• Talent priority: Monday, Aug. 19 from 5:30-7:30 p.m. in the lower level conference room at the county administration building, 200 N. Main in Ann Arbor. The group is led by Conan Smith (D-District 9).
• Civic infrastructure priority: Wednesday, Aug. 21 from 10-11:30 a.m. in the downstairs board meeting room at 220 N. Main in Ann Arbor. The group is led by Kent Martinez-Kratz (D-District 1).
• Economic development priority: Wednesday, Aug. 21 from 3-5 p.m. in the lower level conference room at the county administration building, 200 N. Main in Ann Arbor. The group is led by Andy LaBarre (D-District 7).
• Human services priority: Friday, Aug. 23 from 1-2:30 p.m. in the lower level conference room at the county administration building, 200 N. Main in Ann Arbor. The group is led by Felicia Brabec (D-District 4). A second meeting for this group is scheduled for Friday, Sept. 6 from 10-11:30 a.m. at the county’s Learning Resource Center (LRC) Room B, 4135 Washtenaw Ave.
• Environmental impact priority: Friday, Aug. 23 from 4-6 p.m. in the downstairs board meeting room at 220 N. Main in Ann Arbor. The group is led by Yousef Rabhi (D-District 8). A second meeting of this group is set for Wednesday, Aug. 28 from 4-6 p.m. at the same location.

At a special meeting on July 24, 2013, the board adopted a set of budget priorities to guide the administration as it works to develop the next budget, which must be approved by commissioners before the end of 2013. Those priorities, listed in order of importance, are: (1) ensure a community safety net through health and human services; (2) increase economic opportunity and workforce development; (3) ensure mobility and civic infrastructure for Washtenaw County residents; and (4) reduce environmental impact. [.pdf of budget priorities resolution] [.pdf of budget priorities memo and supporting materials]

County administrator Verna McDaniel is expected to present a budget for 2014-2017 at the board’s Oct. 2 meeting. For additional recent budget-related coverage, see: “County Eyes Slate of Revenue Options.”

The leadership of the Washtenaw County board of commissioners, from left: Felicia Brabec (D-District 4 of Pittsfield Township), Andy LaBarre (D-District 7 of Ann Arbor), and Yousef Rabhi (D-District 8 of Ann Arbor). Rabhi is board chair. Brabec serves as chair of the board’s ways & means committee, and LaBarre chairs the board’s working sessions. (Photos by the writer.)

Those priorities, listed in order of importance, are: (1) ensure a community safety net through health and human services; (2) increase economic opportunity and workforce development; (3) ensure mobility and civic infrastructure for Washtenaw County residents; and (4) reduce environmental impact. [.pdf of budget priorities resolution] [.pdf of budget priorities memo and supporting materials]

The vote on the budget priorities resolution was 6-1, with dissent from Dan Smith (R-District 2), who indicated that his No. 1 priority is long-term fiscal stability, followed by public safety and justice. Rolland Sizemore Jr. (D-District 5) had left the meeting before the vote, and Alicia Ping (R-District 3) was absent. Although it was not part of the four priorities, a resolved clause was added during the meeting, stating that “the long-term fiscal stability of the county [will] continue to be of import throughout the budget development process.”

The resolution was brought forward by Felicia Brabec (D-District 4), who’s leading the budget process for the board. It also laid out a framework for developing strategies to measure the effectiveness of county investments in these priorities.

Brabec described this approach as “both a policy and a paradigm shift” that can’t happen overnight, but one that’s critical for the county’s future. The board is forming work groups focused on each of the four priorities, as well as on the topic of human resources. These work groups will be meeting to develop as many as five “community impact” goals in each category, in work that’s expected to continue into next year and beyond.

The July 24 meeting also included an update from county administrator Verna McDaniel about the county’s current financial condition and preliminary projections for 2014. At her last presentation, on May 15, 2013, McDaniel told commissioners that the county needed to identify $6.99 million in structural reductions for the 2014 budget. The approach to addressing this $6.99 million target depended on whether the county moved ahead with a major bond proposal to cover obligations to retirees, she said at the time. That bond proposal was put on hold earlier this month.

Now, the projected general fund shortfall is $3.93 million on a roughly $101 million budget. McDaniel indicated that the shortfall will be addressed primarily with operating cost reductions ($3.83 million) as well as $100,000 in cuts to funding of outside agencies, including support for nonprofits. The lower shortfall resulted from revised actuarial data that significantly lowered the contribution that the county is required to make toward its unfunded retiree obligations. Other factors include: (1) a decision not to make a $1 million contribution to the general fund’s fund balance; and (2) $2.4 million in higher-than-previously-anticipated revenue.

McDaniel noted that if the county had chosen to bond, then operational cuts would not be needed, and the fund balance contribution could be made. She also reported that the general fund budget doesn’t factor in serious state and federal cuts to non-general fund programs. “Revenue is needed,” she said. “We need to figure that out.”

Commissioners Yousef Rabhi (D-District 8) and Conan Smith (D-District 9) both voiced interest in exploring possible new taxes. “I think it’s important that we strongly consider asking the voters of Washtenaw County if they’re willing to support some of the ongoing operations that we have,” said Rabhi, the board’s chair. “We need to pose that question at least to the voters in the form of a millage of some kind.”

Smith cited human services and public safety as areas that might gain voter support for a millage. During public commentary, representatives from SafeHouse Center urged commissioners to continue funding of that nonprofit, as well as for human service organizations in general.

The upcoming budget will be prepared without the major bonding initiative that until earlier this month was anticipated to occur later this year. The bonding was intended to cover unfunded pension and retiree healthcare obligations – for the Washtenaw County Employees’ Retirement System (WCERS) and Voluntary Employees Beneficiary Association (VEBA). The original maximum amount for the bonds had been estimated at up to $345 million, but updated actuarial data resulted in a lower estimate of about $295 million. During the July 24 meeting, commissioner Conan Smith said it’s unlikely that bonding could occur this year, although he’s still supportive in general of taking that approach.

McDaniel plans to present the 2014 budget to the board at its Oct. 2 meeting. Commissioners are required to adopt a balanced budget for 2014 by the end of 2013. At its May 1, 2013 meeting, the board had approved development of a four-year budget. However, commissioners have not yet decided whether to follow through by adopting a budget with that four-year horizon. And some commissioners – notably Ronnie Peterson (D-District 6) – have expressed skepticism about this longer-term approach. For the past few years, budget plans have been developed for a two-year period, though the board must confirm the budget annually.

Budget Priorities

One of the main agenda items at the July 24 meeting was a discussion of priorities that the administration would be asked to use as the staff develops the budget for 2014-2017. [.pdf of budget priorities resolution] [.pdf of budget priorities memo and supporting materials] Commissioner Felicia Brabec (D-District 4), who’s leading the budget process for the board, began by saying that this year, the board would focus on community impacts and creating a vision.

Felicia Brabec (D-District 4 of Pittsfield Township) is leading the board’s budget process as chair of its ways & means committee.

In 2014, that work would shift to developing strategies and metrics related to the community impacts, she said. The board would ask the administration to report back on a more regular basis to talk about how the budget reflects community impacts and investments in the board’s priority areas. It allows for a fuller and more rigorous look at what’s typically been called the budget reaffirmation, Brabec said. [In the two-year budget cycle that the county currently uses, the board votes to "reaffirm" the second year of the budget, usually with only minor changes.]

Brabec noted that the board had held two budget retreats – on March 7, 2013 and May 16, 2013 – and a July 11, 2013 working session focused on the budget. She said she’s had follow-up conversations with commissioners, and these four budget priorities were her best attempt to synthesize that feedback.

“This is both a policy and a paradigm shift for our county,” Brabec said. It can’t happen overnight, she added, and there will be bumps along the way. But this model is an attempt to create a solid process that will help reach the county’s goals, she said. It also sets forth a model for transparency, responsibility and accountability to the community, Brabec noted. Her hope is that, by working with the administration, the board can achieve the community impacts that will be set as part of this process. The framework will allow the board and administration continuously to assess and adjust its investments, she said, assuring that they’re making choices that align with their priorities and vision. She described it as a strategic, longitudinal and dynamic process.

The four priorities stated in the resolution are:

1. Ensure a community safety net through health and human services;
2. Increase economic opportunity and workforce development;
3. Ensure mobility and civic infrastructure for Washtenaw County residents;
4. Reduce environmental impact.

The resolution on budget priorities also “directs the Administrator to lead a structured and transparent process by which the Board, representatives from throughout the organization, and community partners engage collaboratively to develop a balanced budget proposal that (1) aligns the organization’s programs and services with the Board’s four priorities, and (2) includes a summary set of ‘community outcomes’ that declares benchmarks related to the Board’s priority areas.”

The board has named the framework for this budget decision-making process: “Community Impact Investing.” Part of the framework includes six “decision-making principles” that commissioners are asking staff to use in developing the budget. Those principles are:

1. impacts and outcomes drive investment priorities;
2. services are delivered optimally by the right provider, social and financial returns are calculated and articulated;
3. programs are evidence- and performance-based;
4. mandates that support outcomes and impacts are better funded;
5. the excellence of the County’s internal workforce is foundational;
6. programs and services should be encouraged to achieve the triple bottom line of financial returns on investment, contribution to social equity, and reduction of environmental impact.

Ronnie Peterson (D-District 6) wondered when the board would actually discuss dollar amounts for this upcoming budget, especially for funding of organizations like SafeHouse and other human service programs.

Brabec described the priorities as the “big picture,” which will in turn determine allocations in the budget. It’s a huge shift in process, she said. Noting that the priorities are listed in order of importance, Brabec said the board will be able to look at the budget that the administration brings forward and see how the allocations are aligned with the budget priorities.

Rolland Sizemore Jr. (D-District 5) said it looked like the board was duplicating things they’ve already discussed. Why is the board spending time on this, he asked, when they already have a list of guiding principles that they’ve used for years? Is there anything different here?

By way of background, the “guiding principles” of the county are listed on the county administrator’s website:

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.

Saying he didn’t understand the purpose of the proposed budget priorities, Sizemore asked Brabec to explain the difference between the current proposal and the existing principles.

Brabec said that in the past, the board would present its budget priorities, then the administration would develop a budget based on those priorities. The current proposal is an attempt to keep the board involved – not just during the budget development, but continuously as the county makes investments.

Sizemore said that as someone who is elected by residents, he already keeps the budget priorities in mind throughout the year. Although he felt it was duplicating a mechanism the board already had, Sizemore said he had no problem with it if the board is going to follow through on it. But if these priorities are just going to be put on the “back shelf,” he said, there are already plenty of reports like that. Brabec said her hope is that it will be a dynamic process.

Yousef Rabhi (D-District 8) noted that Sizemore had spoken about the classic issue between the board and the administrator, who’s been hired by the board to present a balanced budget. Brabec is trying a different approach, Rabhi said – to involve the board in evaluating and benchmarking the priorities that it’s setting. Some of the priorities are carried over from the previous budget cycle, he noted, but a lot of it is new. The hope is that this process will be more dynamic than in the past, he said.

Andy LaBarre (D-District 7) highlighted the working groups that will focus on the budget priorities. This approach hasn’t been taken before, he noted. The working groups will be developing a list of “community impacts” for each priority. LaBarre asked for clarification about the timeline for that work.

Brabec replied that the work groups will be meeting in August and develop up to five community impacts for each budget priority. Those impacts will be delivered to the administrator as the budget is developed.

Ronnie Peterson (D-District 6 of Ypsilanti).

Peterson brought up the issue of long-term legacy obligations to retirees, and stated that it should be one of the priorities. “It’s not going to go away, and it should be something we should be talking about,” he said. The county made a commitment to employees, and has an obligation to meet it, he said. The board has discussed it for the past few months in terms of a potential bonding to cover those obligations, he noted, and the public should continue to be part of that discussion. He pointed out that the state legislation allowing the county to bond for this purpose doesn’t sunset until the end of 2014. The public should know that the board isn’t hiding this issue, he said.

Peterson added that he wasn’t trying to make it a controversial issue, but “money’s always controversial when you lack it.” He said if the topic became part of the budget document, “I will be quiet for the rest of the night.”

Conan Smith (D-District 9) thanked Brabec and Rabhi for their leadership on this budget framework. It’s important to know what your goals are when you’re developing a budget, he said. For a legislative body, the messiest part of doing that is creating the framework. Giving clear, good direction to the administration is the board’s job, he said. It’s essential to know what the board wants to achieve over the long-term with its investments. The document that the board is voting on that night doesn’t make any allocation of funds, Smith noted. However, he said, it builds on the “experiment” that the board has been undertaking to identify goals for the community, and then pursues those goals “very deliberately.”

Smith called Brabec’s proposal a “significant step forward.” The process calls for defining metrics and clearly articulating those metrics for each priority. In the past, the board simply talked about its priorities, he said, and that wasn’t sufficient. He also said he appreciated the “consistent accountability method” that’s being proposed. The board will be checking outcomes, not just funding amounts. Commissioners will be asking if the investments are delivering the change in the community that they really want, Smith observed.

Rabhi in turn thanked Conan Smith for his leadership in identifying the importance of metrics during budget discussions earlier this year. Rabhi also agreed with Peterson about the importance of addressing unfunded liabilities. A lot of other communities have ignored the issue of unfunded liabilities, he said. The fact that the county is evaluating its options is the most fiscally responsible thing to do, Rabhi said. He asked Brabec how that issue could be incorporated into the budget priorities document, perhaps by noting the importance of long-term fiscal responsibility.

Rabhi suggested taking a certain percentage of any increase in revenues above what’s been budgeted, and using that excess to help cover unfunded liabilities – or adding it to the fund balance. In order for that to happen, that goal needs to be built into the budget priorities, he said. Fiscal stability and workforce sustainability are really overlays to the budget priorities, he added – saying you need those things in order achieve the other priorities.

Peterson clarified that he wasn’t necessarily saying that he wanted to continue the conversation about bonding, but it’s more about the obligation to employees. He alluded to Detroit’s bankruptcy, noting that the issue of unfunded obligations are affecting many communities – but it’s especially affecting people who were promised pensions. He’s concerned that if the county borrows money but doesn’t meet its investment goals, the shortfall will be made up on the backs of county employees. The county doesn’t have a strong reserve, he noted. The state constitution is supposed to protect pensions, but the constitution doesn’t mandate that governments have to make payments to cover those pension obligations.

Peterson also expressed concerns about the proposed four-year budget process. He didn’t see how the county could be responsive to possible fluctuations in contributions to WCERS and VEBA, if a four-year budget was in place. Anything can happen in this country, he said, citing specifically the panic after Sept. 11, 2001. If the stock market crashes, the county would have to meet its obligations out of the general fund, he said. Peterson added that he might be the only one to vote against a four-year budget, if the county doesn’t have a plan in place that is fiscally sound. At one point, the retiree obligations were fully funded, but “we got off track,” Peterson said. Time has passed, he said, but now the issue is how to get back on track.

LaBarre echoed Peterson’s comments, saying the county had to meet its retiree obligations – from a moral and reputation perspective. He considered the budget priorities as a guide for the future, with the assumption that the county won’t be bonding. It will be a long, hard process to develop a budget with the current constraints, LaBarre noted. But the intent is to meet the county’s retiree obligations fully, he said, even though that won’t be handled through bonding.

Brabec described the budget framework and priorities document as separate from a discussion about bonding, or about any other strategies the county might pursue to meet its retiree obligations.

Conan Smith (D-District 9 of Ann Arbor).

Conan Smith suggested that one of the measurable objectives for the budget should be that the unfunded liabilities are addressed. He said his personal preference would be to fully fund it. [The allusion was to funding those obligations by borrowing the full amount through bonding, which Smith supports.]

Smith asked Brabec whether a separate budget work group could focus on employee issues. That’s possible, Brabec replied, but she also wanted to make sure that each of the work groups keep in mind the importance of employees.

Smith agreed, but said he still felt there should be a work group that addresses personnel issues. One example he cited is a “blurring” of compensation between supervisors and the employees they supervise. So the compensation of the leadership across the organization should be examined, he said. Smith also mentioned some commissioners want to revisit the “red circle” policy. [That policy authorizes the administrator to increase an employee’s salary above the position's pay range. If an assignment extends past six months, the administrator must provide a report to the board about employees on extended assignment.]

The county has been a place where people crave employment because of the expertise they’re surrounded by, Smith said. “Putting ‘Washtenaw County’ on your resume really meant something out in the world,” he said. It’s important to keep fostering that environment.

Rabhi described the budget as one of the tools to help address the unfunded liabilities, among other issues. He said he respected Peterson’s concerns about a four-year budget, but he felt the unfunded liabilities could be addressed during the budget process – even if the budget is taking a longer-term view. The county could be locking in that commitment to fund those liabilities for a longer period, he said.

Brabec pointed out that long-term fiscal stability is one of the county’s guiding principles. She proposed adding a resolved clause to the resolution that would highlight this point:

Be it further resolved that the long-term fiscal stability of the county continue to be of import throughout the budget development process.

Peterson said he’d be supportive of that.

Outcome: Brabec’s proposed addition was accepted as a friendly amendment.

