Hall had been offered the housing commission job at the commission board’s Oct. 19, 2011 meeting. The commission oversees the city of Ann Arbor’s public housing units, as well as the Section 8 program for Washtenaw, Monroe, and western Wayne counties. Hall’s last day with the office of community & economic development is Nov. 23.

Among his various responsibilities at the county, Lenart has managed the brownfield redevelopment program, working in the office of economic development & energy. That department is one of three that are part of a merger approved by the county board of commissioners in August. The merger – which includes the office of community development, and the employment training and community services (ETCS) department – is already underway, but will officially take place at the beginning of 2012. The new office of community & economic development will be led by Mary Jo Callan, current director of the office of community development. The office will have responsibility for a broad range of initiatives, including low-income housing, redevelopment efforts, job training and other economic development programs.

OCD director Mary Jo Callan will lead the new office of community & economic development. The goal is to cut costs by eliminating duplicated services in the face of declining revenues, while finding ways to deliver those services more efficiently to citizens. The change resulted in a net loss of nine jobs. However, jobs in other departments have been found for all but one of the affected employees. Diane Heidt, the county’s human resources manager, said she’s continuing to work to find a position for that employee.

Commissioners were briefed on the restructuring at a May 5, 2011 working session, and also discussed it at a June 28 agenda briefing.

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

If the reorganization gets final approval, Mary Jo Callan, director of the office of community development, will lead the new office of community & economic development. The goal is to cut costs by eliminating duplicated services in the face of declining revenues, while finding ways to deliver those services more efficiently to citizens. Several personnel changes are part of the restructuring, which would eliminate 11 positions and create 3 jobs – for a net loss of 8 jobs. In addition, there would be 20 job reclassifications, 5 title changes and 1 position held vacant.

Commissioners were briefed on the restructuring at a May 5, 2011 working session, and also discussed it at a June 28 agenda briefing. At that briefing, county administrator Verna McDaniel told commissioners that all but one person had been given a “soft landing” within the county’s organization.

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

Washtenaw County commissioner Ronnie Peterson, right, and county administrator Verna McDaniel before the start of the chair's briefing on Tuesday, to preview agendas for the July 6 board meeting and July 7 working session. (Photo by the writer.)

Generating significant conversation was an item on the planned consolidation of three departments: The office of community development, the economic development & energy department, and the employment training and community services (ETCS) department. Commissioners wanted clarification on the status of the employee count listed out on the agenda: 11 positions eliminated, 3 jobs created, 20 reclassifications, 5 title changes and 1 position held vacant. County administrator Verna McDaniel told commissioners that while that seems like an extensive set of changes, in terms of people, all but one person had been given a “soft landing” within the county’s organization.

Another item that generated interest among commissioners was the second phase of the trial court consolidation project. Phase two will renovate the first floor of the downtown Ann Arbor courthouse to consolidate some trial court operations, as part of a restructuring that included moving the juvenile court from its Platt Road location earlier this year to the courthouse at Main & Huron. The consolidation was made possible in part due to the relocation of the 15th District Court from the downtown courthouse to the city of Ann Arbor’s new municipal center at Fifth & Huron. Commissioner conversation centered around the purview of the board’s space committee (consisting of Rolland Sizemore Jr. and Rob Turner) in connection with the future of the Platt Road building.

The board’s July 7 working session agenda led to an extended conversation about prioritization of the three items listed: (1) the split of the Washtenaw Community Health Organization (WCHO) from Washtenaw County; (2) the Western Washtenaw Recycling Authority; and (3) the Ann Arbor Skatepark. Chair of the working session, Yousef Rabhi, did not attend Tuesday’s briefing, but with the consent of the working session’s vice chair, Rob Turner, the order to the agenda items was revised to put the WCHO item last. The rationale was to allow an open-ended time for adequate discussion – commissioner Ronnie Peterson figured he might need at least an hour for discussion on that item alone.

The presentation that commissioners will hear on the skatepark is likely to be similar to the one presented by Friends of the Skatepark at the Ann Arbor city council’s June 20 meeting.

Tuesday’s “chair’s briefing” was in a format similar to administrative briefings used in the past to preview upcoming adendas. Those administrative briefings were abandoned due to concerns expressed by some commissioners about accessibility. The June 28 briefing was conducted in the county boardroom and was video-recorded. It was the second in a series of three such briefings scheduled for the summer – the next one takes place on July 26, starting at 4 p.m., to prep for the Aug. 3 board meeting.

Departmental Consolidation

On the agenda for July 6 is a resolution to consolidate three departments: (1) the office of community development; (2) economic development and energy; and (3) employment training and community services (ETCS). The board had previously received a presentation about the plan at a May 5, 2011 working session. Combined, the three departments employ nearly 60 people with a combined budget of about $16 million. The $16 million reflects a decrease, due to federal funding cuts, from around $29 million. At their May 5 working session, commissioners had been told that staff cuts will likely result from the changes – those and other details were still being worked out.

As they’re currently configured, here’s what the three departments look like:

• Economic development & energy: Four employees, led by Tony VanDerworp. Programs focus on energy efficiency and renewable energy investments, historic preservation, brownfield redevelopment, community engagement and planning, and economic development – including support for the Eastern Leaders Group, the Detroit Region Aerotropolis, and other efforts aimed at job growth.
• Office of community development: Twelve employees, led by Mary Jo Callan. OCD, which is funded by both the county and city of Ann Arbor, handles a range of programs, including energy efficiency improvements for residential housing, affordable housing development and rehab, improvements to public facilities and infrastructure, neighborhood revitalization, and community engagement and planning – particularly focused on human services. OCD is managing the coordinated funding of local human services nonprofits by the county, the city of Ann Arbor, the Urban County, Washtenaw United Way and the Ann Arbor Area Community Foundation – a process that was discussed at length at the board’s May 4 meeting. The Barrier Busters program is also managed by OCD.
• Employment training & community services (ETCS): Forty employees, led by Patricia Denig. [Long-time ETCS director Trenda Rusher retired at the end of 2009.] ETCS also offers residential energy efficiency programs, including help with weatherization, and contracts with other agencies to provide human services support, primarily related to food and nutrition. They’re involved in crisis intervention services, like Barrier Busters, and provide services to job seekers and employers.

Mary Jo Callan, OCD director, will lead the new department.

At the briefing on Tuesday, county administrator Verna McDaniel offered some clarification about the “bottom line on staffing” that is reflected in the resolution: 11 jobs eliminated, 3 jobs created, 20 reclassifications, 5 title changes and 1 position held vacant. McDaniel cautioned that those numbers could be deceiving. Based on her conversations with Diane Heidt, Washtenaw County’s human resources and labor relations director, everyone in the three departments had a place except for one, and that person has the ability to “bump” – a union term referring to reassignment based on seniority.

Wes Prater asked for confirmation, which he received from McDaniel, that when the board receives the budget, it would be presented as required by the Uniform Budgeting and Accounting Act, with budgets for the past year, the current year, next year.

Rolland Sizemore Jr. confirmed with McDaniel that the reorganization results in eliminating a net of eight jobs and creating five positions through title changes. Sizemore also wanted to know who was in the position labeled “human services division director” and why there’s a salary range of $73,846-$116,758 listed. McDaniel explained that it’s Trenda Rusher’s old position, which has been changed because it’s no longer needed – a position lower than a director position has been created instead. [Rusher was the long-time ETCS director before retiring at the end of 2009.] The salary is listed in a position to be eliminated, not added, she said.

Prater said it’s a good thing to reduce costs, and it appears the county would be doing that with this move. He got confirmation from McDaniel that all eight positions to be eliminated would be coming from jobs in the departments to be consolidated.

