasion when the prosecutor must convince the judge that there is at least probable cause to believe the defendant actually committed the crime they’re charged with. So the burden of proof is not “beyond a reasonable doubt” as it would be at trial.

The range of possible decisions a district court judge can make at a preliminary exam includes: (1) sending the defendant to the circuit court to be tried on the charges that have been filed against them; (2) reducing the charges and sending the defendant to whatever court is appropriate; or (3) dismissing the charges.

Council discussion after the presentation drew out the fact that the circuit court provides the physical venue for the preliminary exams, so the cost to the district court is measured in terms of their judges’ time.

Where do preliminary exams fit in the work load for the 15th District Court? Easthope told the council it’s hard to give a specific number, because those numbers are not tracked by the circuit court. He said he estimated that the 15th District Court judges conduct around 1,500 preliminary exams per year.

How does that stack up with the volume of other kinds of cases? [.pdf of caseload stats for 15th District Court 2002-2009] Number-wise, the bulk of the work handled by the court involves traffic offenses. But the estimated 1,500 preliminary examinations per year make up around 13% of the non-traffic cases handled by the court:

15th District Court Total Caseloads
            2007    2008    2009
Civil      6,701   6,683   6,624
Criminal   3,818   3,681   3,640
Traffic   29,988  25,416  20,999
Prelim     1,500   1,500   1,500

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In Easthope’s presentation, he highlighted the drop in the number of traffic cases handled by the court over the last few years. Since 2006, that number has declined by about one-third.

Budget Reductions: “The budget is the budget”

The presentation from Easthope began on a cheerful note, with Easthope thanking the council for their support in constructing the new municipal center in which the 15th District Court is now housed. He told the council they’d been in their new quarters for two weeks and that he’d picked his first jury in the new facility that very day. Initial reviews indicate that it’s a great facility, he said.

[As a member of the city council at the time, Easthope was among the councilmembers who cast votes that led to the construction of the new municipal center. He's drawn criticism for that, some of it expressed in a comment written on The Chronicle's website last year. The comment drew a sharp emailed response from Easthope to the comment's author, David Cahill, a local attorney and husband of current city councilmember Sabra Briere (Ward 1). Easthope CC-ed his email to the city council, other judges, as well as the media. Among other issues he raised, Easthope argued that he could not possibly have known he would be elected as judge in a race that included a four-way primary. After he sent the email, Easthope declined a request from The Chronicle for an interview on the subject.

The funding plan for the municipal center's construction came up a bit later in his Feb. 7 presentation, when Easthope described how the court's current revenue stream feeds into that plan. Specifically, revenue from the $10 fee that the district court can impose on all civil infraction citations is pledged to the city's funding plan for the municipal center. The fee generates between $160,000 and $220,000 a year, Easthope said.]

When Easthope introduced the other judges and staff to the council – Judges Creal and Hines, plus the court’s magistrate Colleen Currie and court administrator, Keith Zeisloft – city administrator Roger Fraser kidded Easthope that he’d forgotten to introduce the little guy who also accompanied him – Easthope’s son. Easthope handled the humor by saying that it was his bodyguard, Aidan Easthope, who specializes in security.

After the opening pleasantries, however, Easthope was down to business, saying “the budget is the budget.” He sketched out the overall budget picture for the council by describing how the budget for the court has decreased over the last few years:

2008: $4,158,000
2009: $4,264,000
2010: $4,093,000
2011: $3,860,000
2012: $3,710,000 [estimated]
2013: $3,784,000 [estimated]

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Easthope described how the court had implemented various measures to achieve those reductions. Not counting the judges and magistrate, the court now has 32 full-time equivalent (FTE) positions, down from 40 FTEs four years ago. Currie, the full-time magistrate, is now also supervisor of the court’s civil division – that move merged what had previously been two full-time jobs and assigned the responsibilities to one person, Easthope said.