Discussion continued. Peterson spoke at length about various impacts to county revenues, including cuts in federal and state funding. He didn’t understand how the county could develop a four-year budget with such huge legacy costs, as well as uncertainty related to state and federal grants. In four years, there will be a new president and possibly a new governor, he pointed out. The county also doesn’t know what the actuary will require in terms of contributions to cover unfunded liabilities for retirees. It’s setting the county administrator up to fail, he contended, if her budget projections are off. If her projections are wrong, the only thing that she could do would be to cut from the board’s priority areas, he said.

It might be different if the county were generating revenues that would offset its retiree costs, Peterson said.

Rabhi picked up on that idea, saying that without having “new dollars” on the table, the county will face similar struggles in the future. “I think it’s important that we strongly consider asking the voters of Washtenaw County if they’re willing to support some of the ongoing operations that we have,” he said. “We need to pose that question at least to the voters in the form of a millage of some kind.”

The county can’t rely on state and federal funding that has traditionally supported county-run programs, Rabhi said. Property taxes are constrained by various state laws and constitutional amendments, he noted. The problem of unfunded retiree liabilities was created over time and no single person can be blamed, he added, but it’s important to address it head on. So the voters need to be asked if they’re willing to keep the county’s commitments to employees while keeping the same level of programs and services. He noted that the liabilities are huge and will impact the budget for years to come.

Taxes are a sensitive issue, Rabhi said, but voters need to be asked. Are they content with shrinking county government to the point of maybe only providing the lowest level of mandated services? Given current realities, “we just can’t expect to continue the way we are,” he said, providing the current breadth of services. “I know that’s kind of a doom-and-gloom statement, but I think it’s the reality that we’re facing and it’s the challenge of local government.”

Conan Smith said he fully supported Rabhi’s suggestion to talk about new revenue. Regarding the funding for unfunded liabilities, however, he reminded commissioners of something that their bond counsel, John Axe, had told them: It’s perhaps a riskier proposition politically to fund those liabilities via a voter-approved millage, because that gives the board the unilateral authority to raise taxes if the funds aren’t sufficient to meet those obligations.

Smith also said he’d love to put a human services millage on the ballot, and is eager to have a conversation about that. A millage for police services is another option to discuss, he said.

Smith noted that the bonding scenario had been presented as a “tax neutral” solution. To cover the unfunded liabilities by bonding, the county wouldn’t need to ask for an additional millage, he said, “nor would we have to cut the general fund.” To him, the bonding question is “unresolved.”

Dan Smith (R-District 2 of Whitmore Lake).

Dan Smith (R-District 2) cited several concerns he had with the budget priorities resolution. His first priority above all else is the short-term and long-term financial stability of the county. It’s troubling to see that the county is contemplating putting $1 million less in its fund balance next year than originally contemplated, he said. A healthy fund balance is a critical part of financial stability. His second priority would be public safety and justice, and there are a lot of mandated and non-mandated services that fall under that category. A distant third priority would be roads, Smith said.

Conan Smith responded, saying he thought that public safety was a priority that was interwoven with the four priorities stated in the resolution. He cited sheriff Jerry Clayton’s focus on a “social justice” approach to public safety, and wondered if Brabec had talked to Clayton about his team’s role in the proposed working groups.

Brabec said she had talked to Clayton about the notion of a social justice campus, but hadn’t discussed it in the context of the budget work groups. She saw public safety as integrated into several of the priorities, primarily the priorities on creating a community safety net and ensuring economic opportunity.

Conan Smith also clarified with Brabec that roads would be part of the third priority – on ensuring mobility and civic infrastructure. He said he supported everything that Dan Smith had identified as priorities, adding that the board needs to ensure that the work groups tackle those subjects. “I think the framework allows for that,” he said.

LaBarre reported that the topic of the next working session, on Aug. 8, would focus on the budget. So commissioners can continue hashing out some of these issues then, he said.

As the discussion came to a close, Peterson again voiced his opposition to a four-year budget, saying he was “totally opposed” to that approach. Rabhi responded, noting that although an original draft of the resolution had mentioned a four-year budget, the most recent version had eliminated references to that. Brabec had made those changes in order to address Peterson’s concerns, Rabhi said.

Brabec added that the resolution is meant to provide a budget framework, regardless of the timeframe. The discussion about whether to develop a four-year budget will be addressed separately, she said. Peterson replied that “in front of all of these witnesses, I’ll take your word and hold you to it.” He indicated he’d vote for the resolution based on that assurance.

Outcome: Commissioners approved the budget priorities resolution on a 6-1 vote, with dissent from Dan Smith (R-District 2). Alicia Ping (R-District 3) was absent, and Rolland Sizemore Jr. (D-District 5) had left the meeting prior to the vote.

Financial Update

County administrator Verna McDaniel gave an update on the county’s financial condition, and a look ahead at the upcoming budget. [.pdf of McDaniel's presentation] She had previously given a report to the board on May 15, 2013, when she’d been advocating for a bond proposal. At that time, she had told the board that $6.99 million in structural reductions were needed in 2014, in order to provide a balanced budget for the four-year period of 2014-2017. If the county didn’t bond, she’d said at the time, all of that $6.99 million – including $5.06 million related to covering unfunded retiree obligations – would need to come from operational cost reductions.

County administrator Verna McDaniel.

On July 24, she told the board that revenues would be $2.4 million more than previously projected. [That's based on information from the equalization report that was delivered at the board’s April 17, 2013 meeting.]

She noted that many of the previous assumptions are unchanged. That includes projecting a 1% increase in property tax revenue each year through 2017, and getting $5.3 million per year in state revenue-sharing.

Her current analysis is that $3.93 million in structural reductions are needed, McDaniel said. In explaining the lower shortfall, she said the original estimated amount of $5.06 million in contributions needed to cover unfunded retiree obligations had turned out to be high, and was now estimated at about $2 million.

To address the $3.93 million shortfall, McDaniel said most of the reductions ($3.83 million ) will come from operational cuts. In addition, she’s proposing cuts of $100,000 to “outside agency” funding, which includes the county’s support of nonprofits. She also expects to eliminate a previously planned $1 million contribution to the general fund’s fund balance in 2014.

However, McDaniel also proposed that any additional revenues above the projected 1% increase in property taxes each year should be allocated to the fund balance as unearmarked reserves. Any surpluses at the end of each year would also be moved into unearmarked reserves, she said. The additions to the fund balance will be incremental, “as opposed to being baked in,” she said, “because baking it in will create an undue burden on the organization.”

McDaniel reminded the board that the county had made $30 million in reductions over two years in 2010 and 2011, and another $17.5 million in cuts during 2012 and 2013. With $3.93 million in proposed cuts next year, “we’re close to the finish line,” she said. “We think we can do this.” She plans to make a formal budget recommendation to the board on Oct. 2.

For the non-general fund portion of the budget, programs and services that are funded with federal and state grants face serious challenges, she said. Those issues were not addressed in her budget presentation, she added, but she wanted the board to keep it in mind. “Revenue is needed – we have to figure that out.”

Financial Update: Board Discussion

Conan Smith noted that when the budget had factored in bonding, the structural reductions were originally estimated at $1.83 million. If bonding were to move forward now, he said, there would be no need for operational reductions and the county could make its $1 million contribution to the fund balance. By abandoning the bonding proposal, he added, it is forcing cuts on the organization and reducing the contribution to the fund balance.

Kelly Belknap, Washtenaw County’s finance director.

Smith then asked for an explanation of the relationship between the fund balance and the annual cash flow. Each June for the past couple of years, “we’ve cut it pretty thin,” he said.

Kelly Belknap, the county’s finance director, confirmed that the county had “dipped below zero” in the summer, in terms of its ability to meet payroll with cash flow. Each year, the county in May or June enters into a negative cash balance, she said, because property taxes aren’t collected until July. The county’s policy is to borrow internally from its fund balances that are outside of the general fund, she said. When tax revenues are received later in the year, those other fund balances are repaid.

Conan Smith clarified with Belknap and McDaniel that this is considered an acceptable practice, but not a best practice. He said he wasn’t trying to blame anyone, but wanted to make clear that there are “consequences of walking this particular path.” He noted that the other way to address it would be to make even deeper operational cuts to the general fund, which is not something that the administration is proposing.

Ronnie Peterson confirmed that the county was making actuarial-recommended contributions to both WCERS and VEBA. He noted that some employees are in the Municipal Employees’ Retirement System of Michigan (MERS), a statewide system. McDaniel reported that most employees in the sheriff’s offices are in the MERS plan, though she didn’t have specific figures on hand. She noted that the county also makes required contributions to that system, in addition to WCERS and VEBA.

Peterson wondered if the county could expect large fluctuations in the amount of contributions it would need to make to MERS in the future. That should be part of the board’s discussion, he said. McDaniel replied that the amount fluctuates each year, and it’s been going up. Those figures are included in the budget projections, she said. Peterson wanted to make sure that MERS was included in the discussion about legacy pension costs, saying that it also impacts the budget.

Conan Smith noted that the MERS system is the healthiest fund – saying that it’s about 88% funded. But the challenge is that the county doesn’t control the assumptions for that system in the same way that it can for WCERS and VEBA, he said. So in 2010, there was a $600,000 increase in the contribution that the county was required to make for MERS, for example. He agreed with Peterson that it was important to be aware of the volatility of MERS.

Outcome: This was not a voting item.

Financial Update: Public Commentary

At the beginning of the July 24 meeting, Doug Smith – wearing a Washtenaw Watchdogs T-shirt – told the board that commissioner Conan Smith has repeatedly stated that the county has made its scheduled contributions to the retirement accounts, and that the county is therefore not responsible for underfunding those accounts. “He’s deceiving you – whether he’s deceiving himself is not clear,” Doug Smith said. In 2000, the WCERS account was overfunded by $4 million. Since then, it has been progressively underfunded until it became underfunded by more than $40 million in 2007. That was before the financial crisis of 2008, he noted, and before the pension plan was re-opened for new members. That means the county board watched the fund lose ground by about $6.5 million each year between 2000 and 2007, Smith said, and nothing was done to investigate or correct the situation. The county didn’t pay its annual contribution to VEBA in full until 2010, even though it was severely underfunded, he said.

From left: Conan Smith (D-District 9 of Ann Arbor) and Dan Smith (R-District 2 of Whitmore Lake).

Smith referred to a New York Times article he’d given to the board, which reported that actuaries have been making unrealistic assumptions about returns on investments for many years. That means pension funds are much more underfunded than industry practices would estimate, he said. For Washtenaw County, actuaries are still using an unrealistic net gain on investments of 7.75%, he said. For the WCERS account, the actual return has been 3.4% since 2000. If the actuary used a more realistic number, the current underfunding would be much higher than $300 million, he argued.

In 2007, the board made a decision “so stupid that it must have been on purpose,” Doug Smith said. Even though the county had eliminated the defined benefit pension plan in 1984 in favor of a defined contribution plan – which by 2007 covered about 80% of county employees – the county in 2007 decided to let all employees buy back into the pension plan. It was a “gift to employees, including Verna McDaniel, at taxpayer expense,” Smith contended. McDaniel is employed by taxpayers, he said, and she is not serving them well. The entire problem with underfunding the retirement plan rests with the board, “and I’m tired of hearing Conan Smith say otherwise,” he concluded.

During the final opportunity for public commentary at the end of the meeting, Doug Smith asked for confirmation of his understanding of McDaniel’s presentation: Even if the administration isn’t happy about making budget cuts, the roughly $4 million cut over four years is manageable without the bonding. He also wanted confirmation that the budget was being prepared with the assumption that the county would not be bonding.

Financial Update: Public Commentary – Commissioner Response

Conan Smith acknowledged that Doug Smith was right: “I had missed the shorting of the VEBA in 2006-09. I’d been told differently, and I didn’t validate that information.” He said he’d go back and look at what the rationale was for that decision, but “it almost doesn’t matter. We’ve got to deal with it looking into the future.”

Conan Smith also affirmed that “absolutely the budget is manageable.” There are sufficient general fund revenues to cover the contributions that must be made each year toward unfunded retiree obligations. “The question is always: What are the consequences of doing that?” he said. The county has been making operational cuts ever since he got elected, Smith said, and it would be possible to make more cuts. But “we have cut to the bone already,” he added. Making additional cuts would result in measurable, immediate reductions in services to residents, he said.

As for bonding, it’s almost inevitable that they wouldn’t be able to bond this year, he said, because of the timing needed to move through the bonding process. Given that the board must adopt a balanced budget by Dec. 31, it would be irresponsible of McDaniel not to present a budget on an assumption that no bonding would take place, he said.

Andy LaBarre addressed Doug Smith’s comments that had questioned the motives of commissioners. LaBarre felt those comments were wrong. He said he appreciated the service of Conan Smith, Yousef Rabhi and Verna McDaniel. “I just wanted that said for the record,” LaBarre concluded.

Communications & Commentary

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

Communications & Commentary: SafeHouse Center, Human Services Funding

Three representatives of SafeHouse Center – a nonprofit that provides support for people affected by domestic violence or sexual assault – addressed the board at the start of the July 24 meeting. Barbara Niess-May, the nonprofit’s executive director, thanked the board for its support of SafeHouse as well as other safety net services in the community. It makes an enormous difference to people who find themselves struggling and needing an extra hand during a difficult time. She noted that the coordinated funding program is critical, and she encouraged commissioners to keep it a priority. Any loss to that funding would impact the quality of life for many people, including survivors of domestic violence and sexual assault.

Molly Resnik, a co-founder of SafeHouse Center, and SafeHouse board president Rob Oliver addressed the county commissioners during public commentary, advocating for continued support of the nonprofit.

About 10 years ago, SafeHouse took on the task for providing sexual assault services on behalf of the county, Niess-May explained. There was an agreement about how much funding it would take to support that work, she said, but those amounts subsequently have been reduced. Like everyone else, SafeHouse is doing its best to do more with less, she said, but the need has not lessened. SafeHouse serves about 5,000 women, children and men each year, with a staff of 24 and 150 volunteers. SafeHouse is “definitely leveraging every last bit that we can,” she said. SafeHouse serves as a support for law enforcement, and works cooperatively with the county prosecutor’s office, “and in the end, we save lives,” Niess-May said. A loss of funds would mean a drastic reduction of services.

Molly Resnik, one of SafeHouse’s co-founders and a long-time volunteer, said she knew there were a couple of people at the board table who had been there in the early 1970s when organizers started putting together services for survivors of domestic violence and sexual assault. It’s heartening to see the continuity, she said, but frightening to see that in many ways, “we’ve gone backwards in response to budget cuts.”

Until recently, she had served on the board of the Ann Arbor Area Community Foundation, a partner in the coordinated funding approach. She’s very aware of the importance of prioritizing and of coordinating an approach to meet community needs. The one problem is that some services – like those offered by SafeHouse – “don’t comfortably fit into categories.” It’s been put into the category of emergency housing and homelessness, she noted, but it’s not exactly a fit. As the U.S Dept. of Housing & Urban Development (HUD) and others have redefined what homelessness means for the purpose of funding, it’s leaving SafeHouse out in the cold. Resnik said that for her, it comes down to saving lives. She has no doubt that there are women and children alive today because SafeHouse was there. She asked the board to remember that SafeHouse stands out, and somehow the community needs to reinvigorate the comprehensive services it offers.

The president of SafeHouse Center’s board, Rob Oliver, noted that the organization is effective despite cuts by the county, federal sequestration and funding cuts from the HUD. That’s why money from the county is so important. SafeHouse has hired a consultant to help with fundraising, so the nonprofit is doing as much as it can to be sustainable, he said. Oliver recalled his own experience with domestic violence years ago, saying that thanks to Resnik, his family had a place to go when they had to flee an abusive stepfather. Now, other families also have a place to turn. He urged commissioners to support SafeHouse and its work.

From left: Commissioner Kent Martinez-Kratz (D-District 1 of Chelsea) and Bob Tetens, director of Washtenaw County parks & recreation.

Several commissioners responded, expressing support for human services funding in general and SafeHouse specifically. Conan Smith noted that there are fiscal pressures on all local governments, and some of the cuts are because of economic conditions. But some cuts are because of decisions that the board chooses to make, he said, so having people come and articulate the critical importance of maintaining certain investments is really important. People need to know that even making small cuts to organizations like SafeHouse can have a direct impact on people’s lives, he said.

Ronnie Peterson said SafeHouse had brought its secret weapon by having Molly Resnik speak to the board. Washtenaw County government was part of the birth of SafeHouse, he said, and it’s important to make sure that this kind of safety net service is always a part of the county’s institutional funding. He joked that some people might think his politics have swung to the right because of his friendship with Dan Smith, a Republican commissioner. But Peterson said he’s always been focused on the delivery of services and outcomes. Every community should have a SafeHouse, he said. If the county can make a major long-term commitment to the humane society, Peterson added, then it should make a commitment to SafeHouse too.

Yousef Rabhi said he supported SafeHouse, and he thanked the representatives for advocating on behalf of the nonprofit. The partnership between SafeHouse and the county goes way back, he said, adding that he plans to continue advocating for human services funding in general, and for SafeHouse specifically. Although SafeHouse has a separate line item in the county’s budget, its funding has been decreased significantly over the years, Rabhi said. That decision needs to be reviewed.