Trial Court Consolidation: Space Committee

On the July 6 agenda is a resolution that would authorize up to $1 million for the next phase of consolidation of services at the downtown courthouse facility, where the juvenile court is now located. Phase two entails renovation of the first floor of the courthouse. Commissioners had previously received a detailed briefing on this project from Donald Shelton, chief judge of the Washtenew County trial court, at their Jan. 19, 2011 board meeting.

Rolland Sizemore Jr., who’s a member of the board’s space committee (along with Rob Turner), noted that the board needs to look at the property on Platt Road where the juvenile court was previously located. The county needs to decide whether it wants to keep the property or not. He said he didn’t think that renovating the building was an option – the facility was beyond renovating.

Barbara Bergman offered that whatever the board decides to do, it’s important to put it back onto the tax rolls.

Ronnie Peterson questioned whether the space committee had purview to decide the future use of the Platt Road property, asking whether that decision would rest with the board or with the space committee.

Conan Smith, who chaired the briefing, told Peterson that he was hopeful that Sizemore and Turner would work together on that issue, and it would come back before the board. Peterson noted that he’d previously served on the space committee, and determining alternative uses of property was not, he felt, within the scope of the space committee’s work. He wanted some deliberation on the question by the full board of commissioners.

Sizemore assured Peterson that the space committee looks at all buildings and property, but that anything that actually happens to the county’s facilities comes back to the board for its approval. Sizemore said it’s time to look at all of the county’s buildings. He noted that the western service center on North Zeeb Road is partly empty. It’s a question as to whether some staff might relocate out to that facility. But he concluded by assuring Peterson that it would not be the case that the committee would come back to the board with: “Here’s a decision and here it is!”

On the topic of moving the juvenile court to the downtown courthouse, Turner said someone had needed to give it a push to get things going. The building on Platt Road is in such bad shape, he said, it would cost more to repair than to tear it down. He wanted to make sure that the renovation of the first and third floor of the downtown courthouse was brought before the board for its approval. The next phase for the Platt Road building would be oversight of the existing building – he ventured that it probably needs abatement of some materials. Beyond that point, it’s beyond the scope of the space committee, Turner concluded.

Peterson confirmed that the outline sketched by Turner was consistent with what Peterson understood the scope of the space committee to be.

Barbara Bergman said that as the discussion of the future use of the Platt Road property progresses and the board gets to a point where there is a committee that would have such scope, she’d be interested in seeing a list of pros and cons for its use.

Working Session Priorities: WCHO Split

On the working session agenda for July 7 are three items: (1) the split of the Washtenaw Community Health Organization from Washtenaw County; (2) the Western Washtenaw Recycling Authority; and (3) the Ann Arbor Skatepark.

The presentation that commissioners will hear on the skatepark is likely to be similar to the one presented by Friends of the Skatepark at the Ann Arbor city council’s June 20 meeting.

The Washtenaw Community Health Organization (WCHO) is a partnership between Washtenaw County and the University of Michigan Health System. Each institution appoints six members to the board. The partnership focuses on providing services to children and adults with mental or emotional health disorders, substance abuse problems or developmental disabilities.

Bylaws for the WCHO were changed recently by approval of the UM board of regents (at its April 21 meeting) and by the Washtenaw County board of commissioners (at its March 2 meeting). The changes included: (1) removing language for the UMHS to provide money for physical health services; (2) providing for the executive committee to act on behalf of the board and for actions to be reported to the full board at its next meeting; and (3) removing Washtenaw County as the fiscal agent for the WCHO.

It’s this last change on which the board is scheduled to receive a July 7 working session presentation from WCHO executive director Patrick Barrie.

Yousef Rabhi, who chairs the working sessions and sets those agendas, did not attend Tuesday’s briefing; however, vice chair of the working session Rob Turner did attend.

Ronnie Peterson noted that the board was sensitive to time constraints, but he thought the conversation on the WCHO would be a helpful discussion. He wondered how long the presentation on the WCHO would be. Having three items meant that it’s a “stacked agenda,” he said. Peterson cautioned that the WCHO item would need at least an hour of discussion. He also wanted to make sure that there would be background documentation provided in advance of the working session so that board members could follow Barrie’s presentation.

Barbara Bergman, who serves on the WCHO board, assured Peterson that the 48197 and 48198 zipcodes “are districts of importance to all of us, including you and to the WCHO.” [Those zipcodes are in the Ypsilanti area, which Peterson's board district covers.] Regardless of the outcome of the split, she said, it will not affect the fact that the county has under-served those two zipcodes. She said as a WCHO board member, she wanted to allay Peterson’s fears – those two zipcodes are primary in the WCHO’s thinking, she said.

Leah Gunn then suggested that the other two items on the working session agenda be heard first, before the WCHO item. She said she’d never heard that there’s a limit on the amount of time board members can use for their meetings – they could stay until 10 p.m. if they want to dig deeply into the WCHO issue, she said.

Wes Prater said he thought that currently UM and Washtenaw County each appointed six members to the WCHO board. He wondered what was meant to be achieved through the split. Conan Smith cautioned that the purpose of that day’s briefing was not to deliberate. Bergman summarized for Prater that the CSTS and WCHO want to serve the county with the best services possible. [CSTS is the county's Community Support & Treatment Services department, which is merging with WCHO.]

Sizemore ventured that everybody seemed to think the WCHO split was a “hot item,” but he felt that the recycling authority is also a hot item. The board could be there until 11:30 p.m., he ventured.

Peterson responded to Sizemore, saying that he had no problem staying as long as was needed. But he had wanted to be respectful of Rabhi’s expressed wishes to limit working session meetings to two hours.

Gunn reiterated her suggestion that the skatepark and the recycling items be placed first on the agenda, to leave the time for the WCHO item open-ended.

Conan Smith noted that it’s the chair’s agenda to set. Vice chair of the working session, Rob Turner, agreed to the agenda order change.

The recycling item was dealt a glancing mention, when West Prater asked whether the recycling authority would have the ability to place a millage on the ballot. County administrator Verna McDaniel told him no – it would require the $3.2 million of the county’s full faith and credit, which would be backed by assessing the participating communities.

Peterson returned to his point that when items are scheduled for a working session, he wanted commissioners to have some background material provided to them. He also wanted one or two pages of material explaining why the item was being scheduled for the working session. C. Smith responded by saying that the agendas are set by the working session chair. Peterson then pointed out that the working session chair is new, and it’s a new board – the board should not go into a working session blindly. [Rabhi was elected to the board in November 2010, and took office in January 2011. It's his first term on the board.]

In response to Peterson, Gunn reminded him that Rabhi had been elected to the leadership position of working session chair, and setting the agenda is one of the things a chair does. The board should be respectful of the chair’s decisions. She also noted that the board is always provided with background material. Gunn indicated that the board should follow the decisions of its elected leaders.

Peterson responded by saying that he was not a “follow-the-leader kind of guy.”

The board concluded with an apparent consensus that there would be adequate information provided to commissioners about the content of the working session on July 7, in advance of that session.

Before adjourning its briefing, the board went into a closed session to discuss pending litigation.

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The report highlights six “return on investment” categories: (1) stabilizing the workforce and community by providing services like childcare, food and affordable housing; (2) leveraging millions of dollars in additional funding; (3) providing jobs – if combined, human services nonprofits funded by the city and county would employ over 855 people, representing the county’s fifth-largest employer, according to the report; (4) supporting for-profit businesses directly through the purchase of goods and services, and indirectly from spending by employees; (5) tallying 365,000 hours of volunteer time in 2011, or the equivalent of $7.8 million in wages; and (6) enhancing the social safety-net services of local government.