The reductions have also been achieved partly through attrition, reassigning tasks and updating technology, Easthope said. The court has reduced court case management staff, who run the court day-to-day, from 14 to 11 positions. The account clerk, senior secretary and court reporters are cross-trained to handle a variety of tasks, he said. He also described how Creal’s court reporter is also the sobriety court’s coordinator – another example of merged jobs.

The last budgeting process, Easthope said, had reduced the pay of court staff. For hourly employees, that had been accomplished by reducing their work hours to 37.5 hours per week. For salaried staff, compensation was reduced by 1.5%, but they continued to work a 40-hour week. Easthope pointed out that judges’ salaries are ultimately not paid by the city – the state reimburses the salaries for judges.

After the work session, Zeisloft followed up with The Chronicle via email with confirmation of much of the data discussed at the work session, plus additional data, including numbers for judges salaries, which are set by state statute. [.pdf of the Revised Judicature Act of 1961]. The formula for setting district judge salaries is based on the salary for Supreme Court justices. Zeisloft calculated the total salary for district judges at around $138,270.

Easthope highlighted how special programs of the 15th District Court – like its street outreach program, its domestic violence program and its sobriety court – were innovative ways to meet the needs of offenders and the larger community. He mentioned that Hines’ street outreach program had recently been featured on the front page of the Detroit Free Press. [The Free Press website currently appears to be in a state of redesign that prevents successful linking to that article, but the program has received play in other media as well, including the American Bar Association Journal: "For Those Teetering on the Edge, Street Outreach Court Offers a Push in the Right Direction"]

Easthope pointed out that one FTE and and three part-time positions at the court are funded by grants. These positions are associated with the domestic violence program, including probation officer David Oblack’s position.

Besides grants and the $10 fee imposed on civil infractions, another revenue source for the court is fines. Easthope described how the implementation of the JIS system had helped with collection  of delinquent fines and fees. Despite the decline in citations over the last decade, improved collections efficiency – including the mailing of monthly statements to offenders – had offset what would have been a more significant decline in revenue. Around $700,000 per year in collections is now attributable to the collections system implemented in 2008, Easthope said. The overall rate of collection is 96-97%, which is better than most collections agencies – not that the court thinks of itself as a collections agency, Easthope added.

Probation Program

The 15th District Court’s probation program offers an alternative for sentencing besides fines or jail – oversight by a probation officer who is assigned to their case. Easthope said that if jail and fines were the only two choices, judges would have few means to deal with defendants who can’t pay (they might be stealing, and got caught, precisely because they have no money), who are mentally ill or who are addicted to drugs.

Easthope acknowledged that the probation program is not mandated by the state. For that reason, he said, it’s often thought of as an easy program to cut. But he described it as “one of the most important things we do.” During questions from the council, Stephen Kunselman (Ward 3) told Easthope he appreciated Easthope’s acknowledgment of the status of the probation program as non-mandated, and wondered if the probation program could be combined with the circuit court’s probation program. Easthope indicated skepticism about that.

Easthope described how the probation program had already reduced its costs by reducing the number of probation support staff. When he first started serving on the 15th District Court’s bench, there were three support staff for probation – now there is just one person, he said. When that person is on break, a clerk or supervisor fills in.

He went on to describe how the probation program’s projected budget for FY 2012 is $532,000. The probation oversight fee of $25/month – charged to those who are on probation – generates between $125,000 and $130,000 per year, which could be subtracted from the $532,000.

At any given time, he said, the three probation officers each have around 150 cases assigned. The annual caseload for the probation program is between 800-900 cases. By way of illustration, the kinds of cases that probation officers monitored in 2010 included: 106 alcohol offenders, 14 suspended license, 96 drunk driving offenders, 105 drug offenders, 255 fraud offenders, 118 property crime offenders, 24 public nuisance offenders, 160 violent crime offenders, and 1 weapons offender.

Among the tasks performed by probation officers are alcohol tests for people who’ve come through the sobriety court – 50 tests a day, said Easthope. [Before winning election to the district court judgeship, Easthope helped conduct volunteer alcohol tests in downtown Ann Arbor on University of Michigan home football games: "Badgers, Breath Tests, Badgers and Buses"]

The bottom line that Easthope suggested for the probation program was this: $7 million of tax money saved – 84,000 jail bed-days at $85 per bed-day.