Communications & Commentary: Thomas Partridge

Thomas Partridge called for an FBI investigation of municipalities in Washtenaw County, including the city of Ann Arbor, because of egregious, long-standing violations of civil and human rights of residents. In particular, he cited budget manipulations and priorities that resulted in the loss of substantial amounts of money between 2008 and today. He contended there’d been investment losses at the Ann Arbor Transportation Authority, Ann Arbor Public Schools as well as at the University of Michigan.

At his last turn at public commentary, Partridge told commissioners that priority items are being ignored, including plans for affordable housing, ending homelessness, an affordable countywide transportation system, and affordable, accessible education and health care. County residents are suffering, he said, and Washtenaw County is being left behind compared to other areas in the state. Commissioners should be seeking additional revenue sources, and lobbying the state legislature to allow for a progressive income tax, he concluded.

Present: Felicia Brabec, Andy LaBarre, Kent Martinez-Kratz, Ronnie Peterson, Yousef Rabhi, Rolland Sizemore Jr. (present during the first part of ways & means committee only), Conan Smith, Dan Smith.

Absent: Alicia Ping.

Next regular board meeting: Wednesday, Aug. 7, 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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For more detailed coverage of the problem and success statements that the council associates with each of the priority areas, see Chronicle coverage: “Council Focus: Budget, Safety, Infrastructure.” And for coverage of statements of councilmember sentiments in response to one of the planning session assignments – a 3-5 minute statement on “What I believe” – see “What They Believe: Ann Arbor City Council.”

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]

Washtenaw County commissioners Conan Smith and Rolland Sizemore Jr. confer before the start of the March 16, 2011 board meeting.

The discussion – along with the priorities themselves – highlighted the fact that county government will need to operate with diminished resources, making investments in a more targeted, strategic way. The budget priorities and decision-making principles developed by the board are intended to guide the county staff as they work to eliminate a projected $20.9 million deficit over the next two years.

The document gives guidance to the county administration to support programs that help residents feel safe and secure, that address the basic needs of children and families, and that increase economic opportunities for residents. The administration is also directed to integrate efforts across agencies to meet the county’s strategic priorities, and to ensure fiscal responsibility by focusing on long-term institutional stability.

Board chair Conan Smith, who led this year’s retreats and who drafted the budget priority document, told his colleagues that unless they make hard decisions to address the county’s structural deficit, they’ll be having these same discussions every two years. [The county operates on a two-year budget cycle.] Their decisions will have a human impact, he said – two-thirds of the county’s budget relates to personnel costs, and Smith didn’t think they could find enough non-personnel cuts to overcome the projected deficit.

Philosophical issues also surfaced during Wednesday’s discussion. Democrat Yousef Rabhi objected to a sentence stating that when the county emerges from this economic crisis, it should be smaller. Despite current rhetoric, smaller government isn’t necessarily better government, he argued. But he agreed with Republican commissioner Rob Turner that streamlining the county’s work was important, and that streamlining doesn’t mean the impact of county services will be reduced.

Kristin Judge raised concerns over a clause stating that mandated programs should initially be funded at their minimum serviceability level. She felt the language was too strong, and that the board shouldn’t be asking other elected officials – including the sheriff and judiciary – to start at that baseline level. Smith argued that elected officials, department heads and other staff are best suited to make decisions about which mandated programs and services deserve more funding – the minimum level is just a starting point.

The document is intended to give high-level guidance to the county administration, and at times during the discussion some commissioners expressed frustration that the board was too focused on wordsmithing. At one point, Wes Prater observed that they seemed to be arguing over “not much at all.”

Strategic Priorities, Budget Principles

Commissioners considered a draft of the board’s strategic priorities and principles for making budget decisions. They’ve been developing these priorities at a series of retreats held this year, led by board chair Conan Smith. [See Chronicle coverage: "County Board Connects, Hard Choices Loom" and "County Board Strategizes on 2012-13 Budget"]

Smith began Wednesday’s discussion by noting that he crafted the document to keep the priorities at a fairly high level, while still honoring a degree of specificity that had emerged in their talks regarding desired budget outcomes. [.pdf file of 2012-13 strategic priorities and budget decision principles]

In its introduction, the document sets out a vision for the county – that Washtenaw County provides leadership to create a world-class community.

Based on that vision, it outlines a series of five “guidances” aimed at directing the county administration and staff as they develop the budget:

1. Support programs that help residents feel safe and secure.
2. Support programs that address the basic needs of children and families.
3. Support programs that increase economic opportunities for residents.
4. Integrate efforts across agencies to meet strategic priorities.
5. Ensure fiscal responsibility focusing on long-term institutional stability.

For each of these guidances, a list of desired outcomes are listed that state what the 2012-2013 budget investments should accomplish. For example, for the first guidance – “Support programs that help residents feel safe and secure” – outcomes are: (1) provide a prompt response to emergencies; (2) target improved mental health and the reduction of substance abuse; (3) improve the strategic integration of human services with the provision of public safety and justice; (4) address homelessness as a public safety and security issue; and (5) consolidate public safety services throughout the county to the maximum extent possible.

The document also includes a list of six general principles that should guide budget decisions. They are:

1. Impacts and outcomes drive investment priorities.
2. Services are delivered optimally by the right provider.
3. Social and financial returns on investment are calculated, articulated and balanced.
4. Both immediate needs and root causes are strategically addressed.
5. Programs are evidence- and performance-based.
6. Mandates that support outcomes and impacts are better funded.

Smith reviewed some minor changes he’d made to the document since it had been previously distributed. The board then considered three amendments he proposed.

Strategic Priorities, Budget Principles: Amendment 1

Some elected officials have noted that they are responsible for providing mandated services, Smith said, and that those mandates should be reflected in the decision-making principles. He proposed an amendment related to that sentiment. [In addition to commissioners, other elected county officials include judges, the sheriff, prosecuting attorney, clerk, treasurer and water resources commissioner.]

The amendment states:

The Board acknowledges that elected countywide and judicial officials have a higher level of accountability directly to the public that is heavily influenced by the Board’s resource allocation decisions and therefore expects and encourages the active engagement of those officials to inform Administration’s recommendation regarding appropriate levels of service around those functions.

Barbara Bergman said that when the other elected officials need resources, the county board should also be informed, as well as the county administration. The board needs to be informed so that they don’t look ignorant, she said.

Outcome: Commissioners unanimously approved the first amendment.

Strategic Priorities, Budget Principles: Amendment 2

The document’s third guidance states: “Support programs that increase economic opportunities for residents.” A list of desired outcomes include this bullet point: “Integrate tourism promotion into our community economic development strategy.” In his second amendment, Smith proposed striking that outcome.

He noted that while the county supports the work of the Ann Arbor and Ypsilanti convention and visitors bureaus, it’s been argued that tourism itself isn’t a core mission of county government. In that light, this outcome isn’t relevant to the county’s general fund budget.

Outcome: Commissioners unanimously approved the second amendment.

Strategic Priorities, Budget Principles: Amendment 3

The fifth guidance states: “Ensure fiscal responsibility focusing on long-term institutional stability.” Smith proposed adding a bullet point to the list of desired outcomes for this guidance:

Reward and nurture the entrepreneurial spirit of the staff and departments that are developing and engaging new plans and ideas to streamline their operations, to provide greater services, and to raise more outside revenue to better serve a greater number of citizens within the county.

This proposed amendment received considerable debate. Bergman began by saying that although she likes the idea of rewarding people, the word “reward” implies that some financial payment would be made. She suggested instead using the work “praise.”

Rob Turner objected, saying there are times when they need to go beyond just nurturing or praising. It doesn’t have to be a financial reward, he said, but if a department goes above and beyond its duty, they should be rewarded in some way.

Curtis Hedger, Washtenaw County's corporation counsel, talks with county administrator Verna McDaniel at the March 16, 2011 county board meeting.

Bergman noted in the past, the county held an amazing annual employee recognition breakfast, but that became too expensive. Sometimes rewards are just not possible, in this economic climate. County administrator Verna McDaniel clarified that they still give out employee recognition awards, quipping that they just “cut the bacon.”

Turner said he’d be comfortable with “acknowledge” rather than reward – that still gives the administration some leeway, he said.

Kristin Judge then floated the possibility of creating a small fund – possibly $100,000 – from which to reward departments if they do outstanding work. The staff could use the funds like mini-grants to support programs that they wanted to do, but that might not be in the budget. Dan Smith said he liked the idea, but was concerned about putting that level of detail into the priorities document. He didn’t want to hamstring the administration. Judge said she didn’t intend for the idea to be included in the document, but that it was an argument for keeping the word “reward.”

Wes Prater cautioned commissioners, noting that they were talking about tax dollars. Some token of appreciation was fine – like a pen – but they needed to be careful. Leah Gunn agreed, adding that the decision to reward employees or departments was within the administration’s purview.

Turner again proposed changing the word “reward” to “acknowledge.” The document is intended to be instructional to the administration, he said, and after this discussion, McDaniel should understand their intent.

Yousef Rabhi suggested that instead of setting aside $100,000, perhaps the administration could reward departments by letting them keep any savings they identify. So rather than having their budgets cut because the staff finds efficiencies, those dollars would be kept by the department and used for other programs, he said.

Conan Smith wrapped up the discussion by taking Turner’s suggested wording change as a friendly amendment. The final version of the amendment stated:

Reward Acknowledge and nurture the entrepreneurial spirit of the staff and departments that are developing and engaging new plans and ideas to streamline their operations, to provide greater services, and to raise more outside revenue to better serve a greater number of citizens within the county.

Outcome: Commissioners unanimously approved the outcomes specified by the guidance, as amended.

Strategic Priorities, Budget Principles: Commissioner Discussion

Kristin Judge had several questions, comments and clarifications regarding the document. She began by asking whether they would be reprinting the posters that hung in the building, which state the county’s guiding principles. County administrator Verna McDaniel said her understanding is that the current document relates just to the 2012-2013 budget. Judge felt the document was about more than just a year or two. She suggested they revisit the county’s guiding principles at a later date, updating them based on this newer document.

Commissioner Kristin Judge.

Under the second guidance, Judge clarified that one of the desired outcomes – “Market support services more aggressively so residents have better access to help in times of personal crisis” – meant they would continue to do this. She felt the county already marketed its services. Barbara Bergman pointed out that in some cases they could do a better job – like getting the word out about the county’s prescription drug plan.

Judge then turned to the third guidance – “Support programs that increase economic opportunity for residents.” Is this stating that the county will increase its economic development programs? she wondered. The county already has an economic development & energy department, and supports Ann Arbor SPARK as well, she noted, through the Act 88 millage.

McDaniel said she understood this guidance to mean that the county’s investment in this priority can be either internal or through partnerships. She felt the wording was sufficient to allow flexibility in their approach. Judge wanted to make sure it captured the fact that the county can work with partners, and doesn’t necessarily need new programs or services.

Strategic Priorities, Budget Principles: Amendment 4

Referring to the fourth guidance, Judge took issue with one of its outcomes:

Lead the development and implementation of a “Blueprint for Collaboration” that accomplishes the following:

• Reductions in cost or duplication of the provision of “invisible” services; and
• Increased support for discretionary services that are board priorities.

Saying she loved blueprints, Judge wasn’t comfortable being this specific – to her, it indicated that they were starting something new that would require funding and staff time. If so, that would require a separate board vote, she said, like previous board resolutions in support of the Blueprint to End Homelessness or the Blueprint to End Illiteracy.

Prater didn’t think the word “blueprint” meant they needed a written plan. Conan Smith said the word might be too specific, but the intent is to indicate that the county will provide leadership. Bergman felt that leadership could take the form of personal responsibility for each commissioner – they could each find ways to reach out and engender collaboration in their own networks.

Rabhi agreed with Judge about the language being too specific. He proposed substituting a more general phrase: “To foster collaboration that accomplishes the following … ” He offered it up as an amendment, which Judge supported.

Turner suggested adding “strategy,” and Gunn offered a friendly amendment: “To create a strategy to foster collaboration that accomplishes the following…”

At this point, Curtis Hedger, the county’s corporation counsel, reminded commissioners that friendly amendments needed approval by the entire board. If any commissioners objected to it, the amendment couldn’t be considered friendly and would need to go through the entire formal voting process.

Commissioners Alicia Ping and Rob Turner.

Alicia Ping objected to the amendment. When asked by Gunn to clarify why, Ping said it still seemed to imply that the county would provide funding and staff time. When an opportunity for collaboration presents itself, she said, they should absolutely pursue it. But she didn’t believe they should go out looking for ways to collaborate.

Gunn then asked McDaniel for her opinion. The county administrator said she was listening for their intent, and it seemed clear that their intent was for the county to foster collaboration, if it can be done without a budget. She said the staff already does this, both internally and externally. They’ll continue doing it, but won’t be spending money on it.

Gunn then said she wanted to keep Rabhi’s original amendment, and to point out that the next night’s working session was focused on the topic of collaboration. It’s something the county is already doing, and it’s not costing them money, she said.

Prater noted that they seemed to be arguing over “not much at all.”

Commissioners then voted on the following amended outcome for the fourth guidance:

Lead the development and implementation of a “Blueprint for Collaboration” To foster collaboration that accomplishes the following:

• Reductions in cost or duplication of the provision of “invisible” services; and
• Increased support for discretionary services that are board priorities.

Outcome: Commissioners approved the amendment, with dissent from Alicia Ping.

Strategic Priorities, Budget Principles: More Discussion

Judge had several additional comments and clarifications. Looking at the budget decision-making principles, she noted that the first one – “Impacts and outcomes drive investment priorities” – seems to indicate that staff will need to do more to measure their work and write up more reports. She was concerned about giving staff more work, given how stretched they already are. McDaniel said it’s not her intent to give staff more than they can handle – they would strive for balance, she said.

Bergman commented that they need good measurements in order to secure additional funding from the state and federal governments. Judge agreed, but said it wasn’t clear how that principle applied more generally. Would the water resources commissioner, for example, be asked to report to the board with measurable outcomes? Judge indicated this wouldn’t be a good approach. She later said she had similar concerns with the fifth principle: “Programs are evidence- and performance-based.”

Looking at the outcomes listed under the first principle, Judge asked about the meaning of this bullet point:

The investment should directly address an articulated Board priority attendant to one or more of the Guidances listed above

Conan Smith clarified that the word “attendant” did not refer to a person, but rather meant they should be paying attention to the guidances.

Regarding the sixth principle – “Mandates that support outcomes and impacts are better funded” – Judge was concerned that the explanation for this principle cited minimum levels of serviceability:

The Board believes that all mandates on the County should be funded initially at their minimum serviceability level as determined by accepted law or practice in the best judgment of the Administrator or by policy of the Board. Programs designed to meet those mandates that further target an articulated Board priority and can evidence a high likelihood of succes should be funded above the minimum level.

Judge said this statement doesn’t speak for her, and made her uncomfortable. Conan Smith said he generally agreed, but if the county has 270 mandated programs, some of those really should be funded at their minimum level. The idea is to set the floor there, then let the experts – the elected officials, department heads and staff – determine how much more funding is needed.

Prater said they need to determine what the minimum serviceability level actually is. He’d be happy if they could fund everything at the minimum level, but even that will be challenging. Gunn agreed, saying that if they fund one program at the minimum level, perhaps they’d have more left over for a program that deserved higher priority.

Judge contended that the language was too strong. Are they going to tell the judges and other elected officials that they’ll only be funded at the minimum level, until they can prove that they’re successful and deserve more? Those officials are elected countywide, she noted, and therefore represent more people in the county than she does. She was uncomfortable making that statement to them.

For his part, Rabhi said there was something else that made him uncomfortable. The fifth guidance states: “Ensure fiscal responsibility focusing on long-term institutional stability.” Rabhi objected to one word in the explanation of that guidance [emphasis added]:

Emerging from this current economic crisis, the County should be smaller, stronger and more stable. Our fiscal policies and practices must drive reforms that ensure the sustainability of our programs and workforce.

Rabhi said he doesn’t believe that smaller government is better. It’s the rhetoric they hear now at the national level, he said, but he doesn’t support it. Rabhi recalled listening to president Barack Obama speak at last year’s University of Michigan commencement, where he talked about the good that government can do. Rabhi said he could support having a government that’s more efficient – this economic crisis presents an opportunity to do just that, he said.

Commissioners Yousef Rabhi and Barbara Bergman.

Rabhi moved to strike the word “smaller” from the document – the motion was supported by Gunn.

Conan Smith said he totally agreed with that value. But in terms of the budget process, it’s important that the board support the administration in its talks with labor, he said. The reality is they’ll be making decisions for the next two years that will have a human impact – two-thirds of their budget relate to personnel costs, and Smith didn’t think they could find enough non-personnel cuts to overcome the projected $20.9 million deficit.

They need to address the county’s structural deficit, Smith said, or they’ll be having these same discussions every two years. The administrator needs to know that the board supports her as she moves to make the operation smaller.

Gunn pointed out that they might end up smaller, but that doesn’t have to be a stated goal.