This is the second report on the economic impact of local nonprofits – the first one was released in 2009. It’s delivered in the context of budget approvals being sought this week from both the Ann Arbor city council and the Washtenaw County board of commissioners, for funding through 2013. [See Chronicle coverage: "Nonprofits lobby for human services support" and "Budget issues – human services, fire protection – loom"]

From left: Washtenaw County commissioners Conan Smith and Barbara Bergman, and Mary Jo Callan, director of the county/city of Ann Arbor office of community development, at the May 5, 2011 working session of the county board of commissioners. (Photos by the writer.)

County commissioners were given an update on these plans at their most recent working session. They’ll be asked to give initial approval to the consolidation at their June 1 meeting, with final approval on July 6.

Mary Jo Callan, who is expected to lead the new office of community & economic development, made the presentation and fielded most of the questions from commissioners. She is currently director of the office of community development, a joint department of the county and city of Ann Arbor, and one of the three departments slated to merge. The goal, Callan said, is to provide a more coherent approach to the broad spectrum of community development, from providing for basic needs to helping people get jobs. And in a climate of reduced resources, they’ll be eliminating duplication and cutting costs, she said, while making it easier for residents to get the services they need.

The three departments – the office of community development (OCD), ETCS (the employment training and community services department) and the economic development & energy department – employ nearly 60 people with a combined budget of about $16 million. Staff cuts will likely result from the changes – those and other details are still being worked out.

Most commissioners expressed support for this effort, though some wanted more information – including a business plan for the new department – before their June 1 vote.

The working session also included a presentation and discussion on the Packard Square brownfield redevelopment, an issue that was initially debated at the board’s May 4 meeting. A Chronicle report on that part of the working session will be published separately.

Consolidation of Departments

For about a year, county administration and staff have been looking at the possible merger of the office of community development (OCD), ETCS (the employment training and community services department) and the economic development & energy department. Planning for the change is near completion.

County administrator Verna McDaniel set the stage for commissioners, telling them that this was part of a broader effort to look for ways to create efficiencies in the county organization. The county needs to address the reality of decreased state and federal funding, to focus on the programs and services that the county does best, to leverage partnerships with other organizations, to find structural savings, and to mitigate duplication of work, she said.

McDaniel said she’d instructed the department managers to check their egos at the door and figure out what’s best for their customers – the residents of Washtenaw County. This was the context for challenging these three departments to come together, she said.

Mary Jo Callan, OCD director, gave an overview of the proposed changes – it’s anticipated that she will lead the new department. She said that she and the other department directors – Patricia Denig of ETCS and Tony VanDerworp of economic development & energy – have been meeting for about a year. They’ve taken McDaniel’s charge seriously, Callan said, and have worked in honesty “and sometimes in pain, frankly.” In all their conversations, she said, a focus on providing services to residents has come first.

All the departments face challenges. They’ve recently learned that the departments in total are on the verge of losing another $1 million in federal funding, Callan said. Not long ago, the three groups had revenues totaling about $29 million – now, it’s closer to $16 million. [All three departments receive significant funding from state and federal grants that they administer.] Declining revenues have forced them to look at structural issues, including staffing and external costs. The solution they’re proposing, Callan said, aims to reduce duplication and improve services.

Callan then gave an overview of each current department:

• Economic development & energy: Four employees, led by Tony VanDerworp. Programs focus on energy efficiency and renewable energy investments, historic preservation, brownfield redevelopment, community engagement and planning, and economic development – including support for the Eastern Leaders Group, the Detroit Region Aerotropolis, and other efforts aimed at job growth.
• Office of community development: Twelve employees, led by Mary Jo Callan. OCD, which is funded by both the county and city of Ann Arbor, handles a range of programs, including energy efficiency improvements for residential housing, affordable housing development and rehab, improvements to public facilities and infrastructure, neighborhood revitalization, and community engagement and planning – particularly focused on human services. OCD is managing the coordinated funding of local human services nonprofits by the county, the city of Ann Arbor, the Urban County, Washtenaw United Way and the Ann Arbor Area Community Foundation – a process that was discussed at length at the board’s May 4 meeting. The Barrier Busters program is also managed by OCD.
• Employment training & community services (ETCS): Forty employees, led by Patricia Denig. [Long-time ETCS director Trenda Rusher retired at the end of 2009.] ETCS also offers residential energy efficiency programs, including help with weatherization, and contracts with other agencies to provide human services support, primarily related to food and nutrition. They’re involved in crisis intervention services, like Barrier Busters, and provide services to job seekers and employers.

Callan said there are several areas of overlap, and that the departments have reached out and worked together in the past. But the reality is that they operate in silos, she said. By coming together into one operation, they’re acknowledging that quality of life isn’t just about jobs, or neighborhoods, or housing – it’s about all of those things, and more. She noted that health rankings were recently released, and many of the health outcomes relate directly to social and economic conditions. A unified organization could take a more coherent, broad-based approach to developing community, she said.

Consolidation of Departments: What’s the Plan?

The proposal is to create a new office of community & economic development, Callan told commissioners. It would have four units: (1) housing & community infrastructure, with a budget of $4.3 million; (2) economic & workforce development, with a $6.6 million budget; (3) human services, with a $5.2 million budget; and (4) finance and operational support.

Structure of the proposed county office of community & economic development.

Although they’ll organize around teams in these four areas, Callan said there will be lots of “cross-fertilization” as well, with people working across units. Callan described the primary responsibilities of each unit:

• Housing & community infrastructure:  This unit will bring together the weatherization and energy efficiency programs from all three departments, as well as all efforts to provide decent, affordable housing to local residents. This group would also work to support public infrastructure projects aimed at low-income residents.
• Economic & workforce development: The work of this unit will focus on developing a pipeline of workers for jobs in fast-growing sectors of the economy, Callan said – they’ll tie their workforce development to business needs, so that people will get trained for jobs that actually exist. This group would continue with other economic development work already being done by the county, including heritage tourism, brownfield redevelopment, and support for projects like the aerotropolis and development near Willow Run Airport.
• Human services: This unit will combine the community services parts of ETCS and the office of community development. They’ll focus on partnering with local nonprofits to provide safety net services to residents. The unit will also coordinate emergency financial assistance and services for seniors.
• Finance and operational support: Now, each department handles finance and operations in different ways, Callan said. OCD does theirs all in-house, for example, while ETCS uses an external contractor for most of those services. Callan said that keeping finance and operational support within the department creates greater accountability, ensuring that their investments are being managed properly. Among the three departments there are 37 funding streams, she noted. They need to braid those sources so that residents don’t have to navigate the bureaucracy, and so that the funding can be coordinated for maximum benefit. It’s even more vital to do this at a time when resources are scarce, she said.

This approach provides specific ways to enhance services, Callan said. They’ll be streamlining services to the county’s most vulnerable residents – things like eviction prevention, housing improvements and help for the unemployed. When residents are in crisis, they’re on a sinking lifeboat, she said – they shouldn’t have to reach for more than one ladder to help them out. Instead of calling two departments, residents will be able to make one phone call and get twice as much help in a timely way, she said.

Taking a pipeline approach to workforce development will be a huge benefit, Callan said. ETCS has done a great job of focusing on the worker side, but that needs to mesh better with business demands. It’s fine to help someone get certified as a heating and cooling technician, but if there are no jobs in that sector, they’re not achieving their goal. Coordinating worker training with potential employers will help both ends of the pipeline. “It’s pretty simple,” she said.

Finally, combining the different weatherization programs with housing rehab support will help improve access and service to low-income residents who are most in need, Callan said. She related the story of an elderly man on a fixed income, who was cited by a building inspector because his porch was falling down. He had to deal with paperwork for both ETCS and OCD to get assistance. “This is an area where we have to come together and do this in a more coordinated and coherent way,” she said.

