The grant from the Michigan Dept. of Corrections is for the period from Oct. 1, 2014 through Sept. 30, 2015. This is part of a regular, annual grant process to fund services that include diversion and alternative sentencing options to the Washtenaw County Trial Court, pre-trial services, drug testing, electronic monitoring and “social education,” according to a staff memo. The total program of $1.18 million also includes $240,983 in county matching funds, $280,584 in estimated program revenue, and $239,554 in the use of fund balance. The community corrections program is part of the county sheriff’s office. [.pdf of staff memo] [.pdf of grant application]

This year’s program includes a new position – with a salary range between $31,912 and $43,674 – to help supervise a substantial increase in use of electronic monitoring by all Washtenaw County courts, for pretrial and sentenced offenders as an alternative to jail. According to the staff memo, the use of electronic monitoring increased 256% over the previous fiscal year. Average electronic monitoring cases for FY 2012-13 were between 25-30 at any given time, and increased to between 85-115 cases in FY 2013-14. Increased revenue from the electronic monitoring program and use of fund balance will be used to fund the increase in staffing.

The grant was submitted to the state in May.

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

For 2016 and 2017, the police services unit (PSU) price will be  $156,709 and  $158,276, respectively. An initial vote had been taken on April 2, 2014.

By way of background, on July 6, 2011, commissioners had authorized the price that municipalities would pay for a contract sheriff’s deputy through 2015. The price in 2012 – $150,594 per “police services unit” – was unchanged from 2011, but has been rising in subsequent years by about 1% annually. The complex, politically-charged process of arriving at those figures in 2011 involved more than a year of discussion between the sheriff’s office, other county officials and leaders of local municipalities that contract for these services.

The board’s decision in 2011 was based on a recommendation from the police services steering committee. That same group recommended the next pricing changes as well, based on the cost of a police services unit (PSU). The PSU price for 2014 is $153,621. For 2015, the PSU price will be $155,157. In the following two years, the PSU price was proposed to be $156,709 in 2016 and $158,276 in 2017. The pricing for those two years was authorized by the board in its April 16 action.

Those figures are based on a 1% annual increase in direct costs to contracting municipalities. That rate of increase for PSUs is included in revenue projections for the county’s four-year budget, which the county board passed at its Nov. 20, 2013 meeting. The budget runs from 2014-2017, and includes revenue projections based on contracts for 79 PSUs.

According to a staff memo, there will be an addition to the 2016 and 2017 prices for in-car printer replacement, after the total cost of ownership is determined. The memo also notes that the pricing is based on salaries stipulated in current union contracts with the Police Officers Association of Michigan (POAM) and the Command Officers Association of Michigan (COAM). Those contracts run through 2014, and new contracts are currently being negotiated. The memo states that ”no assumptions were made for salaries or fringes change in this cost metric in anticipation of any union negotiations.” [.pdf of staff memo]

The county – through the sheriff’s office budget – pays for the difference between the price charged for each PSU, and the actual cost to provide those services. In 2011, that difference was $25,514.

In 2016, the cost per PSU is expected to be $195,104 – a difference of $38,395 compared to the price being charged to municipalities. In 2017, the cost per PSU is estimated at $199,188 – a difference of $40,912. [.pdf of cost estimates]

Discussion during the April 2 meeting included concerns by some commissioners about the financial sustainability of this approach to funding police services, and the need for new revenue sources for public safety. Sheriff Jerry Clayton was on hand to present the pricing proposal, and supported suggestions to seek new funding for public safety. As he’s done in the past, Clayton characterized the issue of public safety as one that encompasses economic development, human services and other aspects of the community.

There was no discussion on this item during the April 16 meeting.

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

The state grants are intended to support creative approaches in the court system. The Peacemaking Court is described in a staff memo:

Like tribal peacemaking programs and restorative justice programs, the Peacemaking Court will provide a great benefit to youth and the community in juvenile cases by reducing recidivism and giving youth a diversionary option to avoid a record that can preclude future educational and employment opportunities. Domestic relations and other family cases will benefit from more durable and tailored solutions that result from a clearer understanding of the different perspectives or “truths” of all those involved. This, in turn, will enable the healing of important relationships, in contrast to the harm and polarization that too often results for families through the adversarial process.