Dan Smith observed that they’d gotten to a point that he had hoped they could avoid – wordsmithing the document to death. This document is intended to provide high-level guidance to the administration, and should be taken as a whole. Having the word “smaller” in it or not won’t make a difference.

Turner said he appreciated Rabhi’s point, but to him, smaller means more streamlined. That doesn’t mean the county’s impact will be reduced.

Rabhi agreed with Turner’s point, and said perhaps it was sufficient to clarify this statement with the administration during their discussion. He withdrew his motion.

Conan Smith said Rabhi’s argument got to the heart of what this document is about, and he appreciated the point. They do have to acknowledge that structural reform is necessary, while understanding the purpose of county government.

Ping wanted the county to look at internal restructuring related to employee health care costs. The budget priority document points to a goal of focusing on wellness programs to control health care expenses, she noted, but they need to look at other ways to cut costs there, too.

At that, Rolland Sizemore Jr. pointed out that they could discuss the document until they were blue in the face. He felt that Smith had done an excellent job putting it together, and it was time to move forward.

Outcome: Commissioners voted unanimously to adopt the 2012-2013 strategic priorities and budget decision principles, as amended. [.pdf file of 2012-13 strategic priorities and budget decision principles (final version)]

[A message from board chair Conan Smith regarding these priorities and guidelines is posted on the county's website.]

CSTS Budget

Earlier in the meeting, the board was asked to approve the 2010-2011 budget for the county’s Community Support and Treatment Services department, which provides a wide range of programs for residents with mental illness and developmental disabilities. The budget year they were voting on is well underway – it runs from Oct. 1, 2010 to Sept. 30, 2011. [.pdf of CSTS budget summary]

Commissioner Wes Prater.

Commissioner Wes Prater commented that the impact of the CSTS budget is hard to understand, since it covers a different year than the county’s general fund budget, which runs from Jan. 1 through Dec. 31. County administrator Verna McDaniel replied that in the past, CSTS had brought forward its budgets on a quarterly basis for approval. She had asked them to report on a full fiscal year, so that commissioners could see the big picture – that’s what was before them now, she said.

McDaniel also pointed out that of the department’s $26 million budget, the county’s general fund is contributing only $404,000. The rest of the funding comes from federal and state grants and reimbursements.

CSTS director Donna Sabourin told Prater that she’d be bringing the next full fiscal year budget to commissioners for review in September, for the year starting Oct. 1, 2011.

Prater complained that the budget provided was hard to read and didn’t conform to the Uniform Budget & Accounting Act. It should be easier for commissioners and citizens to understand, he said. Prater also wanted to see comparisons with the previous year, as well as a report on the department’s goals and whether those goals were being met. Sabourin told him they could provide the information he requested.

Outcome: The board unanimously approved the CSTS 2010-2011 budget.

Award for “Green” Building

At the start of Wednesday’s meeting, Eric Hackman, a project manager with Tower Pinkster Titus Associates in Kalamazoo, presented the board with a LEED Silver award from the U.S. Green Building Council. The award was for the construction of the county’s 14A-1 District Court building in Pittsfield Township, which was completed last year. Tower Pinkster served as the project’s architect. The 41,000-square-foot courthouse is one of four 14A courts – others are located in Chelsea, Ypsilanti and Saline.

Hackman said the award brings them national attention, and that it was great working with a client who shared similar goals regarding sustainable building practices. Conan Smith, chair of the board of commissioners, accepted the award on the county’s behalf. He credited former commissioner Jeff Irwin – who’s now a state legislator representing District 53 – with championing this approach.

The award came in the form of a large, round etched-glass plaque – Smith joked that he planned to take it home and eat off it.

Communications, Liaison Reports

During the meeting there were several opportunities for commissioners to share communications. Here are some highlights.

Rolland Sizemore Jr. told commissioners that he’d like to schedule a working session to get an update on police services issues. In particular, he wondered about the status of talks between the city of Ypsilanti and Ypsilanti Township regarding forming a joint police department. If that happens, how will it impact the county’s budget? he asked. [Ypsilanti Township currently contracts with the county sheriff's office for deputy patrols – it's the largest contracting entity for that service.]

Leah Gunn serves on the finance subcommittee for the police services steering committee, which makes recommendations to the county board about sheriff deputy road patrol contracts. She said they were waiting until the county’s equalization report is released in April before making a proposal for setting the price of those contracts. The report will give them a better idea of the financial condition of local units of government, she said. [The annual equalization report provides details on the equalized (assessed) value of property in the county, as well as the county’s taxable value. Taxable value is used when calculating taxes for the county, its various municipalities and other entities that rely on taxpayer dollars, such as schools, libraries and the Ann Arbor Transportation Authority, among others.] Rabhi, who chairs the board’s working sessions, said a session on police services is set for late April.

Several other commissioners gave updates from the committees, boards and commissions on which they serve.

Rabhi, an alternative liaison to the Head Start policy council, reported that he’d attended a meeting where much of the discussion focused on human services funding. He urged everyone to contact their elected representatives at the federal level to lobby for continued funding of Head Start. He noted that commissioners had received an invitation to volunteer to read to groups of children during the month of April, and he encouraged them to participate.

At the recent public works board meeting, Rabhi said there was extensive discussion about recycling. Representatives from Recycle Ann Arbor’s drop-off station attended the meeting, to begin a conversation about getting funding from the county. Rabhi said they reported that since instituting a $3 gate fee, revenues for the drop-off station have fallen by roughly $100,000 – they aren’t doing well, he said.

There’s justification to approach the county for funding, he noted, given that two-thirds of the people who use the drop-off station live outside the city of Ann Arbor. He supported some kind of collaboration. At that same meeting, Rabhi said, the staff of the Western Washtenaw Recycling Authority gave a report regarding their move toward single-stream recycling. They’re exploring several options, he said, including potentially taking on debt to build their own facility. If they do that, they’ll likely need the county to back a bond for the project.

Rabhi’s final liaison report was on the county’s brownfield redevelopment authority. That group discussed a range of issues, including the possible elimination of brownfield tax credits, as proposed by Gov. Rick Snyder. This would obviously have a negative impact on urban areas, Rabhi said, making development there not as enticing. Also at the meeting, the authority voted to terminate the brownfield plan with Village Marketplace in Saline, for failure to pay taxes. The group also discussed a proposed brownfield plan amendment for BST Investments, for a property at 2810 Baker Road in Dexter. [Later during Wednesday's board meeting, commissioners scheduled a public hearing for that plan, to be held at its April 20, 2011 board meeting.]

In other liaison reports, Rob Turner noted that he’d distributed a written report to commissioners regarding the Washtenaw County Road Commission. The road commission had recently received a clean audit, he said. Their fund balance of $9.1 million stands at about 25% of expenditures. Wes Prater, a former road commissioner who previously served as liaison to that group for the county board, expressed concern that the road commission has about $30 million in unfunded liabilities for health care and pensions. Turner said he did raise that issue, and that the road commission is working on a 20-year plan to address those liabilities. That expense will be hitting the road commission’s general fund budget harder each year, Turner said.

Kristin Judge praised road commission managers, in particular citing Jim Harmon, director of operations, for being responsive and professional in dealing with residents during the season’s many snowstorms. She noted that they’ve had a busy year because of the weather, and she appreciated their work.

Judge also reported that the National Association of Counties (NACo) recently released their key legislative priorities – she distributed a copy to commissioners. She noted that NACo’s justice and public safety steering committee, on which she serves, passed a resolution of support for the National Initiative on Cyber Education (NICE). And she expressed optimism after hearing a recent report from University of Michigan economist George Fulton, who forecasts job growth for Washtenaw County in the coming years. However, she noted that during a speech about the forecast, he reported that he’d made the calculations before gas prices started to rise.

Appointments

Board chair Conan Smith brought forward three nominations for appointments, which require board approval:

• Juanita House to the Community Action Board for a term expiring Dec. 31, 2011. The board oversees community services programs that are managed by the county’s Employment Training & Community Services (ETCS) department.
• Linda King and Lucine Morrell to the Washtenaw Community Health Organization board for three-year terms expiring March 31, 2014. The WCHO is a partnership between the county and the University of Michigan Health System to provide services to people with mental illness, developmental disabilities and substance abuse problems.

Before the vote, Rob Turner noted that commissioners had received information about these appointments at the last minute. He didn’t know these people, and was concerned because he didn’t have time to review their applications and resumes.

Smith apologized, saying he realized that this was the third time he’d handled it in this way. He said he worked with county staff and leaders of the committees before making the appointments, and that he either knows the candidates personally, or knows someone who vouches for them. Nevertheless, he said he understood this wasn’t a best practice, but asked for the commissioners’ indulgence in this case.

Outcome: Commissioners unanimously approved the three appointments.

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

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

At their Jan. 29 retreat, Washtenaw County commissioners, staff and other elected officials gathered to talk about the county's budget priorities. The retreat was led by commissioner Conan Smith, the board's chair, who's sitting in the center of the horseshoe table. Other participants are sitting around the room's perimeter, off camera. (Photos by the writer.)

While no decisions were made, the group took steps toward reaching consensus on budget priorities. They identified among their main concerns: public safety, service delivery and human services. At the end of the five-hour session, several commissioners cited the main benefit of the day as building closer relationships with each other, which they hope will help the board and other elected officials – including the sheriff, prosecuting attorney and treasurer – work together more effectively as they make difficult decisions about programs and services to cut.

The retreat was led by board chair Conan Smith, who structured the day with time for sharing individual priorities and concerns, combined with small group work to discuss specific outcomes the commissioners hope will result from those priorities. For example, if public safety is a priority, a possible outcome might be the goal of responding to a 911 call in 20 minutes or less. The county could then budget its resources to achieve that outcome.

Though these kinds of examples emerged during the retreat, the work of setting priorities will continue. Smith said the goal is to develop a formal board resolution outlining their priorities, to guide the budget-setting process. The board will hold its next retreat on Wednesday, Feb. 9 from 6-9 p.m., immediately following its 5:30 p.m. administrative briefing. Both meetings are public, and will be held at the county administration building, 220 N. Main St. in Ann Arbor.

The county’s fiscal year mirrors the calendar year, and budgets are developed on two-year cycles. The current budget runs through the end of 2011. While there will likely be some additional cuts this year, most discussions are focused on the 2012-2013 budget, which commissioners will be asked to approve by the end of this year. [For additional background, see Chronicle coverage: "'State of County' Tackles $20M Deficit"]

This report summarizes Saturday’s discussions of personal priorities, aspirations for Washtenaw County, budget priorities, and reflections on the process. For breakout sessions, we covered the group focused on public safety. By day’s end there were threads of optimism – Yousef Rabhi, one of four new commissioners, said he felt inspired that they were starting to work not just as a team, but “almost as a family.” But notes of caution were sounded as well, as veteran commissioner Wes Prater told the group that “the most difficult part is yet to come.”

Setting the Stage: Personal Priorities

After a discussion about what participants hoped to get out of the retreat, Conan Smith asked each person to tell the group why they got involved in county government. Here’s a summary of their remarks. [Unless otherwise indicated, the speakers are county commissioners.]

Kristin Judge (D-District 7): Issues of public safety, and her activism against Walmart – because of the safety issues the store in Pittsfield Township posed – caused her to run for office. Judge said she also got involved in county government to help create the kind of community where she wanted to raise her family, and to show her children that it’s important to be part of the process.

Catherine McClary (county treasurer): McClary said she was motivated to provide services to county residents in a non-bureaucratic way – so that people can access the county’s services without necessarily knowing the right number to call.

Alicia Ping (R-District 3): She noted that her sister Jessica Ping had been involved in county government, and that they talked about county issues a lot. [Jessica Ping, who previously held the District 3 seat, did not run for re-election in 2010. Prior to her election to the county board, Alicia Ping served on the Saline city council.] Services provided by the county are less “in your face,” Ping said, so it’s important to communicate to residents and let them know what they’re getting for their tax dollars.

Conan Smith (D-District 10): For residents of Ann Arbor, county government is largely invisible, Smith said. Six years ago, when he first came into office, he said he couldn’t have articulated all of its services – but he did know that the county did things that were visionary, and that was exciting. Smith cited the blueprint to end homelessness as an example. It was a critical issue then, and now it’s beyond critical – “but we have vision to deal with that,” he said. Similarly, the county has taken the lead in literacy and environmental issues. He didn’t see other governments approaching problem-solving in the same way, and he wanted to be part of that. It was inspirational, Smith said, and “I hope we keep doing that kind of stuff.”

Barbara Bergman (D-District 8): When Bergman worked as a social worker in the 1970s, she said she discovered that if you knew your county commissioner and the federal bureaucrat for your region, “you could get things for kids.” The county had the staff to work through the bureaucracy and get funds for child protection and youth services. That’s an important service, she said.

Yousef Rabhi (D-District 11): Rabhi recalled that when he was knocking on doors during his campaign for county commissioner last year, no one knew what the county did. “That’s a concern for me,” he said, because people need to know how their tax dollars are spent. His hope is to engage the residents in what the county does. The county cares about people – his top priority is providing people-oriented services, especially for people who are struggling. There’s a connection between services that the county provides, and economic growth, he noted. The environment and transportation issues are important, too, and the county plays a role in those as well. Within the county, there are 28 municipalities, Rabhi said. People should be willing to work together for better efficiencies in these areas – that’s the direction they should be going.

Leah Gunn (D-District 9): Gunn said she was first introduced to county government in the “ancient year” of 1972. Over the years she’s seen it become more visionary and proactive. She said she was proud that she worked on the homelessness task force, the blueprint to end homelessness, and the Delonis Center – the county’s homeless shelter. Less well-known is the fact that in 1988, voters in the county approved a millage to build SafeHouse, a shelter for victims of domestic violence. Voters are generous, she said – they created the county’s park system, and its natural area preservation program. But the biggest crisis the county has now is in providing services, Gunn said: “The safety net is full of holes, and we need to do something about that.”

Dan Smith (R-District 2): His concern is the responsible management of “precious dollars” that taxpayers give the county. They need to find a way not to kick the can down the road. It’s their job to provide basic services, the core infrastructure of a county treasurer, clerk, water resources commissioner, and public safety services like the sheriff, prosecutor, and courts. That needs to be the No. 1 priority, Smith said.

Wes Prater (D-District 4): Prater’s primary interest is public safety. To have a decent quality of life, it’s mandatory to have good public safety, he said. The county needs to do a better job of performance management and tracking results – though he added that the sheriff’s office is doing a much better job at that than he can ever remember. The courts are very important, too – most commissioners support the courts, he said, and expect them to do a good job. That’s true for the prosecuting attorney too, he said.

Prater talked about a series of public planning forums that had been organized a few years ago by Tony VanDerworp, director of the county’s energy and economic development department. Feedback from the public was that transportation overall was the No. 1 priority – and the biggest element of that was roads. It’s still a major issue, Prater said, and will become more of an issue as revenues from the state continue to fall. Without state funding, it falls to local government to keep roads from deteriorating further. He pointed out that several municipalities have millages for road repair, which gives them more control. That’s going to become a major issue in this county, he said. He told the group they should keep in mind that unlike Washtenaw County, a number of counties have road commissions that are elected [as opposed to appointed].

Bill Reynolds (deputy county administrator): Reynolds said he still believes in the nobility of public service. County government is about people, he said. As a child of the system, Reynolds said, he fully recognizes the value of having services to take care of people. Every person they lose could be the person who changes the future.

Bob Tetens (director, county parks & recreation): Tetens said he first joined the county in 1978, working in the planning department. He worked on an inventory of county services, and helped develop units of measurement for county services. Over six months of doing the inventory, he said he was amazed on a daily basis with all the things that the county was involved in. It’s rewarding to see the county’s impact on the community. He left county government for several years, but said he returned because he wanted to have an impact. His main concern now is for stability – how do they implement a managed transition?

County commissioners Rolland Sizemore Jr. and Kristin Judge at the Jan. 29 retreat.

Rolland Sizemore Jr. (D-District 5): Sizemore said he doesn’t remember a time when his family wasn’t in politics. Some people in the room have a more formal education, he noted, but he’s got street smarts from the streets of Ypsilanti. He said he likes to consider himself a fixer, and he likes to deal with “little guys and little programs.” He helped set up a place for kids to go after school, and vandalism dropped in that apartment complex. Some people just need a little bit of hope, he said, and that’s what he tries to give them.

Rob Turner (R-District 1): Turner’s main focus is on the local level – he served on the Chelsea school board for nine years, and said he loves serving the public. Former county commissioner Mark Ouimet approached him about running, Turner said, by saying it was an opportunity to serve more people. [Ouimet was elected to the state House in November, representing District 52.] On the school board, they learned how to streamline services with ever-shrinking resources, Turner said. The county government isn’t here to take your money, he said. It’s here to provide services, to help people get back on their feet and be productive citizens, so that they in turn can help others.