The departments hope to begin the first phase of this consolidation in July 2011, after receiving final board approval. This phase would include creating a single housing improvement program, and begin transitioning the financial and operational support activities to an internal unit. In the fourth quarter of 2011, they’d begin bringing the human services team together.

The last phase of consolidation would happen in the first quarter of 2012, to merge the workforce and economic development programs.

This transition entails a lot of change, “and that’s not an easy thing,” Callan said. Barriers include changing the traditional ways that departments have operated, and functioning in a context of constantly shifting circumstances – she pointed to the recent $1 million in funding reductions as an example. Another challenge is to ensure that as they restructure, they’re still complying with state and federal funding requirements, which are often complex.

It’s one thing to create a concept and vision for this change, “but implementation is really harder,” Callan said. It’s understood that staff, advisory groups and key stakeholders like Ann Arbor SPARK need to be fully engaged in the process, she said. It also needs to be determined whether the county is the right entity to offer the services it currently provides. If it’s not, Callan said, then the county needs to ensure that handing off those services to another group doesn’t diminish what residents receive.

Kelly Belknap, the county’s interim deputy administrator, made some concluding comments in the presentation. She noted that McDaniel had challenged the three departments to cut $500,000 from their combined general fund budget in 2012 and 2013. “They are on track to meet this,” she said.

Next steps include meeting with labor leadership that represent employees in these departments – that’s happening this week (the week of May 9). General staff meetings for the departments will take place from May 25-31 to discuss these changes.

The board will be asked to give initial approval to the plan at its June 1 meeting, with a final vote to approve the consolidation on July 6.

Consolidation of Departments: Commissioner Comments, Questions

Commissioners raised a variety of questions over more than an hour of discussion. Conan Smith began by noting that the $500,000 in budget cuts was nice, but it’s more important that they’re taking a strategic, intellectual approach to attacking root causes of problems in the community. He asked Callan to comment on how these changes will improve the quality of life for residents at the neighborhood level.

Community is first and foremost about family, neighborhoods and schools, Callan said. And every community needs the same ingredients to be successful: safety, jobs and a good education. The needs of a community might differ, but the ingredients are the same. By bringing together these three departments, she said, they’re poised to look at community issues in ways that weren’t previously possible. Each department has handled different pieces in the past, but never took a systemic approach.

McDaniel gave the example of Parkview Apartments, a troubled 144-unit complex in Ypsilanti that was foreclosed on by the U.S. Dept. of Housing & Urban Development (HUD) and acquired by the Ypsilanti Housing Commission. All three county departments were involved in making that a viable community, she said – when resources are coordinated, you can do a lot more.

Smith asked how the process for making grants to local nonprofits would be handled. Currently, that’s done through both OCD and ETCS. Callan said that both departments fund many of the same nonprofits. By consolidating, they’ll be on the same page in terms of expectations, outcomes and accountability. A nonprofit won’t have to deal with two application and monitoring processes, she said. At a minimum, it will amplify the county’s investments. More importantly, she added, they’ll be taking a more coherent approach to making those investments, and tapping the combined experience and expertise of all their staff.

Smith said he’s excited about integrating community development and economic development. They’ll be attacking poverty from two angles: through jobs that put wages into a household, and by reducing the cost of living – with weatherization and other housing services – without reducing the quality of life. How housing and jobs are linked becomes really important in terms of building a sustainable community, he said – and transit plays a role in that as well. Government is the only place where that kind of broad-based thinking occurs, Smith said – only governments take responsibility for community design.

In that regard, one of the challenges is that the county doesn’t do land use planning or zoning, Smith added. The county needs to partner aggressively with local units of government that do that work, he said. Along those same lines, Smith wondered how this new department envisions partnering with other internal units – bike paths in the community, for example, are being built by county parks & recreation.

VanDerworp replied that mobility is an important aspect of community health – and transit is on a checklist for developing healthy neighborhoods. Under this new organization, they’ll be thinking in broader ways, he said, and building that perspective into their assessment of needs and delivery of services.

Smith then pointed to the opportunities created by consolidating renewable energy and energy efficiency services, which have been handled in different ways by all three departments. Washtenaw County can be the center for a new driver of the economy, he said – they have the academic expertise at the University of Michigan, the will of the people to make investments, and the capacity in terms of the workforce and manufacturing facilities. It’s a huge opportunity, he said.

Barbara Bergman expressed some frustration at the level of collaboration among community partners, in areas ranging from food delivery to mental health services. This community talks a lot about collaborating, she said, but doesn’t always pull it off. The fact that the three departments are consolidating is nothing short of a miracle, Bergman said – to expand that effort into the community will be about as easy as shoveling fog. She asked whether substance abuse services are currently coordinated with workforce development services.

Patricia Denig, interim director of the county's employment training & community services (ETCS) department.

Denig said they do reach out to each other, but not in a coordinated, holistic way. She agreed that collaboration is difficult. Bergman urged staff to create some kind of way to coordinate substance abuse services with workforce development.

Wes Prater described the consolidation as impressive, and asked if they’ve developed a business plan for the new unit. McDaniel said that all departments will have a business plan – they’re developing a new budget structure, and departmental business plans are part of that.

Prater clarified that the $500,000 in budget reductions for the consolidated department will occur in 2012. That’s a long way off, he noted. Personnel costs are a big part of the budget, he said – what’s the consolidation’s impact on those costs?

McDaniel said they’re still working on that, and will be bringing that information to the board in June.

Prater expressed interest in seeing the department’s business plan before they vote – the board needs to be comfortable with it, he said. The new department will be handling a substantial budget, he added, and it will need some scrutiny to ensure it’s achieving the projected outcomes. “You’ve done a good job, but I think we’ve got a long ways to go,” he said.

Kristin Judge called the consolidation a phenomenal idea. By the June meeting, she hoped the department heads could provide information about how current operations will fit into the new structure – including the two advisory boards that work with ETCS: the community action board (CAB), and the workforce development board (WDB). [A few members of these boards attended the working session, including Myles Romero, Howard Edelson, and Mary Kerr, president of the Ann Arbor Convention & Visitors Bureau. Judge also serves on the CAB.] Those boards will remain in place, Denig said. Their existence is required in order for the county to receive certain federal funding.

Judge asked how many people would work in the finance and operations unit. Callan said that’s still being figuring that out. Judge also asked whether the department’s eviction services are coordinated with the work of the county treasurer’s office. Callan replied that her department focuses more on rental evictions, while the treasurer’s programs relate to foreclosure prevention.

Judge wondered if the staff had ever considered having just one intake process for all county services. It’s not just weatherization or housing rehab that could benefit from that consolidation, she said – the same pool of residents typically tap a much wider range of services from the county.

McDaniel said the concept has come to fruition for the county health department, and they can certainly study it for other areas. She said she wanted to get the consolidation of these three departments on solid ground, but it’s just the beginning of what they can do throughout the organization. Judge encouraged the administration and staff to think on an even bigger scale.

Ronnie Peterson gave extensive comments, stressing the importance of human services and economic development – those services are joined at the hips, he said. You can’t end homelessness or poverty until you address employment.

Peterson touched on the history of these three departments. Some of them had drifted away from what they were originally created to do, he said. They were birthed for a reason, and he wanted to make sure they kept true to that after the consolidation. And if any of the programs have lived out their existence, the board needs to talk about that, he said.

Peterson noted that the reason that Barrier Busters exists is because the system isn’t working. Over the years they’ve spent millions of dollars trying to fix the system, he said – this is the third or fourth reorganization of county departments he’s seen since he’s been on the board.

He noted that the need for services is rising. Many people who recently held decent jobs are now out of work and for the first time are relying on the government for support. Peterson said he’s never seen a situation like this on such a long-term basis.