The Peacemaking Court will allow the parties and those most affected by the conflict to talk about the event, its impact on them, and to look at the whole conflict in a comprehensive context that leads to understanding and meaningful solutions that address the needs of all those involved. When participants are respected and the individuals responsible for causing the problem are part of the decision process and take responsibility for their actions in a meaningful way, the resolutions are more comprehensive and address the needs of everyone involved, as well as the issues that underlie the problem. An important difference between the traditional system and the peacemaking court process is that the resolution is determined WITH the court not BY the court.

According to the grant application, key members involved in this project are 22nd Circuit Court judge Timothy Connors, 14A District Court judge Cedric Simpson, project director Susan Butterwick, and Robert Carbeck, 22nd Circuit Court deputy court administrator and budget director. [.pdf of grant application] Connors, who has spearheaded this initiative, was on hand at the Dec. 4 meeting to describe the project and answer questions.

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

From left: Washtenaw County commissioners Yousef Rabhi (D-District 8), Andy LaBarre (D-District 7) and Ronnie Peterson (D-District 6). (Photos by the writer.)

Following about three hours of debate and some minor amendments, commissioners gave initial approval to the proposed four-year general fund budget, for the years 2014-2017. The 7-2 vote came over the dissent of Dan Smith (R-District 2) and Ronnie Peterson (D-District 6), who cited concerns over a budget cycle extending for four years rather than two.

Much of the budget discussion focused on the sheriff’s operations. No layoffs are proposed, but 8.47 FTE positions would be kept unfilled. Most of those are in the sheriff’s office, which has a targeted budget reduction of $1.34 million. Sheriff Jerry Clayton, an elected official, attended the Nov. 6 meeting and addressed the board, telling commissioners that his office can’t continue to absorb budget cuts without affecting services. “For me not to tell you what I believe the impact on public safety is, if you make those cuts, would be negligent in my responsibility as the county sheriff.”

Board chair Yousef Rabhi (D-District 8) countered that every department head could make arguments against budget cuts. Noting that more revenues are needed, Rabhi said he hoped commissioners would support putting a countywide public safety millage on the ballot.

During public commentary after the budget debate, county prosecuting attorney Brian Mackie told commissioners that they had a difficult job, but that they were making it harder than it needed to be. He suggested looking for guidance in the state constitution, and relying on the experience of county administrator Verna McDaniel. Mackie also questioned whether commissioners were truly committed to public safety as a priority. He praised Clayton, noting that the sheriff is a respected figure with a national reputation. “He might know more about safety and criminal justice than you do,” Mackie said.

The budget must be given final approval by the end of the year, and only two more board meetings scheduled: On Nov. 20 and Dec. 4. The board will also hold a second public hearing on the budget on Nov. 20.

Several other agenda items related directly or indirectly to the county’s budget. On a 7-1 vote, the board gave final approval to an increase in the levy of the economic development and agricultural tax, known as Act 88 of 1913. The increase to the Act 88 millage is from 0.06 mills to 0.07 mills. Dan Smith (R-District 2) dissented and Rolland Sizemore Jr. (D-District 5) had left the meeting by the time the vote occurred, just after midnight. Smith questioned the constitutionality of the county levying this tax, as well as the legality of how the revenues are spent.

During public commentary, the board also heard from two people who objected to the tax levy, including Bill McMaster of Taxpayers United. McMaster, who helped lead the statewide campaign that resulted in passage of the Headlee Amendment in 1978, noted during public commentary that there’s a provision in the law allowing for legal action if taxes are raised without voter approval. It’s an action “which we will pursue,” he said.

The board also unanimously approved a tax-sharing agreement to allow a portion of county taxes to be captured by Pittsfield Township’s State Street corridor improvement authority (CIA). Pittsfield Township supervisor Mandy Grewal addressed commissioners during public commentary, thanking them for their support of the CIA. One opponent to the CIA – former township official Christina Lirones – spoke during two opportunities for public commentary, urging the board to opt out of the CIA.