Dan Dwyer (Washtenaw County Trial Court administrator and mayor of Plymouth): Dwyer talked about his career – he had worked in probation for the state Dept. of Corrections in Wayne County. That system was geared toward volume, he said – getting people through the system as quickly as possible. In the 10 years he worked there, he said he didn’t get to know the judges or prosecutors. Then he came to Washtenaw County to run probation and got to know judges and others in the system. They were less focused on volume, and more on the quality of service. Next he ran the correctional facility in Ypsilanti, and he was at that job when he got a call from Judge Timothy Connors, for the job of trial court administrator. Dwyer said he’d finally found a place where justice is done the right way.

Brian Mackie (county prosecuting attorney): Mackie started by quipping that his personal priority is “about restoring balance in the universe.” He grew up poor in a rich community, and he hated the government. Every once in a while they’d see a sheriff’s deputy or the cops, usually coming to take a neighbor away. So Mackie said he became what he thought would be a lifelong defense attorney. He worked at the free legal aid office in Wayne County, and described two clients in particular who pushed him toward being a prosecutor.

One was a woman who killed one of her children, and abused her other child. He won her case. Another client murdered someone in a hotel, but pled the charge down to attempted manslaughter – he won that case, too. Mackie said he felt that a lot of people dropped the ball. Balance, he decided, would be restored by getting into prosecution. Mackie reminded the group that there was another motivation they all had: “There’s ego involved – we think we can do a better job.” If they’re going to have a decent community, it needs to be a safe community. He noted that most victims are poor, or just trying to make a living – like the small business owner that gets stuck with bad checks. They have a huge obligation to do the best job they possibly can in serving the county’s 346,00 people, he said.

Jerry Clayton (sheriff): Clayton said he thinks government can work better. He worked in the sheriff’s office for more than 20 years, but said that one of the best things that happened was when he left and saw how the office operated from the outside, and the impact it has on people. He said that part of his reluctance to run for sheriff stemmed from his family. He was born in Alabama, and his grandfather marched with Martin Luther King Jr. during the civil rights movement. When Clayton came to work at the sheriff’s office, his relationship with his grandfather changed. Law enforcement had been the enemy – his grandfather had seen police dogs and fire hoses used against the civil rights protesters.

Clayton said he grew up poor. Similar to Mackie’s experience, from Clayton’s perspective, law enforcement wasn’t engaged with the community, it was punitive. Clayton said his response is that sometimes you have to make change from the inside. It’s easy to sit on the outside and complain – it’s much harder to get involved. He said he doesn’t think public service is noble. “I just think it’s what you’re supposed to do.” If you don’t like what’s going on, be a part of changing it, he said, “or shut up.”

Aspirations for Washtenaw County

Conan Smith asked participants to talk about their aspirations for the county, broadly as well as for the current budget cycle.

Yousef Rabhi: Rabhi said he’d been on a tour of the county jail the previous day, and someone there had pointed out that it’s good to see what the budget numbers actually mean. Every number and percentage they see in the budget connects with something on the ground – “that’s something we can’t forget,” he said. It’s not just numbers, but people. It’s also important to market the county to other units of government – what services can the county provide to them? Rabhi said he as looking at millage rates here compared to other counties, and Washtenaw County’s isn’t that high. He said he’s not proposing anything, but in tough times, millages are something to look at, too. To a certain extent he agrees with people who say the county needs to focus on certain programs and services, but at the same time, he hopes they can continue to provide a breadth of services.

Leah Gunn: Long-term fiscal responsibility is important, and maintaining services. It’s clear they can’t maintain all services, she said, so they need to decide which services are a priority.

Dan Smith: It’s important to be decisive. While they shouldn’t make swift decisions, if there’s something that can be done in March, don’t wait until December to do it, he said. Uncertainty is often worse for people – don’t belabor things. It’s also important to make structural changes in the most humane way possible. That means telling people as early as possible what will happen later in the year, so that they can plan. They shouldn’t wait until the end of the year to make decisions, he said.

Wes Prater: This will be a very difficult process, Prater cautioned. One thing he hopes for is that it be as transparent as possible. He noted that they’ve listened to him talk about complying with the Uniform Budget and Accounting Act. The county always gets a good mark on the audit, but in his opinion, it hasn’t been what it needs to be, in terms of clarity and transparency. They need to get reports on the revenue and fund balances at the beginning and ending of each year. He said he’s still waiting for a printed copy of the 2011 budget.

Bill Reynolds (deputy county administrator): The administration and staff are there to fulfill the objectives of commissioners, he said. But they also have an obligation not to jerk around department heads and employees.

Bob Tetens (director, county parks & recreation): The investments they make as an organization should meet the community’s needs and expectations, though they can’t do everything, he noted. Internally, he hopes for a managed transition as they implement some structural changes. They’ve got to break the cycle of budget deficits.

Rolland Sizemore Jr.: They need to take a look at the county’s buildings and grounds, Sizemore said. Also, programs for kid are important. He said he’ll be jumping up and down screaming about funding for those. His hope is that they can try to combine programs and departments to save positions, rather than cutting.

From left: commissioners Conan Smith, Leah Gunn, Rob Turner and Barbara Bergman during a breakout session at the county board's Jan. 29 retreat.

Rob Turner: As they go through this process, they need to look at costs per service, Turner said. What county programs provide the most services for the least cost? He doesn’t want to cut 20% from all departments – they need to see what’s being done well, with best results and delivered in the most cost-effective way. In the areas where that’s not the case, those programs need to look for ways to restructure. This is a long-term situation – Turner said he recently heard the economist David Sowerby say the economy likely won’t see a turnaround until 2015. But if they prepare now, when money starts coming in again, the county will be able to provide services more effectively. “I don’t think that’s a bad thing,” he said.

Dan Dwyer (Washtenaw Trial Court administrator): Dwyer said they shouldn’t kick the can down the road – government has a habit of doing that, he said. Also, when everything’s a priority, he noted, nothing’s a priority. He said he’s not aware of any service in this county that’s not being done well, but something’s got to be a priority. Also, he hopes there’s an appreciation of both branches of government – the county and the courts. If they can go into budget discussions with mutual respect and appreciation of those roles, he said, they’ll be better for it.

Kristin Judge: Engaging the public and employees is important in these budget talks – Judge said she thinks they missed out on that last time. Forums in the previous budget cycle were more for informing people about decisions, not for getting ideas, she said. And for the past two years, they’ve been dancing around the task of identifying priorities. She hoped this is the start to actually tackling it, noting that they got away with small fixes last time.

Judge agreed that taking a little slice from everyone’s budget isn’t effective. She hoped they wouldn’t use the words “everything’s on table” – if you’re an employee, that just means that everyone’s job is on the line. She also hoped that the process is open and transparent. The board should have this kind of meeting once a quarter, she said. It’s valuable and inspiring to know they have same goals. She also asked that people not dig in their heels and protect their own priority programs. That’s what stymied the board during the last budget cycle – she said she had been doing it, too. If they start by keeping an open mind, they’ll get better results, she said.

Catherine McClary (county treasurer): McClary described how she grew up in Ypsilanti and Augusta Township. Both of her parents were public school teachers – they weren’t paid well, she noted, because teachers weren’t unionized at the time. Her dad moonlighted as a bus driver because those jobs were unionized and he could earn more. Her earliest memories were going door to door to solicit support for a school millage. Turning to the county’s issues, McClary said the new finance director [Kelly Belknap], new county administrator [Verna McDaniel] and deputy administrator [Bill Reynolds] have been great to work with. She gave an example of working through an issue related to bank fees, which have escalated for the county. There are choices to make, and they sat down and talked about their options – because of that, their efforts are better coordinated, she said.

McClary then cautioned commissioners about putting the budget cuts on the backs of the county’s unionized and non-unionized employees. Perhaps they should ask the administrator to look at ways to address poor performance, she said. As the county downsizes and selects programs or services to retain, and as there’s staff attrition, the staff that remains has to be as high-performing as possible. Finally, McClary noted that they hadn’t talked about two elephants in room: (1) state cuts and the reinvention of state government, and what that means; and (2) the denigration of a career in public service. When you adjust for education and experience, public employees do not make more than the private sector, she said. Aside from the question of whether public service is noble or just it’s their job help people, by and large they do it well in Washtenaw County, she said.

Alicia Ping: Saying she agreed with Prater’s comments, Ping added that she does plan to dig her heels in a little bit, when it comes to representing her district. However, she assured her colleagues of her commitment to the board: When they have achieved a consensus on their vision and direction, she’ll stand behind it.

Barbara Bergman: Bergman disagreed with Judge – everything is on the table. They need to do a cost/benefit analysis on county programs, she said. They need to look at the value of what they’re doing, she said, “and sometimes, there isn’t enough benefit.” Bergman said she’s not being glib when she says they can do less with less. But they can’t stress their staff to the point that they’ll implode. Most of the county’s staff is very high performing, she said. But there is a straw that breaks the camel’s back. The county wants their good people to stay.

Jerry Clayton (sheriff): In looking at their budget, they need to think about the state’s budget – the governor has intimated some things that will have impact on the county budget, he noted, like state revenue-sharing. The governor has talked about reducing the Dept. of Corrections – that means pushing people out of the state criminal justice system, Clayton said. But some people can’t be rehabilitated, he noted, and the county will be left having to handle the fallout, adding that there also have been cuts in state police.

Clayton also raised the issue of collaboration, saying that it’s a wonderful thing, and that the county has led the way in many cases. But they shouldn’t be doing it just for the sake of collaboration. They need to ask if they are gaining something by collaborating, if they are delivering services better. He said he’d also encourage commissioners to look outside of the county, if they’re hoping to collaborate – but again, they should be measuring outcomes. This isn’t the last budget conversation they’ll be having, he concluded, so it should set the stage for future budget cycles.

Some of the participants at the Jan. 29 board of commissioners retreat, from left: County treasurer Catherine McClary; county prosecuting attorney Brian Mackie; Tony VanDerworp, director of the county's energy and economic development department; Bob Tetens, director of Washtenaw County Parks and Recreation; and Dan Dwyer, Washtenaw County Trial Court administrator.

Brian Mackie (county prosecuting attorney): Mackie began by saying there isn’t a day that goes by when he’s not glad that Jerry Clayton is sheriff. Clayton’s election ended an “eight-year nightmare,” Mackie said, referring to the tenure of former sheriff Dan Minzey. He also thanked McClary for raising the issue of how public service has been denigrated. He said he works with people who left the private sector to pursue a career in public service, and now they hear people say that they’re the problem. “We need to think a little bigger than that,” he said. Mackie said the false dichotomies of the last budget discussions – setting up human services against law enforcement – left a bad taste. Law enforcement is and always will be one of the first lines of defense for people in crisis, whether it’s your child going wild or your spouse not taking their medication and getting violent. People in crisis don’t call him or a mental health professional, Mackie said. They call 911. Law enforcement helps the mentally ill – it’s not a separate system.

Mackie also urged commissioners to think about the impact of their decisions. He recalled that during the last budget cycle, one commissioner said that due to budget cuts, some people might have to wait a couple of hours to get birth certificate – as though that weren’t a significant thing. That offended him, Mackie said, because for some people, coming to the county clerk’s office is a long trip. They need a birth certificate for some other purpose, he said, and they might be making minimum wage. If it takes them a half day to get what they need, you’re taking money out of their mouths.

Budget Priorities: Community Impacts

Participants were given colored index cards – Conan Smith asked them to think about the 10-20 year impact that current budget reforms might make. What would that look like? They’re setting the stage for future budgets, he said. Think about what you might brag about in 20 years, looking back on the impact of decisions that are made now. Think about what a headline might be in a couple of decades, as the result of decisions made in 2011. How did the community change?

From left: county commissioners Barbara Bergman, Yousef Rabhi, Dan Smith and Wes Prater write down their long-term goals for the county.

These thoughts will help them articulate the outcomes they need from this current budget cycle, Smith said. They need to be able to tell the administration that they want to invest in certain areas, in order to get specific outcomes that will help them achieve long-term community impacts.

After working individually to write down their thoughts, retreat attendees broke up into small groups to try to categorize the ideas on those index cards. They then reconvened as a large group to share the results.

The outcome was a set of six categories: public safety, service delivery, human services/children’s services, fiscal management/responsibility, energy and economic development. Here’s a summary of the long-term community impacts that were grouped into each category. These impacts represent the ideas of individual participants, not a general consensus.

Public Safety:

• making the county a safe place to live and work
• providing rapid access to mental health services
• providing response to emergency calls within 15-20 minutes or less
• housing stability
• a community where kids don’t use drugs, and parents don’t condone substance abuse
• consolidation into only two law enforcement agencies in the county – the sheriff’s office, and the Ann Arbor police department

Service Delivery:

• a government that serves people efficiently and collaboratively
• a fully integrated partnership of human services and police services
• a county that’s a leader in preserving open space, recreation, public transportation, human services, and general quality of life
• reduced overlap in government services
• a government that’s respected and trusted by all residents
• when the public accesses county services, they are directed to the appropriate staff member, regardless of who they originally call or email
• a county government that collaborates and consolidates services with cities, townships and nonprofits to enhance services
• county investments have created communities that are more economically prosperous, more environmentally sustainable and more socially just
• the county’s “systemic” investments focus resources on outcomes across department/agencies

Human Services/Children’s Services:

• a safety net for those most in need
• all residents are aware of services that will/could impact their lives during good/bad times
• homelessness ends
• no food scarcity
• child abuse is all but gone
• early education is promoted and supported so parents have the tools they need to give their children the best possible start to their education
• every child in the county has enough to eat, a safe place to live, health care, educational opportunity, and a world-class quality of life

Fiscal Management/Responsibility:

• a top bond rating given to the county
• a small county budget surplus projected
• an increase in structural revenue collection (no “grant chasing”)
• never see a headline saying the county loses money in investment or embezzlement
• realistic benefit packages
• health care benefits not only save money, but also provide wellness and prevention services, resulting in a healthier workforce

Energy:

• reduce energy consumption in county buildings by 40%
• county government’s energy use is fossil fuel-free

Economic Development:

• high employment opportunities
• a place that people and businesses want to come to, not leave
• local economy grows, thanks to small business owners
• tourism becomes a major draw

Breakout Groups: Public Safety

The group then used “dotmocracy” to determine which of the six categories of general services they felt were priorities – that is, each person used colored paper dots to vote for the categories they prioritized. The top four vote-getters – public safety, service delivery, human services/children’s services, and fiscal management – were then chosen as topics for small group breakout discussions.

Each index card indicates a "community impact" goal that at least one person at the county board retreat felt was important. These cards all relate to public safety – the category that received the highest priority after a "dot voting" exercise.

Staff members facilitated these breakout sessions, and four small groups of elected officials rotated through each of the topics for about 15 minutes each. Public safety received the most votes, so The Chronicle observed the breakout sessions for that topic. It was facilitated by finance director Kelly Belknap, who has a personal connection to the issue: Her husband is a sergeant in the Pittsfield Township Dept. of Public Safety.

The question posed for each category was this: What are the direct outcomes you hope to see from the investment of the 2012-2013 budget, that help achieve the county’s desired community impacts?

The public safety community impacts that were mentioned by commissioners and other elected officials included (not in ranked order): (1) making the county a safe place to live and work; (2) providing rapid access to mental health services; (3) providing response to emergency calls within 15-20 minutes or less; (4) housing stability; (5) a community where kids don’t use drugs, and parents don’t condone substance abuse; and (6) consolidation to result in only two law enforcement agencies in the county – the sheriff’s office, and the Ann Arbor police department.

[It's important to note that there was no effort to reach a consensus on these community impacts – they were simply identified by individuals as the impacts they'd like to achieve.]

Public Safety Group 1: Mental Health, Consolidated Services

The first small group included commissioners Barbara Bergman and Kristin Judge, and sheriff Jerry Clayton. Bergman began by saying they needed to provide better services for the mentally ill and substance abusers, especially in the 48197 and 48198 areas – the zip codes for Ypsilanti. She suggested that they should collect better data on the need for such services throughout the county.

Clayton asked how she would propose aligning that with the budget. If it’s a goal of the county to target certain areas for the delivery of services, would the board tie funding to that priority?

Belknap noted that there are two county agencies – the Washtenaw Community Health Organization (WCHO) and Community Support & Treatment Services (CSTS) – that have primary responsibility for mental illness and substance abuse services. In total, they receive about $1.7 million in general fund dollars, with additional revenue from state and federal sources.

Judge raised another public safety issue that was mentioned as a community impact – having fewer police agencies in the county. At this, Clayton responded that the idea would scare the heck out of some people. Already there are those who won’t come to the table to talk about consolidating services, because they think that’s a precursor to getting rid of their own police departments.

Judge noted that they weren’t at the retreat to “hold hands” – there were difficult decisions to make. Clayton observed that the county can’t force Pittsfield or Saline or any other municipality to get rid of its police department – that goal is too presumptuous, he said. However, the county can be a leader in service consolidation, he added – services like dispatch, SWAT, canine units, or computer forensics.

Over time, as budgets shrink, consolidation might happen, he said. But the fear of it, at this point, is already driving some people to their corners. And if the sheriff’s office is out of the conversation, he noted, then they’ll never get anywhere.