Peterson agreed with Prater that the board should see a business plan before they approve the consolidation. He noted that the role of citizen advisory groups is important. He also wanted to see an organizational chart showing staff assignments, and details about where funding cuts will be made. He asked for more details about how these changes will enrich services to residents. He argued that collaboration among departments should be a mandate for the entire county operation.

Peterson concluded by saying he had two more pages of questions and comments, because these three departments provided front-line services to his district and he wanted to be clear about how those services would be affected. But Judge had asked him to “go light,” he said, so he was cutting his questions short.

Rob Turner said that before he was elected, he didn’t know much about county government. He said he now understands the importance of services provided by the county, especially those provided by these three departments. Although District 1, which he represents, is often considered affluent, Turner said he’s sent several residents to get assistance from these departments. [District 1 covers the northwest portion of the county, including Dexter and Chelsea.] These are people who have been self-reliant, but who lost their jobs and are in terrible need. Those residents sometimes hit dead ends when they tried to get help from the county, he said, so he’s glad there will be a more coordinated approach in place soon.

Turner said economic development is important, and local employers are a pivotal part of that. He appreciated that this new department would look at the whole spectrum, from providing help for basic needs to getting residents back in the workforce and becoming self-reliant again. Turner also advocated for a common database for different county services – otherwise, people seeking services can fall through the cracks.

Conan Smith weighed in again, saying he wanted to give some pushback on a couple of points. He agreed with other commissioners who said that economic development is important, but he noted that the board hasn’t funded that work. They’ve changed the name and mission of that department several times, he said, and have fragmented the staff. They can either give economic development a home in this new department, Smith said, or make a commitment to funding economic development as its own, stable department.

Secondly, Smith said, he wasn’t sure a business plan could be completed by the time the board takes its initial vote on consolidation in June. Right now, they’re looking at structural changes, not programmatic ones. He cautioned against asking staff to develop a detailed business plan before the board agrees to approve the restructuring, saying it could be a potential waste of time. He didn’t think they should get into the weeds of how a new department will function until they’ve actually agreed to form the department.

Peterson responded by saying the board can take as much time as it needs to do its work. He observed that $16 million isn’t chump change, and wondered what bank would make that kind of loan without seeing a business plan. The services provided by these three departments affect certain districts more than others, he said – Districts 6, 5 and 2 are most affected. [Those districts, represented by Peterson, Rolland Sizemore Jr. and Dan Smith, respectively, are on the east side of the county, including Ypsilanti and Ypsilanti Township.]

Ann Arbor hasn’t felt the brunt of the economic downturn, Peterson said – the city is coming back strong. That’s good, because it will benefit the rest of the county. But other parts aren’t faring as well, he noted. It’s important that the county’s economic development role isn’t buried, Peterson added. He said he’s not arguing for a huge staff, but they need to be able to talk the language of the business community. He asked that a working session be scheduled for this issue.

Prater reiterated that a business plan is critical. It needed to include performance measures, but it didn’t have to be complicated. McDaniel said the staff could put one together.

Conan Smith said he didn’t disagree about the importance of economic development. But he wants to see the board’s commitment to that, not a haphazard approach. He agreed that Ann Arbor has been fortunate to not suffer as badly from the economic decline. [Smith, who represents District 10, is one of four Ann Arbor commissioners.] He credited the University of Michigan as an anchor, and the leadership of civic officials. It was also good that many people making decisions in Lansing have their roots in Ann Arbor. [Gov. Rick Snyder lives in the Ann Arbor area, as does Mike Finney, head of the Michigan Economic Development Corp. and former CEO of Ann Arbor SPARK.]

One of the things that makes this county strong is that people care about others, he said, no matter where they live. As an example, he cited the investment that the Ann Arbor Downtown Development Authority is making in public transit service to Ypsilanti. Smith noted that the organization he leads – the Michigan Suburbs Alliance, based in Ferndale – opened an office in downtown Ypsilanti. His sister also lives in the city – he’s seen the foreclosed homes on her street.

If the county board has the will to invest in substantial economic development over the long term, Smith said, they can do a lot of good. They can do an equal amount of harm by investing haphazardly.

Bergman agreed that economic development is important, but said she doesn’t think it’s being subsumed in this new department. She also noted that while Ann Arbor is a terrific place to live, there are certainly residents who need the county’s assistance. There are widows, for example, who live in large houses they can’t sell and who have to choose between buying food or medication. “Ann Arbor is not just a mansion city,” she said.

Yousef Rabhi concluded this part of the session by saying he was impressed with the consolidation plan. Like the IT collaboration that the board approved at its May 4 meeting, this is another step, he said.

Brownfields and Packard Square

The May 5 working session also included a discussion of the Packard Square project in Ann Arbor. At its meeting the previous night, the board was asked to give initial approval of a $1 million grant application and $1 million loan from the Michigan Dept. of Natural Resources and Environment, for brownfield cleanup at the site. Commissioners were also asked to authorize designation of the county’s full faith and credit as a guarantee to any loan that might be awarded, up to $1 million.

Some commissioners raised concerns at their May 4 meeting about the brownfield proposal and requested that the agenda item first be addressed at a working session. It was added to the May 5 agenda – that item will be reported in a separate Chronicle article.

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

Absent: Leah Gunn, Rolland Sizemore Jr.

A van for Avalon Housing, parked at the nonprofit's headquarters in the Northern Brewery building on Jones Drive. Avalon recently received a $250,000 federal "green" grant for its Near North affordable housing development on North Main.

In addition to the grant for Near North – a proposed 39-unit affordable housing development on Main Street just north of downtown – the Urban County also received nearly $180,000 more than anticipated in federal funding through the Community Development Block Grant program for the coming fiscal year.

The board voted to divvy up those additional funds to projects in the Urban County’s three largest jurisdictions – Ann Arbor, Ypsilanti and Ypsilanti Township. They also approved setting aside nearly $27,000 for as-yet-unspecified human services support, in light of possible cuts in city of Ann Arbor funding to local nonprofits.

The focus on allocations at Tuesday’s meeting prompted this comment from Ypsilanti mayor Paul Schreiber: “It’s a pleasure to sit on a board that has money to spend!”

Revising the Urban County Annual Plan

The Urban County is a consortium of Washtenaw County, Ann Arbor, Ypsilanti and 9 townships, responsible for allocating federal funding for low-income housing and other community development projects. The funds are managed by staff of the joint county/city of Ann Arbor office of community development. [For background on the Urban County, see Chronicle coverage: "Urban County Allocates Housing Funds"]

Damon Thompson, OCD’s operations manager, began Tuesday’s meeting by noting that May 3 would be the final public hearing for the Urban County’s annual plan. The hearing will be held during the Ann Arbor city council meeting.

Leah Gunn, a Washtenaw County commissioner who chairs the Urban County board, reported that the county board had held a public hearing on the annual plan at its April 21 meeting. No one spoke at the hearing, she said. When asked by a fellow board member whether that was a surprise, Gunn replied, “No, it’s not.”

Thompson said that the deadline for public comments on the plan is May 10. The plan – for the fiscal year beginning July 1, 2010 – must be submitted to the U.S. Dept. of Housing and Urban Development (HUD), in order to secure federal funding. [.pdf of annual plan draft]

At its March 23 meeting, the Urban County board had approved proposed projects included in the plan and funded by the federal HOME Investment Partnerships and the Community Development Block Grant (CDBG) programs. At the time, they weren’t yet sure how much CDBG funding they would receive, and based the plan on an anticipated $2.22 million.

On Tuesday, staff informed the board that the actual CDBG funding for fiscal 2010 is $2.4 million. [The HOME funding allocation remained as expected, at $1.665 million.]