Courts: Council Comments, Questions – Consolidation?

Tony Derezinski (Ward 2) asked Easthope if the court had yet moved to electronic filing. Derezinski felt that perhaps some cost savings could be realized there. Easthope explained that Judge Donald Shelton – chief judge of the Washtenaw County Trial Court, which includes the Circuit Court – has been working on it. A database implementation issue had slowed that down. [The trial court is funded by the county – Shelton recently briefed county commissioners about restructuring for the court that's aimed at cutting costs and improving services.]

Prompted by a query from Carsten Hohnke (Ward 5), Easthope described how a municipality can request, based on population, that the state establish a district court and the county would then fund it. But the 15th District Court for the city of Ann Arbor and the 14B District Court for Ypsilanti Township are self-funded by their respective municipalities, Easthope explained. Given the seven judges and six courthouses for district courts in Washtenaw County, he said, he felt there is room to consolidate and to make physical changes. The state law would, however, need to be amended, and each municipality with a court – Chelsea, Ypsilanti, Saline and Pittsfield Township– would need to sit down and agree to make a physical change.

Easthope then took a step back from Washtenaw County to look at the picture statewide for judgeships. In the next 10 years, he said, 200 judges will become ineligible to run – the Michigan Constitution prohibits candidates from running who are more than 70 years old. The Judicial Crossroads Task Force of the Michigan State Bar, said Easthope, has just issued a report suggesting that the number of judges statewide could be reduced. So Easthope felt there could be significant changes to the number of judges. It’s ultimately determined by the legislature.

In Washtenaw County, there’s the ability to talk about consolidating physical locations, security and transport, Easthope said. But the state needs to be involved, he said – it can’t be done unilaterally. Hohnke ventured that it might be a daunting effort at regional cooperation, but that it might result in savings down the line. Easthope said he felt like it was, in fact, daunting, but that he told people he thinks consolidation is going to happen. Instead of “hiding under the last rock,” he suggested, we might as well step up now with our ideas.

Easthope and Hohnke agreed that even if it was county taxes that wound up getting saved, city taxpayers would benefit, because they also pay county taxes.

Easthope sketched out a vision where some other district court physical facilities could be closed, and those courts could instead use new city of Ann Arbor space. The two new district court facilities in the county – 15th District Court and 14A-1, on the same campus as the newly expanded county jail – could accommodate all of the county’s district courts, Easthope suggested. That would significantly reduce transport, security and staffing costs, he said.

Bottom Line for Courts

Easthope wrapped up the work session by again expressing the sentiment that he understood the council’s situation in evaluating the budget. He described a recent email he’d sent to the council as perhaps a little “terse” – he’d been reacting to the results of a priority-setting exercise the council had completed in preparation for one of its budget retreats. The court had come in next-to-last on the priority list of 12 service areas, with a 1.8 average score on a three-point scale – a 3 being the highest. Just above the 15th District Court on the ranking was parks and recreation.

Easthope said that on reflecting about that ranking, he thought maybe it was a good result – the court was doing its job well enough that the council didn’t think about the court that much, so maybe it wasn’t all that bad to be ranked below cutting the grass.

Easthope stressed that the court understands the need for budget reduction targets, but said that it would be difficult for the court to meet those targets. [The base-line reduction target for all departments is 2.5%.] Easthope said he could not at this point say what specific areas they would identify in order to meet the target. He said he remembered how as a city councilmember he’d listen every year to people say, “It’s going to be difficult to make our target,” and then confirmed, “It’s going to be difficult to make our target.”

He said that the court is always looking to cut and to be better. With the new facility, there are a lot of changes they might be able to implement. There are a lot of changes countywide they might be able to implement in the long term, but he cautioned that it would require a conversation between the 15th District Court, the other district courts in the county, and the state.