Clayton then proposed another outcome: Better integration of human services and public safety. When Bergman observed that cops aren’t social workers, Clayton replied that most of what they do is social work. He noted that they’re now talking with the University of Michigan School of Social Work, to possibly bring in interns to work at the sheriff’s office. The hope is to keep the mentally ill out of the criminal justice system, he said, and get them the services they need.

Bergman said the county needs a drug court on the east side, as part of the 14-A District Court. Clayton asked whether that would be a priority of the board. Having one sure would help, Bergman replied.

Public Safety Group 2: Sheriff’s Road Patrol

The next small group consisted of commissioners Conan Smith, Dan Smith and Rob Turner. Conan Smith started the discussion by saying he wanted to develop a definition and rationale for the county’s support of sheriff deputy road patrols. [Each deputy is known as a police services unit (PSU) – the term refers to a sheriff's road patrol deputy who is under contract with a municipality, with the amount including indirect costs as well as salary and benefits.]

Dan Smith suggested collecting data – things like the number of 911 calls received in each municipality, how many miles of roads there are to cover, what the response times are – then developing metrics to evaluate what services are needed, where services are needed, and who should pay. The outcome is a framework for determining the price of a PSU. What they should try to achieve is an understanding of what drives the cost/price, he said.

Conan Smith noted that there was a process to determine the cost – it had been important to reach agreement on that, he said. [See Chronicle coverage: "Washtenaw Police Services: What's It Cost?"] Now, they need to do the same on price, he added.

Turner raised the issue of the level of service, and how to provide an acceptable level at the most economic price. He said his business is in Dexter Township, and if there’s a break-in, he can get there in 30 minutes, but would wait much longer for a response from law enforcement. Dan Smith said that’s why they need data – if response times are 90 minutes, for example, and they think that’s unacceptable, they could set a goal for better response times, and determine what resources they need to reach that goal. There needs to be a countywide discussion on these issues, he said.

That discussion needs to be about the values around public safety, Conan Smith said, and the metrics behind them. Setting goals will help that conversation, he added. If they can say to a contracting municipality that it will take X number of PSUs to reach the goal of a 45-minute or less response time, then they can shape the conversation around how the county and the municipality can share the cost of reaching that goal.

Public Safety Group 3: Consolidation, Public Education

The third small group included commissioners Leah Gunn and Alicia Ping, and county prosecuting attorney Brian Mackie. Looking at notes from the previous two groups, Gunn said that the discussion needs to include not just issues related to the sheriff, but also the courts, prosecutors and public defenders.

Mackie stated that they want the reality and perception of a safe county, but they might have hit a wall on addressing the public safety issue – police chiefs can only do so much, he observed. Mayors and township supervisors need to start talking about it, too. Gunn asked if Mackie sees turf wars among the police chiefs. Not among them, he replied, but among their bosses. Gunn said the Metro Alliance – a group that brings together leaders from the county’s major municipalities – would be a good place to have those discussions.

We’ve done the easy stuff, Mackie said – the hard decisions, yet to be made, will mean people’s jobs are at stake. Communities want control over how their police services are delivered. So how can you get them to the table to talk about consolidation? he asked. The message has to be that your citizens can get better service for less money.

Ping raised the issue of the cost of a police services unit (PSU). Most citizens don’t know what services they get when their municipality contracts with the county for PSUs, she said. Gunn pointed out that the county’s general fund subsidizes the cost of each PSU by about $25,000, as well as funding 12 “general fund” deputies that are deployed throughout the county, as needed.

Ping wondered how the county can incentivize collaboration related to public safety. Saline Township, for example, doesn’t contract with the county – nor does it have its own police department, as the city of Saline does. But when something happens in Saline Township, those law enforcement entities respond. She noted specifically a mobile home park on the edge of the township that’s a problem.

Overriding everything is public education, Mackie said. He cited the recently released community report by the sheriff’s office as an effort in that regard. [.pdf file of sheriff's office community report] Gunn called the report a “splendid propaganda piece,” adding that she was a Clayton supporter. “He’s very smart, that Jerry.”

Mackie talked about the general climate of public safety. He noted that Michigan has a lower number of police officers per capita than any other Great Lakes state. What goes into the mind of someone who’s thinking of investing here? he asked. They bounce down the roads that are in disrepair – that’s a negative, he said. They look at the schools, they read what’s happening in the news, and if they’re from out-of-state, they probably associate this area with Detroit. Other cities – like Saginaw, Pontiac and Flint – suffer from crime, which in turn has caused property values to plummet. Mackie noted that the FBI has ranked Saginaw the most violent city in America for its size.

In that light, Ping observed that public safety is an important issue for the health of the local economy, and for economic development.

Public Safety Group 4: Homelessness, Levels of Service

The fourth group included commissioners Wes Prater and Yousef Rabhi, and county treasurer Catherine McClary.

In reviewing notes from other groups, McClary agreed that more services were needed for the mentally ill – she suggested adding services for the homeless, too – but disagreed that those services were only needed in the Ypsilanti area. It’s important for the whole county, she said, and pervades everything, from public safety to economic development.

Yousef Rabhi hangs a sheet of paper on the wall that lists county goals for service delivery in Washtenaw County.

When they talk about the cost of police services units (PSUs), Rabhi felt they needed to draw out how much it would cost per deputy for a municipality to fund its own police department. The county’s cost for a PSU should be lower than that, he said.

Prater noted that the state constitution mandates that if a citizen calls with a public safety problem, the sheriff must respond. However, it doesn’t mandate how quick that response must be, he added – it could be minutes, or two hours, or eight hours. Regarding cost, Prater said a study commissioned by the county indicated the county should pay 34% of the cost of a road patrol deputy, with the contracting municipalities paying the rest. Over time, the percentage that the county pays has shifted downward, he noted.

[By way of background, Prater was referencing what's known as the Northwestern study, conducted by the Northwestern University Traffic Institute (.pdf of Northwestern study) (.pdf of Northwestern staffing analysis chart). For more details on the road patrol issue, see Chronicle coverage: "Washtenaw Police Services: What's It Cost?"]

Prater said the sheriff has done a good job at trying to get at the true cost of a deputy patrol. The price charged is about $150,000, while the cost has been identified as roughly $176,000. That means the county is paying about $26,000 per deputy – “which is nowhere near 34%,” Prater said.

McClary again raised the topic of homelessness, saying she felt it should be addressed as a public safety issue. Rabhi noted that homelessness is usually considered in the human services category, which received fewer “dot votes” among the group than did public safety. Perhaps it’s a matter of framing the issue, he suggested. For example, is the Delonis Center – the county’s homeless shelter, on West Huron Street – really a public safety asset? If funding to address homelessness is facing cuts because it’s considered part of human services, maybe they need to look at it as a public safety priority instead.

Breakout Groups: To Be Continued

At the end of the breakout session, the group reconvened as a whole. They were running short on time, so rather than debriefing as a group, Conan Smith asked that each facilitator write up their notes, which will be distributed to the entire group in the coming week. He noted that they’d been missing key voices in the discussion. For example, he said, environmental issues hadn’t been at the forefront, but one of its main advocates – Janis Bobrin, the county’s water resources commissioner – hadn’t been able to attend. They needed to capture the discussions from the retreat and disseminate that information, he said, but also get feedback from a diversity of voices.

Next Steps: Continuing the Retreat

When the scheduled end time of the retreat arrived, the group hadn’t addressed the final agenda item related to structural reform: (1) How should the county assess what their business should be; and (2) how does the board inform the county administration about where they need to make deeper, more structural reforms.

The group discussed the possibility of continuing the retreat – this final topic, as well as further priority-setting discussions – at an upcoming working session. [Working sessions are held twice a month, on Thursday evenings following the board's regular Wednesday meetings. Like its regular meetings, board working sessions are televised on Community Television Network (CTN).]

Rob Turner expressed preference for the more informal setting they’d used at the retreat, rather than sitting around the boardroom table. It allowed them to become closer and get to know each other as individuals, he said – and that makes them more effective working together. In response to a suggestion that they hold the discussion after the working session, but move to a different part of the room, Yousef Rabhi pointed out that it would be odd to start the meeting on-camera, then continue it off-camera.

Wes Prater suggested holding these discussions after their bi-weekly administrative briefings, which are held on the Wednesday a week ahead of the regular board meeting, to preview that meeting’s agenda. The briefings are public but are held in a conference room – they are much more informal, rarely attended by members of the general public and are not televised.

Prater noted that the meetings would need to be noticed to the public. Joanna Bidlack of the county administrative staff said she’d check with Curtis Hedger, the county’s corporation counsel, but she said they’d likely need to notice it as a special meeting.

[They later set the next retreat for Wednesday, Feb. 9 from 6-9 p.m., immediately following the board's 5 p.m. administrative briefing. Both meetings are public, and will be held at the county administration building, 220 N. Main St. in Ann Arbor.]

Wrapping Up

Before ending the retreat, Conan Smith asked everyone to make a brief statement about the work they’d done during the day.

Several people commented that they had begun the day very skeptical – even cynical – with low expectations regarding the outcome. For some, this was based in part of their negative experiences at the last retreat, held in April of 2009. [See Chronicle coverage: "County Commissioners Review Priorities"] Even those who hadn’t attended that retreat, like Alicia Ping, had heard negative reports on it. But Ping described Saturday’s work as “phenomenal,” saying she got a lot out of the day. Kristin Judge said it was the best day she’s had as a commissioner so far – she took office in January 2009.

Yousef Rabhi said the day had inspired him, making him believe they could work not just as a team, but “almost as a family.” In the toughest of economic times, there are challenges, but also opportunities, he said. “It’s a time for hope, and a time for rebuilding on a foundation that’s stronger than it was before.”

Nearly everyone weighed in that they felt the day was productive. Dan Smith said one reason why it was successful was that it was so well-organized. “We weren’t just standing around the pickle barrel chewing fat.” He was among several people who thanked Conan Smith for his leadership at the retreat – the board chair received a round of applause.

Conan Smith told the group that he was more touched than he could have imagined during the morning session – when people had discussed their personal priorities and aspirations – and he thanked everyone for sharing their passion for county service.

Several commissioners also noted that this is just the beginning. “I just want to caution you that the most difficult part is yet to come,” Wes Prater said. Rob Turner observed that while it looks like they have a lot of common ground, the challenge will be how to implement their priorities. There was a lot of value in the retreat’s conversation, he said, but the long-term value will be in implementation.

Sheriff Jerry Clayton agreed that there was a lot of heavy lifting to do. He said he walked in to the retreat feeling very cynical – he’d told his staff that he was not just nervous, but actually afraid of what the discussions could mean for the county’s employees. Now, he was less afraid – and he credited Conan Smith for keeping the group on task.

Brian Mackie, the county’s prosecuting attorney, said he was glad to hear the board’s support for staff, but that the next steps – putting dollar figures to their decisions – will be the painful ones, “so it’s important that we have our lovefest today.” He noted that in 2009, commissioners were looking for easy answers, and that’s not an option now.

Staff members who attended the retreat also weighed in. Bill Reynolds, the deputy county administrator, told commissioners that employees “need you to succeed.” Commissioners need to deliver their vision for the county. “We’ll get you there,” he said, but “until we have that, we’re just spinning our wheels and going in circles.” The last thing they want to do, he said, is to deliver a plan that isn’t what the board wants.

Reynolds also noted that the 2009 budget cycle took a toll on employees. It was a real negative impact, he said, adding that his goal is to make sure that doesn’t happen again.

Joanna Bidlack of the county administrative staff observed that there’d been a lot of dissension on the board recently, and that she’d thought it would be hard to actually get commissioners to talk to each other during the retreat. When there’s dissension on the board, she said, it’s extremely painful for staff – it keeps them awake at night. So it was exciting to see the outcome of the retreat, she added, saying it would benefit the organization.

Kelly Belknap, the county’s finance director, told commissioners that employees can have hope when they see the board working together. She urged them to remember this day when times get tough – “because it will get tough.”

Deputy county clerk Jason Brooks said he’ll be able to give a positive report back to his colleagues and county clerk Larry Kestenbaum – unlike the 2009 retreat, when commissioners just “talked a lot.” He also said he appreciated the lunch. [Conan Smith paid for catering from Zingerman's Deli – he said it was not expensed to the county.]

Smith closed the retreat with an exhortation, verging on a cheer: “Keep the positivity – live the mission!”

Present: Commissioners Barbara Levin Bergman, Leah Gunn, Kristin Judge, Alicia Ping, Wes Prater, Yousef Rabhi, Rolland Sizemore Jr., Conan Smith, Dan Smith, Rob Turner. Other elected officials who attended the meeting: Sheriff Jerry Clayton, county prosecuting attorney Brian Mackie and treasurer Catherine McClary. Several county staff members were also present, including deputy administrator Bill Reynolds; Bob Tetens, director of Washtenaw County Parks and Recreation; finance director Kelly Belknap; and Dan Dwyer, trial court administrator.

Absent: Ronnie Peterson

Next retreat: The discussions that began during the Jan. 29 retreat will continue on Wednesday, Feb. 9 at a special meeting following the board’s administrative briefing, which is held to preview the Feb. 16 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]

Sheriff Jerry Clayton, right, talks with Derrick Jackson, director of community engagement for the sheriff's department, before the Feb. 17 county board of commissioners meeting. Behind them are Gene DeRossett, left, chief administrative officer for the 14-A District Court, and Elmer White, who gave an update on the USS Washtenaw exhibit. (Photo by the writer.)

One of the most significant changes was financial. In 2009, overtime hours dropped 36%, leading to nearly $1 million in savings during the year. The department also raised $1 million in new revenues, exceeding Clayton’s projections.

Beyond that, Clayton presented his broad philosophical approach to managing law enforcement in the county, and discussed some of the challenges he faces in light of the current economy.

Law enforcement also came up in a separate discussion during the board’s Wednesday meeting, as commissioner Wes Prater raised concerns over the county’s internal financial controls. Though he’s been agitating for action on this front for several months, his decision to ask the board to form a review committee was prompted by the recent arrest of a county employee charged with embezzling over $100,000.

Commissioners also spent considerable time on Wednesday debating the process of formally revising their priorities. The effort is aimed at adapting the priorities to reflect the county’s diminishing resources. While commissioners agreed that community input was crucial, there was no clear consensus about what the process for gathering that input should be, or how much time it will take.

Finally, the board got a brief update on the Wireless Washtenaw project, a coda to a report given at their Jan. 20 meeting. The firm that’s handling the project, 20/20 Communications, is partnering with Southfield-based Internet 123 and plans to submit a revised business plan for Wireless Washtenaw within 60 days.

Sheriff’s Update

Washtenaw County sheriff Jerry Clayton began his presentation by thanking commissioners for their support during his first year in office. He said it was important to continue to communicate and get feedback about the work of his department. “I believe an educated and engaged community is our best partner,” he said.

He outlined four core strategies that guide the department: 1) providing community leadership, 2) building partnerships and collaborations, 3) focusing on service excellence, and 4) providing internal direction and accountability.

Clayton pointed to 10 specific changes he’d like to make during his first four years in office. If he’s re-elected, he said, there will be an additional 10 “points of change.” He didn’t discuss these initiatives in detail, but presented them for commissioners as part of his overview:

1. Implement an operational service delivery program.
2. Create a Sheriff’s Office Youth Engagement Initiative.
3. Establish an early intervention system.
4. Implement a fiscal management system.
5. Create an employee training and professional development program.
6. Implement inmate behavior management and community policing.
7. Implement a comprehensive and objective employee evaluation program.
8. Implement an inmate population management plan.
9. Conduct a service delivery assessment and survey process.
10. Implement a public performance reporting program.

Before coming into office, Clayton said he knew there’d be challenges in his first year, given the types of change he wanted to implement. Changing the organization’s values takes time, he said. There were also challenges he didn’t anticipate, including those related to the budget. In fact, managing the budget was crucial to ease anxiety among commissioners as well as residents, he said. During his first year in office, making the department more efficient without compromising quality was a key focus.

Metrics and assessment are important tools, Clayton said. It was important to assess the current reality, not simply make assumptions.

Collaboration is another goal, building partnerships throughout the county. Clayton cited a recent agreement with Ypsilanti to take on the city’s dispatch operations. His department’s dispatch was able to absorb the four Ypsilanti dispatchers without going over budget, he said, while helping out the financially strapped city. Another example is the inter-agency collaboration among police chiefs countywide, who meet regularly to work on a range of projects. As a result of this effort, they’ve formed one metro SWAT team, Clayton said, replacing the previous four that were operating in different municipalities. He noted that the University of Michigan, because of its unique needs, still maintains its own SWAT team.

They continue to look for other opportunities to partner, Clayton said – with all units of government throughout the county, with the board of commissioners, and with local human services agencies, among others.

Clayton spoke about the need for fiscal responsibility, especially in the historical context of his department. [He was alluding to tensions between the board and the previous sheriff, Dan Minzey, related to chronic budget overruns.] As part of the county’s overall budget reductions in 2009, the sheriff’s department took a $500,000 cut, he said, and worked to reduce the cost of doing business.

It was clear that overtime costs were a tremendous expense, particularly in corrections. They achieved a 36% reduction of overtime hours, Clayton said – from 71,829 hours in 2008 to 45,862 hours in 2009. In dollars, that’s a drop from $2.478 million in 2008 to $1.512 million in 2009.