Much of the meeting was spent sorting through exactly how the extra CDBG dollars would be allocated. Board members found the staff report confusing, and Leah Gunn asked whether they could table it until next month, when staff would have a chance to clarify the proposed changes. Thompson said that wasn’t possible – he needed to submit the allocations as part of the annual plan for HUD, which was due before the board’s next meeting. So they thrashed through the numbers – and concluded that it was the presentation that was confusing, not a mistake in calculations. Apologizing, OCD director Mary Jo Callan at one point declared, “I’m on the verge of a stroke.”

Ultimately, the allocation changes were approved unanimously, and included:

• $26,978 for human services, with specific projects to be determined. Callan noted that the proposed city of Ann Arbor budget calls for a $260,000 cut to human services funding – it’s up to city council to determine the final amount, she said, but there will almost surely be cuts of some kind. The $26,978 won’t cover the cuts, she added, but it will help.
• An additional $20,000 to Ypsilanti Township for road improvement projects, bringing the total for that line item to $205,000.
• An additional $25,000 to Pittsfield Township for sidewalk repair, for a total of $125,000.
• $20,000 to the city of Ypsilanti, for projects to be determined.
• An additional $51,906 to Ann Arbor for public facilities projects, for a total of $101,905.
• Administrative costs account for 20% of the total amount awarded, or $480,019 – an increase of $35,971.

[.pdf file of final CDBG allocation for FY10]

During the discussion, Paul Schreiber reminded his fellow board members that they are a policy-making body, and that staff are responsible for managing the funds. If staff needs to make changes, he said, the board can vote to amend the plan at a later date.

Other Changes to Funding Allocations: Near North

At their March 23, 2010 meeting, the Urban County board had approved $500,000 in funding for the Near North affordable housing project, to be built on North Main between Kingsley and Summit. The original amount came from three funding sources: $315,536 from the federal HOME program; $154,464 from Ann Arbor’s sewer funds; and $30,000 from Neighborhood Stabilization Program (NSP) awarded to Ann Arbor.

Then earlier this month, the office of community development learned that a grant it had applied for two years ago on behalf of Avalon’s Near North project had been awarded, Callan said. The $250,000 is a HUD community housing development organization (CHDO) grant aimed at increasing the supply of energy efficient and environmentally-friendly housing.

Near North qualifies because it will be built to LEED standards, Callan said.

The original $500,000 funding level for Near North will remain unchanged, but the new grant allowed the board to shift $250,000 previously earmarked for Near North to other projects. A large chunk was allocated for rehab and refinancing of existing properties owned by Avalon, with other funding going to Community Housing Alternatives and Habitat for Humanity Huron Valley.

The funding sources for Near North are now: $250,000 from HUD’s “green” grant; $96,389 from the federal HOME program, and $153,611 from Ann Arbor’s sewer funds.

In addition to the Near North funding, at its March meeting the Urban County board had also granted Avalon a total of $695,467 in funds for the rehabilitation and refinancing of existing properties owned by the nonprofit . Sources for that were $617,404 from the federal HOME program; and $78,063 from the federal Community Development Block Grant (CDBG) funds.

Avalon had originally requested $814,800 for rehab and refinancing of existing properties. With funds freed up because of the “green” grant, staff of the office of community development recommended that Avalon now be funded to the full amount of its request. At its April 27 meeting, the board agreed – funding from the federal HOME program was raised to $736,737, with the $78,063 from CDBG funds unchanged.

In addition, funding for Community Housing Alternatives was bumped up from $420,000 to $480,000, and Habitat for Humanity Huron Valley’s homebuyer education program, which wasn’t previously funded, is now receiving $22,528.

Board members had few questions regarding the staff recommendations to the funding changes. Mike Moran, supervisor for Ann Arbor Township, asked whether the city of Ann Arbor’s sewer fund contributions were cash or a reduction in connection fees. “Why? Are they increasing yours,” asked Bill McFarlane, Superior Township’s supervisor. Moran laughed: “I don’t know – that’s why I asked.”

After the meeting, Callan clarified for The Chronicle that the sewer funds are specifically from the Walnut Ridge fund, managed by City of Ann Arbor public services unit. In 2000, the city reached an agreement with the developer of the Walnut Ridge residential development in Scio Township – in exchange for hooking up to the city’s sanitary sewer system, the developer agreed to pay $350,000 for use in affordable housing projects. Callan said that Carrot Way – another affordable housing project developed by Avalon Housing – has used some of these funds. When architectural drawings and engineering estimates are completed for Near North, Callan said, the office of community development will send a request to city council to approve the use of the sewer funds for that project.

At Tuesday’s meeting, Moran also asked whether the funded projects required compliance with the Davis Bacon Act, which mandates that public works projects pay prevailing wages. Thompson said that they were compliant. And any projects that received federal stimulus dollars were also required to comply with the “Buy American” clause of the American Recovery and Reinvestment Act, he said. So materials like drywall and cement would need to be purchased from American firms.

Administrative Costs: An Analysis

At the board’s March meeting, Barb Fuller – deputy supervisor of Pittsfield Township – had asked for more details about costs related to administering federal grants received by the Urban County. On Tuesday, Callan gave board members an analysis for administrative costs in the calendar years 2008 and 2009.

Different federal programs have different caps on the amount that can be used for administration, she said. CDBG allows for 20% of a grant to be used for administration, for example, while the HOME program allows for 10%. In 2008, administrative costs of $784,861 accounted for 12.03% of the total $6.357 million in funding managed by the office of community development. Last year, administrative costs totaled $1.007 million, or 14.82% of the $6.796 million in total project funding.

The increase in administrative costs in 2009 was due to ramping up projects funded by the federal Neighborhood Stabilization Act, Callan said. Other major efforts for the year included bringing the city of Ann Arbor into the Urban County – the city previously managed its own CDGB and HOME funds – and developing the model for integrated human services funding between Washtenaw County and city of Ann Arbor. The office also manages the county’s Barrier Busters program, which helps coordinate efforts of human services agencies.

“We’re working hard to manage these funds,” Callan told the board. “We don’t have a lot of fluff.”

Mary Jo Callan, director of the Office of Community Development, discusses proposed funding for housing projects at the Washtenaw Urban County meeting on Tuesday. At left are Ann Arbor city councilmember Margie Teall and county commissioner Leah Gunn, who chairs the Urban County executive committee. At right is Damon Thompson, OCD's operations manager. (Photos by the writer.)

The group also had a frank discussion about problems with struggling Gateway Apartments in Ypsilanti Township – the complex is operating at a loss and is putting strains on the nonprofit Avalon Housing, which took over management from the nearly-defunct Washtenaw Affordable Housing Corp.

In addition, Urban County members reallocated federal funds that had previously been earmarked to support a county land bank. The county’s board of commissioners voted to dissolve the land bank earlier this month.

Also approved during Tuesday’s meeting was the draft of an annual plan for July 1, 2010 through June 30, 2011. The plan outlines projects and a nearly $4 million budget from two federal programs for low-income neighborhoods. Avalon Housing’s Near North apartment complex, the Delonis Center homeless shelter, and an owner-occupied housing rehab program are among the projects being funded.

Staff of the Office of Community Development, a joint county/city of Ann Arbor department which among other things manages the Urban County projects, also reported on efforts to recruit more local governments to join the Urban County. OCD director Mary Jo Callan joked that there were two perception problems in marketing the Urban County: urban and county.

Background: What’s an Urban County?

It’s unlikely the group will change its name. “Urban County” is a designation of the U.S. Dept. of Housing and Urban Development, identifying a county with more than 200,000 people. With that designation, individual governments within the Urban County can become members, making them entitled to an allotment of funding through a variety of HUD programs, including the Community Development Block Grant (CDBG) and HOME Investment Partnerships. Those two programs provide funding for projects to benefit low- and moderate-income residents, focused on housing, human services and other community development efforts.