Some expenses are out of their control, Clayton noted. For example, his department has more people on military leave than any other department in the county. “I’m proud of that,” he said, but it needs to be recognized as having an impact on the budget.

On the revenue side, the department found ways to increase revenues by nearly $1 million, he said – from $13.433 million in 2008 to $14.42 million in 2009. It was important to look for opportunities to increase revenue, but not on the backs of people’s unfortunate circumstances, he said – it’s a balance. One change resulting in increased revenue was to bring back services that were being contracted out to private vendors – now, those are being handled in-house, he said, at a lower cost.

While money is important, he said, it’s not the mission of his department. In 2010 and beyond, a major goal is to reform the county’s social justice system, working with all stakeholders. The current way of managing the county’s offending population really is the definition of insanity, he said – doing the same thing over and over and expecting different outcomes. The county needs to look at a continuum of services, including factors like housing, education and mental health services on one end as preventive measures, to post-incarceration re-entry programs on the other.

Clayton touched on two other issues in his report: the jail expansion, and the cost model for contracted police services.

The jail expansion will add 112 beds to the facility at Hogback Road, which currently has 332 beds. A new intake center is designed to allow the staff to address some behavior issues more effectively, Clayton said. But staffing levels are still being worked out with the county administration – Clayton expects to bring more information to the board at their March 18 working session, with the goal of bringing a proposal on staffing levels for commissioners to vote on in April.

Some local municipalities contract with the sheriff’s department to provide deputy patrols. On that topic, Clayton said his simple goal was keep the cost high enough so that it doesn’t drive the board of commissioners to eliminate the service because they’re not covering their expenses, while being low enough for local municipalities to afford. Clayton said he plans to bring a proposal to the board by the third quarter of this year. [Current contracts with municipalities run through 2011.]

Commissioner Questions for the Sheriff

Commissioners took turns asking questions and responding to Clayton’s presentation. Many of them also praised his performance during his first year in office. This summary of that dialogue is grouped thematically.

Commissioner Questions: Police Services

Several commissioners had comments and questions related to police services. Barbara Bergman asked what criteria Clayton was looking at to determine cost. She said she’d like to see minutes from the police services committee, to get a better idea of the elements involved.

Clayton told Bergman the committee was charged with looking at the existing model for police services, and at the cost of providing that service. The current model includes all direct costs, some indirect, and none of the overhead. In 2009, the department had focused on identifying direct and indirect costs that are part of the current contract. Clayton said they examined every item that’s associated with providing police services to a community, from business supplies to cruisers, from his position to a clerk. For each item, they asked the question: Is this related to police services, and if so, at what percent? Clayton said the goal is to provide a baseline of information, which they can use to then have a philosophical discussion of the issue.

Mark Ouimet asked about how recent staffing changes for police services had affected neighboring jurisdictions. [He was alluding to the decision by Ypsilanti Township to decrease the number of sheriff patrol deputies that work in the township from 38 to 31, while Scio Township added three deputies, for a total of eight. See Chronicle coverage "County Board OKs Ypsi Twp. Deputy Cuts"]

Clayton said he’s been looking at how deputies are being deployed. In addition to deputies who are contracted to work for specific municipalities, there are 12 deputies that serve the entire county, paid out of the county’s general fund budget. His staff has been tracking where those general fund deputies spend their time, Clayton said. They’re also looking at decisions that those deputies make regarding where they spend their discretionary time – that is, time when they’re not responding to a call for service. If they’re not on a service call, Clayton said, he wants the deputies to be in parts of the county where the sheriff’s department traditionally hasn’t spent much time. Clayton says his commitment coming into office was that the general fund deputies shouldn’t just be focused east of US-23.

Ouimet asked whether there was any issue with one jurisdiction needing more support on a routine basis from general fund deputies than in the past. If so, he said, how was the sheriff’s department dealing with that? Clayton said that for the eastern part of the county, which includes Ypsilanti Township, numbers so far this year were tracking consistently with 2009. They still have enough staff to handle calls without needing additional resources, Clayton said, but they’re forced to be reactive, not proactive. They don’t have the resources to address root causes of crime, and that concerns him.

Commissioner Kristin Judge asked whether there will be a new model for police services in 2012. Saying the current system seems to be broken, she said she’d like to see an entirely new approach.

Clayton agreed that there were better ways to handle countywide law enforcement. He pointed to the example of collaboration in Dexter, Dexter Township and Webster Township around public safety services. But the first thing, he added, was to identify what it costs to provide services. It’s important to come as close as possible to agreeing on that before moving forward, he said.

Commissioner Questions: Sheriff’s Department Overtime

Wes Prater asked for more details regarding the reduction in overtime. Clayton said that in the corrections unit, they looked at staffing levels for each shift, post by post, and tried to determine what was essential. Through that process, they identified three posts that they felt were non-essential, Clayton said, and which had historically been staffed with overtime hours. They eliminated those posts on a trial basis to determine if they’d made the correct assessment, and decided that they had.

Another example is in transport between the jail and courts. They adjusted their staffing levels to better mirror the demands of the courts, Clayton said, and were able to reduce overtime as a result.

Kristin Judge asked how Clayton manages the staffing when some of his personnel go on military leave. Are temporary workers hired? Clayton said that it’s typically managed with overtime, and adjusting staff deployment. Judge clarified that having overtime is a structural aspect of the department’s budget, and asked whether Clayton felt he’d gotten it under control as much as he could. Clayton said his department would continue to challenge their assumptions and make adjustments whenever possible.

Commissioner Questions: Continuum of Sheriff’s Services/Sanctions

Though Sheriff Clayton’s presentation was labeled an “annual report,” Barbara Bergman said she’d like to hear updates from him more regularly. She noted the community will be facing state funding cuts to mental health and substance abuse services, which will affect law enforcement as well. The county’s engagement center, operated by the Washtenaw County Health Organization to handle mental health and substance abuse emergencies, is used as a resource by sheriff’s deputies, Bergman said, but she’d like to see other law enforcement agencies take advantage of it too. Clayton said he felt other agencies would be receptive to using the center, when appropriate.

Jeff Irwin praised Clayton for his professionalism and hands-on approach and for his emphasis on gathering data and metrics to use as a basis for decision-making. He raised the question of recidivism, noting that 70% of people released from jail in the county are returned there within two years. What can the community do, he asked, to make an impact on changing that?

Clayton said it was important to accurately assess the risk of people coming through the criminal justice system, to determine who is really a serious threat to the community. For those who aren’t, there need to be alternatives, such as tethering and work release programs. These need to be programs in which the courts have confidence, he said.

But equally important, Clayton said, was the need to address root causes. Some folks are bad, he said, but a lot of people in jail have other issues – a lack of education, substance abuse or mental health problems. It’s a community issue, Clayton argued, and both ends of the spectrum need to be addressed: human services as well as public safety. Law enforcement officers can be an important partner, he said, working with human service agencies to help people in the community who might otherwise end up in jail. Irwin noted that the program known as JPORT (Justice Project Outreach Team) was an excellent example of that kind of collaboration.

Irwin then brought up the issue of race, noting that two-thirds of the jail population is African-American, while the overall population in the county is less than 20%. He told Clayton he was hoping to hear some “big ideas” about how to address this problem.

Clayton said that, again, it was a challenge for the entire criminal justice system – that kind of disparity was seen throughout the continuum. You start addressing it by having frank conversations, some that make people uncomfortable, he said. They’re uncomfortable for fear of saying the wrong thing and being accused of racism. Is it because African-Americans are more prone to crime? Clayton said he’d argue no. Are socio-economic factors at play? That’s part of it, he said. There are some very tough questions that need to be asked, Clayton said, and it’s a conversation they all need to have at some point.

Conan Smith asked how Clayton was defining success – the rate of recidivism might not be as important, for example, as the actual number of recidivists.

There are ways to lower the recidivism rate, Clayton noted, but that might not achieve the outcomes they want. And the sheriff’s department isn’t the lone player in addressing the problem – that’s why they have to take a systems approach.

In general, Clayton said, it’s challenging to measure police services beyond the traditional metrics of calls for service, response times and types of crime. One thing he’d like to do is to take surveys of residents about their perceptions of safety, and get feedback on the department’s services. It’s just one of many avenues to assess their performance, he said.

Ken Schwartz asked how many inmates are residents of Washtenaw County, and how many live outside the county. He understood on a humanistic level why it was important to provide a continuum of services, but he felt more comfortable investing in residents than out-of-towners. Clayton said he believed most inmates were from this county.

Wes Prater said they hadn’t really mentioned one of the major causes of recidivism – a lack of decent-paying jobs. They need a program to help folks find employment, he said, then the county would see less recidivism.

Commissioner Questions: Central Dispatch

Leah Gunn asked how the new central dispatch operation was proceeding. Clayton reported that there’s been a slight delay in the move to co-locate the county’s dispatch with the city of Ann Arbor, because of a vendor’s delay in installing some equipment. They’re also negotiating a small fee, he said, that the city wants to charge the county, which he said would be offset by revenue from taking over Ypsilanti’s dispatch. The attorneys for Ann Arbor and county are working up a memorandum of understanding, he said. Long-term, Clayton said they’ll see cost savings from this move, which is also laying the foundation for more partnering with the dispatch operations from other jurisdictions.

Internal Financial Controls

Later that evening, during the board meeting, commissioner Wes Prater asked that a motion be added to the agenda to establish a new committee that would review the county’s internal financial control policies. The committee he proposed, of not more than five commissioners, would review all internal financial control policies and report back to the board and administration with findings and recommendations.

Other commissioners seemed surprised by the proposal.

Leah Gunn opposed the move, saying it was her strong belief that overseeing internal financial controls was the responsibility of the county administrator, who also serves as controller. Their audits are always clean, and win awards, she added. [For 18 consecutive years, the county has received a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association.] “Frankly, I don’t see any reason for doing this,” Gunn said.

Conan Smith said he had no objection to such a committee, though he agreed that the county administrator had responsibility for internal controls. He said they’ve talked about the need for more review and it seemed reasonable, given their push for more transparency, coupled with the current budget challenges. He said he’d like to hear from county administrator Bob Guenzel as to what kind of controls are currently in place, and what changes might be needed.

Prater said he believes the county has a systemic problem regarding internal controls. He pointed to the arrest earlier this month of a county employee working in community mental health – part of the Washtenaw County Health Organization – who was charged with embezzling more than $100,000 over the past 16 years. In light of those allegations, he said, they needed to act urgently to protect the dollars of their constituents. He noted that the auditors don’t conduct an audit of internal financial controls, and that the board needs to act to prevent something similar from happening in the future.

Barbara Bergman countered that no amount of review would have uncovered the embezzlement, which she called a “great scam.” Describing Prater’s motion as vague, she also questioned how the proposed committee would conduct its review, and what kind of reports they would make back to the board.

Mark Ouimet, a former banker, clarified with Prater that the term “review” in the motion did not carry the formal meaning of an audit review. He noted that the auditors for the county, Rehmann Robson, do a test on the county’s receivables and payables, but don’t audit internal financial controls. Regarding the embezzlement, Ouimet said he assumed that a forensic accountant had been asked to piece together what had happened, and that the forensic report would reveal any weaknesses in the system that could be changed to prevent future problems.

Ouimet also said they needed to clarify the committee’s role – if the board moves ahead with this approach, they need to be clear about what they want the committee to do.

Jeff Irwin had similar concerns about the committee’s scope. While he didn’t think forming such a committee did any harm, Irwin noted that commissioners already had opportunities to meet with the auditors and raise any questions they might have. He suggested that his colleagues on the board go through the previous years’ management letters from the auditors and see if there are any threads that warrant concern, and to sit down with the county’s financial staff to ascertain how they do their jobs and whether there’s sufficient oversight. He said he hadn’t found internal controls lacking, and he wondered why Prater didn’t pursue these issues himself, without forming a committee.

Prater responded by saying that all last year, he had requested that the county’s financial staff make their budget reports conform with the federal Uniform Budget Act. “It was like pulling chicken’s teeth to finally get it done,” he said. This year, he said, he decided to bring the issue directly to the board. If an employee could get away with embezzling money for so long, he said, then something is wrong with the process. Prater also criticized the administration for not providing any information about the situation. ["Communication within Uniform Budget Act format" is one of the outcomes listed in a set of initiatives that the administration provided to the board earlier this year – .pdf file of those initiatives.]

Ken Schwartz said it seemed that anyone sitting on the committee would need knowledge of financial issues that he wasn’t sure everyone had. He moved to table the motion until the March 3 meeting, asking Prater to return with more details about what exactly the committee would be expected to do. [.pdf file of most recent Comprehensive Annual Financial Report, for 2008.]

Outcome: The motion to table the proposal to establish a committee to look at internal financial controls passed, with dissent from Prater.

The topic came up again at the county board of commissioner’s Thursday evening working session. Guenzel reminded the board that Diane Heidt, the county’s human resources and labor relations director, had briefed commissioners in a closed executive session last year, before the situation was made public. He has asked Heidt and Judy Kramer, the county’s risk management coordinator, to make a written report about the incident, how it occurred and what steps are being taken in its wake.

Guenzel also suggested scheduling a working session to bring in Mark Kettner of Rehmann Robson and county accounting manager Peter Collinson, to review with commissioners the existing internal controls.

Setting Board Priorities

After passing a two-year budget late last year for 2010-2011, commissioners have said that 2010 will be a planning year. They took another step in that direction on Wednesday, with a proposal for a timeline to evaluate and revise priorities for the county. [See the  county's website page with current priorities]

The proposal led to a lengthy discussion about how best to seek input from the community, with some commissioners raising concerns that the initial goal of setting priorities by early May – just before the departure of county administrator Bob Guenzel, who is retiring on May 14 – was too ambitious.

Ken Schwartz began the discussion by passing out a proposed outline for the process of setting priorities. It had been developed by a committee chaired by Schwartz, and including Conan Smith and Kristin Judge. Their hope, Schwartz said, was to marry the ideal and the practical as the board sets priorities that reflect the new economic reality. The loss of revenues and services is a “nasty fact of life today in Michigan,” he said

As they move ahead to solicit commissioner and community input, Schwartz said they also need to include the input of a planning group that’s working with the administration on several major initiatives. [.pdf file of those initiatives] The advisory group includes Guenzel, incoming county administrator Verna McDaniel, several county department heads, water resources commissioner Janis Bobrin (who’s representing the other elected county officials), and Conan Smith (representing the board of commissioners).

Schwartz characterized the timeline as a work in progress, and said he hoped that commissioners could set aside their personal ideologies and be open, flexible, and charitable to each another as they go through this process.

The draft timeline was presented as follows:

• Step 1: Commisioner Input. Create and distribute interest/priorities survey to commissioners. Conduct interviews individually or in small groups with commissioners who choose not do complete a written survey. Desired outcomes are to identify individual priorities and interests, as well as consensus on high-level issues. Target date: Feb. 22 to March 8, 2010.
• Step 2: Community Input. Hold community focus groups in established forums at commissioners’ discretion. Conduct survey on county’s website. Send press release to local media. The desired outcome is to get feedback on specific questions related to board priorities. Target date: March 8 to April 1, 2010.
• Step 3: Data Analysis. Synthesize data from commissioner/community input. Create a leadership alignment document. Have that document reviewed by the administration’s planning group. Target date: April 1-16, 2010.
• Step 4: Board Planning Session. Identify new board priorities. Find consensus on high-level community outcomes. Identify key initiatives associated with those outcomes. Identify 3-5 “true values” to direct and influence the culture and decisions of the organization. To be undertaken at an April 22, 2010 working session.
• Step 5: Board Action. Board adopts priorities by May 5, 2010.

Commissioner Discussion on Priorities

Out of the gate, Ronnie Peterson said he didn’t see how they’d accomplish these goals by May. Employees also need to be a part of the process, he said. Peterson also wanted to make sure the board had a healthy discussion about priorities and the budget with county administrator Bob Guenzel before he retired in mid-May.

Schwartz acknowledged that the timeline was compressed, but said he didn’t anticipate a radical change from the board’s current priorities. Verna McDaniel, the current deputy administrator who’ll be replacing Guenzel, added that they weren’t starting from scratch.

Barbara Bergman cautioned that it was a delicate matter to tell the community how their input would be used. She didn’t want to tell them it would have meaning if it didn’t. She also wanted the board to sign off on any survey that might be used.

Wes Prater also had concerns about how to solicit community input. The county has roughly 325,000 residents, he said, and the district he represented was very different from the districts represented by Bergman and Leah Gunn. [Gunn and Bergman represent two of the four Ann Arbor districts. Prater's district covers the more rural townships of York and Augusta, as well as the city of Milan and parts of Ypsilanti Township.]

Specifically, Prater said many of his constituents don’t know about the county’s website, so it wouldn’t be sufficient to do only an online survey. And the last time they did focus groups – related to law enforcement issues – it was a “real donnybrook,” Prater said, with the same people showing up at each one. Even if surveys are mailed, he said the response rate wouldn’t be high. That meant doing phone surveys, which would take a lot of time and effort to get a meaningful sample.