Washtenaw County and the townships of Ann Arbor, Ypsilanti, Pittsfield, Superior, Northfield, Salem, and Bridgewater got the Urban County designation in 2002. Later, the city of Ypsilanti and Scio Township joined, and just last year the city of Ann Arbor – which previously received HUD funding directly – joined as well, roughly doubling the amount of money available in the Urban County’s funding pool.

This map highlights the cities and townships that are members of the Washtenaw Urban County. (Links to larger image)

The funding comes with certain restrictions, and can only be used in certain low-income neighborhoods – as specified by HUD – or for residents who fall below a certain income level. Funds are allocated to specific projects by an Urban County executive committee, which meets monthly, with voting members from each participating local government. The group acts on recommendations made by the Office of Community Development, a joint county/city of Ann Arbor department.

The projects tend to be focused in the county’s urban areas, which have the largest clusters of low-income residents. But Leah Gunn, chair of Urban County executive committee and a county commissioner representing Ann Arbor, notes that since the group formed, all votes have been unanimous, gaining support from communities that don’t necessarily see direct benefit from the majority of allocations.

Gateway Apartments

At Tuesday’s meeting, the group was briefed by Jennifer L. Hall, housing manager for the Office of Community Development, about the situation at Gateway Apartments, a complex on West Michigan Avenue in Ypsilanti Township. It was the first and largest rental project undertaken by the Urban County, which allocated $310,000 in 2002-03 to the Washtenaw Affordable Housing Corp. WAHC, which owns Gateway Apartments, had used the Urban County money to rehab the 43-unit property.

WAHC had taken out a $1 million loan to buy the property, but now the nonprofit is “essentially out of business,” Hall told the Urban County executive committee. Avalon Housing, an Ann Arbor nonprofit, has taken over WAHC’s operations, including management of Gateway. WAHC’s board will be deciding how to dispose of its properties, Hall said. And if Avalon isn’t interested in buying Gateway or continuing to manage it, another buyer or property manager will need to be found.

The loan to WAHC is held by three banks: National City, Michigan Commerce Bank and the Bank of Ann Arbor. If a sale is made, the bank loan would be paid first. And if the sale to a party other than Avalon isn’t sufficient to cover the remaining loan balance plus the $310,000 Urban County grant, then the county would be on the hook for repaying that amount to HUD.

Why would HUD need to be repaid? Because the HUD funding stipulates that all of the apartments must be offered at affordable housing rates through December 2012. If not, the Urban County would be considered out of compliance, and would have repay the entire $310,000 to HUD, according to Hall.

Avalon estimated that it would need roughly $3 million to buy, rehab and operate the complex with supportive services, Hall told the executive committee. To achieve that, OCD staff had originally recommended putting another $740,000 of HUD funds – from its Neighborhood Stabilization Program (NSP) – into the complex, which would trigger an additional five-year HUD-mandated affordability period.

Avalon had planned to kick in another $430,000 from the Federal Home Loan Bank, Hall said. But that left roughly $2 million to find from other sources. When they first got involved with the project, it seemed likely that the Michigan State Housing Development Authority (MSHDA) would contribute the remaining funds. But given the economic downturn, MSHDA has prioritized investments for properties in which it already has a stake – and that doesn’t include Gateway.

Another possibility had been to seek funds from the second phase of grants with the federal Neighborhood Stabilization Program. The county applied, but didn’t receive an NSP2 award, Hall said.

For these reasons, Hall said they were withdrawing OCD’s $740,000 funding recommendation, not wanting to make a long-term commitment to what has become an even more problematic property that might soon face foreclosure.

There are several issues that make the property problematic. The buildings are in bad condition, Hall said, and Avalon – which provides supportive services to residents – isn’t generating enough revenue on it in rent to cover their expenses.

OCD director Mary Jo Callan said the current economy has added to Gateway’s problems – though not necessarily in a bad way for low-income residents. Rents in the local housing market are lower, in general, because of the economic downtown, which gives low-income renters more options, she said. In that context, Gateway is a less desirable option than others in the market, she said.

One factor making it less desirable are the many security problems at the complex, Hall said. The front building runs parallel to Michigan Avenue and shields a courtyard behind it, creating a security risk. Ideally there would be sufficient on-site staff to help avert crime, but the rents won’t support that expense.

At the March 23 meeting of the Urban County executive committee, Jennifer L. Hall, housing manager for the Office of Community Development, explains the status of funding for the Gateway Apartments complex in Ypsilanti Township.

Hall outlined several options for the executive committee to consider. One option is to find a new property manager who’ll take on the complex for the next 18-20 months, until the HUD-mandated affordability period ends. At that point, the property could be sold and the county wouldn’t be obligated to repay the HUD funds. OCD staff is talking with a potential property manager who might be able to minimize losses, while keeping rents in the affordable-housing range.

Mike Moran, Ann Arbor Township supervisor and an Urban County executive committee member, asked why Avalon Housing couldn’t just agree to manage the complex without offering supportive services.

Callan said that Gateway is one of three major properties that Avalon took over from WAHC, and all are problematic. [The other two major WAHC properties now managed by Avalon are in Ann Arbor, at 1500 Pauline and 701 Miller.]

Callan described Avalon’s approach as property management “with a social work touch.” For Avalon, she added, the Gateway property has become a drain on their day-to-day operations, as well as creating stress about their own identity. Avalon’s mission as a nonprofit supports extremely low-income residents by offering a range of services, such as help in managing substance abuse or mental health issues. Avalon doesn’t feel they can do that at Gateway in a financially viable way, and that’s why the nonprofit isn’t interested in taking on the property long-term.

If no solution can be found and the HUD funds need to be repaid, Hall said it would come out of the county’s general fund. But Leah Gunn, a county commissioner, noted that the county isn’t really in a position to provide those dollars, given its own budget challenges.

Moran later questioned why the $300,000 previously set aside for the land bank couldn’t be used to repay HUD for Gateway. [For details on the land bank, see Chronicle coverage: "A Night of Transitions at County Board."] Hall said those land bank funds, from a Phase 1 NSP award, must be used for revitalization projects – and they can’t use funds from one HUD program to pay back another HUD-funded program.

Karen Lovejoy Roe, Ypsilanti Township’s supervisor, said township officials have approached a few landlords, including McKinley, about taking over the property. There’s also the possibility that the township would condemn it, she said.

While the OCD staff and Avalon continue to work toward a solution, Hall said they were asking that the Urban County executive committee reallocate the $740,000 in Phase 1 NSP funds that had originally been earmarked for Gateway. Of that total, $640,000 would go to Habitat for Humanity of Huron Valley for housing purchases and rehabilitation, and $100,000 would be awarded to the Ypsilanti Housing Commission for Parkview Apartments, a 144-unit complex.

Later in the meeting, as part of its larger housing allocation vote, the executive committee unanimously approved the reallocation of Gateway funds as recommended by OCD staff. The vote also reallocated $300,000 previously set aside for the county land bank, directing $180,000 to Community Housing Alternatives for down-payment assistance and housing rehab. Another $10,000 will be allocated to Habitat for Humanity, and the remaining $110,000 will be split between Ypsilanti and Ypsilanti Township to pay for the demolition of blighted properties.

Also, $50,000 previously earmarked for the demolition of a house in Superior Township will now be used for demolition of property in Ypsilanti and Ypsilanti Township. Bill McFarlane, Superior Township supervisor, joked that it looked like his township, in this case, would be a “donor” – it’s a term that York Township supervisor Joe Zurawski has previously used, referring to members of the Urban County who have few projects in their jurisdictions that are eligible for Urban County funding.

Funding of CDBG and HOME Projects

Jennifer L. Hall, housing manager for the Office of Community Development, also presented funding recommendations for six affordable housing projects eligible for money from two federal programs: HOME Investment Partnerships and the Community Development Block Grant (CDBG). Both are administered through the U.S. Dept. of Housing and Urban Development (HUD).

Hall explained that the OCD staff had issued a request for proposals (RFP) in January and had received about a dozen responses. [.pdf file of the affordable housing RFP] A review committee had rated the applications on a range of criteria, including access to other reliable funding sources, a feasible timeline for the project, and evidence of collaboration with other agencies. Projects also needed to serve a certain number of low-income households within the jurisdictions of Urban County members, and compare favorably with other bidders based on cost per unit or level of services.

At Tuesday’s meeting, Hall reviewed the results of the review committee ratings. Funding was recommended for these projects:

• Habitat for Humanity of Huron Valley: $650,000 for acquisition and rehab of 13 units within the Urban County area. (Using $640,000 in funds reallocated from Gateway Apartments and $10,000 formerly earmarked for the land bank.)
• Community Housing Alternatives: $420,000 for homebuyer purchase and rehab of 15 units in the Urban County area. (Including $180,000 formerly allocated to the land bank.)
• Avalon Housing: $695,467 for refinancing and rehab of existing properties in Ann Arbor, totaling 46 units on Stimson, Ashley, Summit, Huron and Allen streets.
• Avalon Housing: $500,000 for construction of the Near North project on North Main in Ann Arbor.
• Arrowwood Hills Cooperative: $60,000 for down-payment assistance.
• Ypsilanti Housing Commission: $300,000 for acquisition and rehab of Parkview Apartments at 596 S. Hamilton in Ypsilanti, totaling 144 units. (Includes $100,000 formerly allocated to Gateway.)

Darrell Fecho, manager of Scio Township, raised concerns about the viability of the Near North project, given what the executive committee had just discussed regarding problems at Gateway Apartments. Damon Thompson, OCD operations manager, said that the $500,000 to Avalon Housing for its Near North project is contingent on results of a market study.

Fecho asked who would choose the firm to do the market study. Hall reported that the Michigan State Housing Development Authority (MSHDA) would make that decision, because it is also investing in the Near North project. Hall said Near North was very different from Gateway, in part because of its location in Ann Arbor. But if the market study doesn’t support the project, they won’t invest in it, she said.

Annual Project Plan

Damon Thompson, operations manager for the Office of Community Development, gave an overview of proposed projects for the coming fiscal year, beginning July 1, 2010, for the HOME Investment Partnerships and the Community Development Block Grant (CDBG) programs. The estimated allocation is $2,220,241 from CDBG grants and $1,685,812 from HOME.

Thompson cautioned that this was just a draft, and would likely be modified depending on actual allocations from these federal programs. The plan includes some of the projects that were awarded funding earlier in the meeting.

Proposed CDBG projects include:

• $673,494 for owner-occupied housing rehab provided by the OCD throughout the Urban County area.
• $333,036 for human services grants to the Ozone House (for transitional housing), SOS Community Services (for housing crisis services), Northfield Township‘s human services (for transportation) and the Shelter Association of Washtenaw County (for its Delonis Center night shelter).
• $401,600 for public improvement projects in Ann Arbor, Ypsilanti, Pittsfield Township, Ypsilanti Township, Superior Township and Northfield Township.
• $78,063 to Avalon Housing for multi-family housing acquisition and rehab.
• $20,000 to Ypsilanti for a neighborhood assessment of the Harriet Street corridor.
• $30,000 for demolition of three blighted residential properties in Ypsilanti.
• $180,000 for revitalization projects in Arbor Oaks, Arrowwood, Near North and the Maple corridor neighborhoods of Ann Arbor.
• $60,000 for rental code enforcement in several Ypsilanti Township neighborhoods, including West Willow, Grove Road, West Michigan and Ecorse Road.

Proposed HOME projects are:

• $60,000 in down-payment assistance in the Arrowwood Hills Cooperative of Ann Arbor.
• $200,000 in rental assistance for the Parkview Apartments in Ypsilanti, administered by the Ypsilanti Housing Commission.
• $19,674 to the Community Housing Alternatives of Ypsilanti for operating expenses.
• $50,000 to Avalon Housing of Ann Arbor for operating expenses.
• $14,616 to Michigan Ability Partners of Ann Arbor for operating expenses.
• $240,000 to Community Housing Alternatives for home-ownership assistance.
• $617,404 to Avalon Housing for rental rehab projects in Ann Arbor.
• $315,536 to Avalon Housing for construction of the Near North housing complex.

Barb Fuller, deputy supervisor of Pittsfield Township, asked about the administrative fees included in the budget. Of the estimated funding, 20% of the $2.2 million from CDBG and 10% of the $1.68 million from HOME – $444,048 and $168,581 respectively – will be allocated to the Office of Community Development for administrative costs.

Fuller asked what portion of OCD’s administrative budget this represented. Callan said she’d report back with exact numbers at a later date, adding that administrative costs for the office are roughly $1 million, or about 10% of their total budget.

Expanding Urban County Membership

Staff from the Office of Community Development are recruiting other municipalities in Washtenaw County to join the group, which currently consists of 11 units of government. Leah Gunn, who chairs the Urban County executive committee, reported that the Webster Township board has voted to join. When she added that their membership won’t take effect until July 1, 2012, Ann Arbor Township supervisor Mike Moran quipped, “Well, I guess it’s a little early to celebrate.”

Damon Thompson, OCD’s operations manager, clarified that they’re recruiting now in order to have all the documentation required by the U.S. Dept. of Housing and Urban Development done by June of 2011. HUD will process those documents, allowing new members to join the Washtenaw Urban County at the start of the following fiscal year: July 1, 2012. He reported that Augusta Township has said they’re interested, too.

Other eligible municipalities that aren’t yet members include Chelsea, Dexter, Saline, Manchester and Milan, and the townships of Dexter, Freedom, Lima, Lodi, Lyndon, Manchester, Saline, Sharon and Sylvan. Mike Moran asked, jokingly, whether there really was a Saline Township – he’d never seen officials show up at any of the meetings he attends. Saline Township does exist, Gunn confirmed – someone from the township had attended a county board of commissioners meeting last year to urge them to pass a millage supporting the MSU Extension program.

Thompson said the OCD sent out letters to all officials in non-participating governments about two weeks ago. They planned to follow up in the coming weeks, he said. Gunn urged other members to help recruit. “Talk it up among your fellow supervisors,” she said. “Tell them what a great group we are!”

OCD director Mary Jo Callan said that in large part, it’s a marketing issue. When people understand what the Urban County is, they are overwhelmingly positive, she said. “So it’s really a matter of perception – that’s why we’re starting two years in advance.”

Barb Fuller, Pittsfield Township’s deputy supervisor, suggested that OCD staff attend one of the monthly meetings of the county’s township supervisors, known as the CEO group. The next meeting is on April 1 at Scio Township Hall.

Gunn said it was clear that there was confusion over what the Urban County does, adding that her fellow commissioner, Jessica Ping, had asked how much it costs to join. [The interaction took place at the county board of commissioners March 17, 2010 meeting, where it was clarified that there is no cost to join.]

Hall noted that when a municipality joins, they get an automatic allocation of funds from the HOME Investment Partnerships and the Community Development Block Grant (CDBG) programs. All funds awarded to Urban County members are pooled, then allocated to specific projects by the executive committee, based on OCD staff recommendations. The disadvantage of joining, Hall noted, is that members can’t apply directly to the state for larger projects that use the same HUD funding sources – Chelsea has cited this as a reason for not joining.