Jessica Ping noted that many people now don’t have landlines and can only be reached by cell phone – a traditional phone survey wouldn’t likely reach that younger demographic. She also said that many people in her district – which includes six rural townships in southwest Washtenaw – don’t have Internet access, making the online survey difficult. One option, she suggested, is to ask local municipalities to include a written survey when they send out the next tax bill.

Mark Ouimet suggested getting input through other elected officials at the local level, as well as from community groups like chambers of commerce, schools and other organizations. The bigger question for him, he said, is that after they get this input, what will they do with it?

Gunn warned that doing a survey would be expensive, and wondered what kind of budget they had for it. Staff time would also be a factor, she said.

Conan Smith pointed out that this was a representative form of government – each commissioner is responsible for guiding the county in the best way they know how. The process of understanding their district’s priorities might differ, he said. Ultimately, some commissioners might decide they don’t need to go through a process of formal feedback, which Smith said was totally acceptable.

Both Peterson and Gunn raised the issue of the state’s budget, and how the financial crisis in Lansing would negatively impact the county. Saying “brace yourself,” Peterson cautioned that although the board talked about 2010 as a planning year, he felt they’d be dealing with additional budget cuts because of the state, since many county departments receive significant state funding to provide services. Gunn described the state legislature as in “absolute gridlock.” “The whole thing in Lansing is a terrible mess,” she said, and the county will be called upon to provide the final safety net when state services get cut.

Judge went back to the question of the survey, saying she wanted to get a sense of whether the board wanted to move ahead with it. She didn’t want to spend staff time or her own time developing something that wasn’t going to be used. She made a formal motion directing the board to take a survey of residents, but the motion died for lack of a second.

Jeff Irwin said he didn’t support the motion at this point because it felt like they were flying by the seat of their pants. There wasn’t any dispute over the importance of fulsome public input, he said, but it wasn’t clear how best to do that, and at what cost.

Judge again asked the board for direction regarding the survey, saying they needed to give guidance on whether they wanted to pursue it. Smith recommended that he, Judge and Schwartz meet and revise the proposed process, based on the feedback they’d heard. Schwartz noted that the timeline wasn’t set in stone: “I was just trying to avoid the election season, when things get crazy.”

Outcome: Peterson moved that the proposal be sent back to committee for revision – the motion was unanimously supported.

Wireless Washtenaw

At the board’s Jan. 20 meeting, James McFarlane, who manages the county’s information technology unit, briefed commissioners on Wireless Washtenaw, an effort to bring wireless Internet service to the entire county. He returned on Wednesday to answer a question they’d posed: What would happen if the county pulled the plug on this project?

The county has a contract with 20/20 Communications of Ann Arbor to provide the service, but the business has struggled to get financing since the deal was signed in 2006. At this point, limited service is provided in Ann Arbor, Saline and Manchester, as well as Scio and Sylvan townships. In January, McFarlane told commissioners that about 1,000 residents use the free service, and there are 540 paid subscribers.

If the county pulled out of the project, 20/20 would remove its equipment from a water tower in Manchester and from several nodes in Ann Arbor, McFarlane said, and users in those areas wouldn’t receive service.

McFarlane reported that 20/20 has recently partnered with a Southfield firm, Internet 123, and hopes to submit to the county a revised business plan for Wireless Washtenaw within the next 60 days. Also, 20/20 is still awaiting word on whether it will be awarded $4.2 million in stimulus funds that the business has applied for. McFarlane said the new partnership with Internet 123 would provide the resources to move forward on the project even without the federal funding.

Commissioner Jessica Ping said it seemed to make sense to wait until the county sees the new business plan before making a decision on the fate of Wireless Washtenaw. McFarlane agreed, adding that the decision regarding federal stimulus funds would also be a reason to wait.

Public Commentary

Two people spoke during public commentary on Wednesday.

Thomas Partridge began by objecting to the requirement that speakers give their address before addressing the board, saying that it posed a risk in this age of Internet attacks. He called on the board to send a letter to President Barack Obama, urging him to renew his pledge to the platform on which he campaigned – a progressive platform based on Midwestern values. As Obama comes to Ann Arbor to deliver the University of Michigan commencement address on May 1, Partridge said he hopes the president will keep in mind his predecessors John F. Kennedy and Lyndon B. Johnson. Partridge noted that when Johnson delivered a commencement  address at UM in 1964, he laid out his plans for the Great Society programs that later were a hallmark of his administration.

Elmer White gave an update on fundraising efforts to build a museum-quality display for artifacts of the USS Washtenaw, the most decorated warship of the Vietnam War. He said he was happy to report that over the past weekend they’d met their financial goals. “I thought it was going to be difficult, but people came to us.” He thanked commissioners for their support. The display will be installed in the lobby of the county building at 200 N. Main St.

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

Next board meeting: The next regular meeting is Wednesday, March 3, 2010 at 6:30 p.m. at the County Administration Building, 220 N. Main St. The Ways & Means Committee meets first, followed immediately by the regular board meeting. [confirm date] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public comment sessions are held at the beginning and end of each meeting.

Once inside the Wheeler Service Center on Stone School Road, it was easy to find the city council retreat location.

At its budget retreat held on Saturday at the Wheeler Service Center, city council set out its priorities for the coming year: land use policy (i.e., zoning), economic sustainability, plus improved communication and service delivery.

This, after getting a picture of where the city stands from the city administrator, Roger Fraser, and his key staff: unless expenditures are reduced or else revenues increased, the city will experience a shortfall of revenue against expenditures starting in fiscal year 2010. Staff also outlined some significant projects that the public will start to see implemented or else be expected to help shape in the coming year. Those include increased use of web technologies (e.g., Facebook), more zoning revisions, possible dam removal, and regional coordination of safety services.

Fraser also offered conceptual drawings of a conference center that could be built on top of the proposed Fifth Avenue underground parking garage, and floated the idea of constructing a roof over Fourth Avenue for a bus station to replace the Blake Transit Center. The retreat took place in a workroom outfitted with one of 11 plasma screens that had recently caught the attention of an auditor, because they had been purchased in a manner inconsistent with city guidelines on credit card use.

From left to right: Councilmembers Leigh Greden, Sandi Smith, Carsten Hohnke, Sabra Briere. They are looking at an aerial image of the Fourth Avenue section north of William Street, which city administrator Roger Fraser floated as a possible location for a Blake Transit Center replacement. The concept would be to leave the street open to traffic, but to build a roof over it.

The possible budget shortfalls were quantified as follows: shortfalls of $2.07 million in FY 2010 and $5.41 million on budgets of $87.02 million and $87.59 million, respectively. Key assumptions in these projections are that there will be a 1.25% reduction in tax revenues starting in 2010, followed by a reduction in 2011 by 5.2%. Projections also factor in a 2.5% increase in pension fund contributions for 2010, followed by a 36.6% increase in 2011.

The financial state of the city was characterized by Fraser as influenced by three key factors:

• The city’s property tax revenues are declining due to lower assessed values, Pfizer’s departure, and less new construction.
• Flat state shared revenue, with risk for decline.
• Investment losses in the pension fund may increase the city’s required future contribution.

The challenging picture painted by Fraser was reflected in priorities the council identified for the coming year. One of the top three was economic sustainability, which includes the exploration and thorough study of a city income tax and focus on an economic development strategy. Championing the study of the income tax question was councilmember Leigh Greden, though almost every time the words “city income tax” were spoken, John Hieftje, mayor of the city of Ann Arbor, stressed that he was not favorably inclined towards the idea.

Another priority was to finish what’s already been started in terms of rezoning and master planning of the city, partly because this was seen as related to the question of economic sustainability: One reason that property tax revenues are projected not to keep pace with expenditures is that there’s less activity on the new construction front. One of the initiatives in the area of land use and zoning expected to go forward in the coming year is the A2D2 process (zoning for downtown Ann Arbor). That project has been returned to the planning commission for possible revision in light of feedback from the public.

Jayne Miller, city of Ann Arbor director of community services, said the city was maximizing the proportion of the new combined parks millage dedicated to maintenance.

Improved communication and service delivery rounded out the top three priorities for council. Included in this focus is improved communication about service delivery. Councilmember Margie Teall reported that she was surprised (in a pleasant way) to discover the updates on snowplowing activity available over the web, as well as the availability of emailed updates on a range of topics. It was reported that over 7,000 people have registered for the email update service so far.

Communication was a theme that ran through much of the material presented by staff – in particular, communication in the form of web technologies. Jayne Miller, community services area director, indicated that parks and recreation programs would be exploring the use of social networking (like Facebook and Twitter) to help publicize their activities.

Sue McCormick, public services area director, advised councilmembers that online bill payment for utilities was expected to be available for the first quarter of 2009, along with a printed bill opt-out possibility. That is, if you’d like to pay your water bill online and never receive a printed bill in the mail, you’ll be able to do that. By the end of 2009, city residents might be able to get help from the city’s website using live chat.

Tom Crawford, chief financial officer for the city of Ann Arbor, said that five-year projections were difficult to make. He preferred to stick with 2-year forecasts.

The city’s data center, which serves the city’s web needs, is an example of another theme that ran through staff presentations: cooperation across different organizations. Tom Crawford, Ann Arbor’s chief financial officer, explained that the city’s data center would become a joint endeavor with Washtenaw County, which would help reduce capital investments when the center is moved into the new courts-police facility.

Further, there would an ongoing revenue stream from the county for utilities and rent of the data center. Among the other organizations the data center serves, Crawford mentioned the Ann Arbor District Library and the Ann Arbor Transportation Authority. With respect to the AATA, their web hosting up to now has been provided by IAS, which has been challenged recently by eviction from their offices. The switch to the city data center could be made as soon as Monday, Jan. 12, which could restore the mobile RideTrak system (real time bus information), which has been out of service since the IAS eviction.

Other examples of regional cooperation came from Barnett Jones, chief of safety services, who described a functional fire service district to be formed using Ann Arbor fire stations No. 4 and No. 6 with Ypsilanti’s fire station No. 1 to facilitate coordinated response on Ann Arbor’s east side. He also described talks with Pittsfield Township about combining stations. This idea was met with great skepticism from councilmember Marcia Higgins, in whose ward the change would be implemented. She cited the traffic from home football games as a challenge to be met by combining stations.

Left is city administrator Roger Fraser with city councilmember Christopher Taylor. They're looking at conceptual drawings for a possible conference center on top of the underground parking garage to be built at the library lot between Fifth and Division streets.

Traffic formed the basis of another example of cross-organizational cooperation: the north-south transit connector study, which is being funded jointly by the city of Ann Arbor, the Downtown Development Authority, the University of Michigan, and the Ann Arbor Transportation Authority. The proportion to be contributed by each partner is currently being hammered out, with Mayor Hieftje arguing for an increased share to be paid for by UM, because (i) the greater part of such a system’s benefit would go to UM, and (ii) the city of Ann Arbor and the DDA should be thought of as a single entity.

The AATA also came up in the context of Fraser’s announcement of two ideas he floated to councilmembers for their consideration, just before they broke into groups to thrash through their priorities for the year. The first of these ideas involved the AATA’s Blake Transit Center, located between Fourth and Fifth avenues, just north of the old YMCA lot. The BTC facility, Fraser said, needs either significant investment in its renovation or new construction. Fraser’s depiction is consistent with discussions on the AATA board’s planning and development committee, which is expecting an AATA staff presentation on the topic. From the minutes of its Dec. 16 meeting:

Dawn Gabay [interim executive director of AATA] reported that at the next committee meeting staff will make a presentation on possible renovations to the Blake Transit Center. Staff has been engaged in discussions with representatives from the City, the DDA, the Ann Arbor Library and the Ann Arbor Chamber of Commerce about redevelopment plans of the entire area surrounding the BTC.

The idea Fraser asked council to think about involved using the public right-of-way on Fourth Avenue, just north of William Street, as a new transit center. The street would remain open to traffic, but a roof would be constructed over the street. Jesse Bernstein, president of the Ann Arbor Area Chamber of Commerce and an AATA board member, was at the budget retreat on Saturday and offered his view that the current hub-and-spoke route system should be scrapped in favor of a spine-and-rib spine-and-nerve model. [The AATA recently conducted a study on the question, concluding that the hub-and-spoke model best served its mission.]

The second idea Fraser asked council to reflect on is one also associated by many community members with Bernstein: the idea of a downtown conference center. Holding a large manila envelope, Fraser said that he had conceptual drawings that had been developed by someone interested in seeing the parcel developed – it would sit on top of the proposed Fifth Avenue underground parking garage. He said he had permission from the proposer to show councilmembers the conceptual drawings. For The Chronicle, Fraser declined to identify the parties who had conveyed the drawings beyond saying that it was a developer in New York who had local ties. He said if the idea received traction on council, then the developer might be inclined to disseminate the drawings more widely.

Other key initiatives that Chronicle readers should expect to see take center stage in the coming months include public participation on the question of what should happen with Argo Dam, and public participation on the question of area, height, and placement zoning in the area outside the downtown.

Coda: Plasma Screens and P-Cards, Use of Public Funds

The budget retreat took place in a workroom at the Wheeler Service Center. The room was outfitted with a TV screen mounted in the corner of the room near the ceiling. [There's a photograph included in this story that depicts it.] No use was made of this technology during council’s retreat – councilmembers’ priority-setting task was completed using markers and large sheets of paper.

Ann Arbor City Council budget retreat. In corner of the room just below the ceiling is one of the plasma screens that was the subject of recent scrutiny by an auditor, followed up by Tom Crawford, the city's chief financial officer. The screens are used for information sharing at the beginning and ending of the work day, and to deliver training materials.

The screen, however, had received scrutiny earlier in the week by several councilmembers as part of their service on council’s audit committee. On Thursday evening, councilmembers Carsten Hohnke, Christopher Taylor, Stephen Rapundalo, Sabra Briere, and Mike Anglin, along with Roger Fraser, Sue McCormick, and Tom Crawford, met in the fifth floor conference room of the Larcom building for a supplemental committee meeting. The meeting focused exclusively on the topic of the purchase of 11 plasma screens for use at the Wheeler Service Center. Total cost for the screens was $16,252.98.

The purchase of seven of the screens had caught the attention of an outside auditor, because the three separate purchases had been made within minutes of each other using different city credit cards (P-cards). Each of the resulting three purchases was below $3,000, which is a threshold important for credit card use. The relevant city policies are outlined in a report on the audit from Crawford to councilmembers:

Purchasing policy #208 calls for the following:

• All purchases over $3,000 require the issuance of a purchase order and the approval of the Service Area Administrator.
• For “sole source” purchases, written documentation that a specified item cannot be obtained from any other source must be submitted.
• Purchases over $10,000 require living wage and civil rights certifications.

Credit card policy #512 calls for the following:

• Applicable requirements of policy #208 must be followed.
• Purchases must not be split to circumvent procurement procedures

Based on email correspondence, neither audit committee members nor other non-committee members of council were entirely content with the initial analysis and reaction by Crawford and staff. Rapundalo wrote:

I still am quite stunned by the overall incident and the temerity of those who violated known procedures, especially a new process that had just been instituted in the months leading up to the violation.

…

Furthermore, I believe that staff at the Wheeler Center should be apprised of the Audit Committee and Council’s concerns/actions over this procedural breach and insure their understanding of why screens are being relocated and privileges revoked.

The mood at Thursday’s audit committee meeting could fairly be described as somber. At that meeting, Rapundalo wanted to hear exactly how the city went from a building that was equipped with the wiring as a design specification, and constructed with such wiring, to a decision to purchase hardware. McCormick explained that decisions like these would typically be “discharged” to the staff.

Fraser gave the dimensions of the screens as ranging from 32 to 40 inches, “relatively small,” he said. This description was met with immediate objection from Briere and Rapundalo: “That’s not small!”

By the audit committee meeting’s conclusion, councilmembers seemed content that the matter had been adequately addressed. The key fact, for Rapundalo at least, seemed to be the revelation that a crucial piece of information had been miscommunicated: the funds used for purchase of the screens did not come from the Wheeler Service Center construction account, but rather from an operations account. Earlier, Crawford had mistakenly said that the funds had come from the Wheeler Center’s construction account.

Left to right: Sandi Smith and Sabra Briere (speaking).

Roger Fraser sorts through the priority lists delivered by councilmembers' three break-out groups. Goal: identify commonalities among the groups' top five priorities.

Tom Crawford and Sue McCormick. In addition to a pencil, Crawford also owns an iPhone.

Safety services chief Barnett Jones included an update on crime over the last year: an uptick in larcenies, which he said was a national trend due to the poor economy. Factoid revealed at the meeting: Jones has delivered seven babies in the course of his career.

Sue McCormick, public services area director, talked about piloting "zonal" service delivery: a single crew dispatched to an area might be able to address multiple problems (tree trimming, pothole patching, sign maintenance).

Roger Fraser presented this slide, which was presented in 2002, with the final column, Phase IV, (highlighted with a cloud) corresponding to what is now the current time, 2009. It prompted lighthearted commentary from council to the effect that it's a good thing the city's new graffiti ordinance has not yet formally passed.

Roger Fraser wearing a bar-chart pattern.