Other items handled during the Nov. 6 meeting included (1) final approval to extend the coordinated funding approach for human services, as well as to authorize some changes in that funding model; (2) appointment of an advisory committee to propose options for county property on Platt Road; (3) final approval of a brownfield plan for Chelsea Milling Co. (Jiffy Mix); and (4) appointment of Ellen Rabinowitz as temporary health officer to replace Dick Fleece, who’s retiring at the end of 2013.

Communications during the meeting included public commentary from supporters of the Delonis Center homeless shelter in Ann Arbor, and concerns about state standards for permissible levels of 1,4-dioxane.

2014-2017 County Budget

The proposed four-year general fund budget, for the years 2014-2017, was on the agenda for initial approval.

County administrator Verna McDaniel had presented the budget to the board on Oct. 2, 2013. The $103,005,127 million budget for 2014 – which represents a slight decrease from the 2013 expenditures of $103,218,903 – includes putting a net total of 8.47 full-time-equivalent jobs on “hold vacant” status, as well as the net reduction of a 0.3 FTE position. The recommended budgets for the following years are $103,977,306 in 2015, $105,052,579 in 2016, and $106,590,681 in 2017. The budgets are based on an estimated 1% annual increase in property tax revenues. [.pdf of draft budget summary]

Most of the 8.47 FTEs that are proposed to be kept unfilled are in the sheriff’s office. Sheriff Jerry Clayton attended the Nov. 6 meeting and addressed the board, telling commissioners that his office can’t continue to absorb budget cuts without affecting services.

Aside from discussing the sheriff’s concerns, much of the board’s discussion focused on the issue of a four-year budget, which is being proposed for the first time as a way to improve long-term planning and stability. Ronnie Peterson in particular objected strongly to that approach, and prefers to maintain the current two-year budget process.

A public hearing was held on Oct. 15, 2013 but it was held after midnight and no one spoke. In a separate resolution on Nov. 6, the board set a second budget hearing for Nov. 20.

2014-2017 County Budget: Initial Public Commentary

During the first opportunity for public commentary, Doug Smith told commissioners that he’d asked them about a month ago to pass a resolution stating that no vacant county position would be filled until Jan. 1, 2014 unless approved by the board. Commissioners haven’t passed such a resolution, he noted. His suggestion was made so that the county would save money in the already-underfunded retirement accounts, Smith said. Every employee added to the current defined benefit pension plan will cost the county money for about 30 years, he noted.

In January 2014, Smith said, he plans to submit a Freedom of Information Act request to find out how many employees have been hired in the last quarter of 2013. He then plans to calculate the money that’s been wasted, and post that information on the Washtenaw Watchdogs website, for all constituents to see. The website has had more than 100,000 visits in its first four months, he said, and some of the most popular posts are ones about the county board wasting taxpayers’ money. He again urged commissioners to reconsider hiring anyone until the county’s defined contribution plan takes effect on Jan. 1.

2014-2017 County Budget: Board Discussion – Four-Year Budget

Conan Smith (D-District 9) began by saying he’s been getting a “full-court press” from the board leadership about the four-year budget, and he’s had some really intriguing conversations about it. He said he’s not been supportive of a four-year budget because the board hadn’t developed community impacts and outcomes to guide their budget decisions. The transition from an investment in activities to an investment in outcomes is the right direction, he said, and it needs to be clearly articulated with an achievable set of metrics.

Conan Smith (D-District 9).

The board doesn’t have a process by tradition or policy for continual engagement in the budget, he noted, so without having that process in place, he said, a four-year budget compromises future boards and doesn’t help achieve the community outcomes. So Smith wanted to see language about that community outcomes process in the budget document, to ensure that future boards will have clearly articulated ways for engaging in the county’s investment strategy.

Smith noted that it’s a long process to engage the county’s staff in implementing the board’s desired outcomes. He indicated he’s been criticized for wanting everything to happen right away, “which is absolutely true.” But he acknowledged that it might not be possible or healthy for the organization to implement this process quickly. A longer-term budget process would offer stability and predictability, and working on these other issues in a more incremental way might be less threatening and more palatable to staff who provide services to residents and who need to be engaged in the strategic planning process, which takes a lot of emotional and intellectual energy, he said.

In that context, C. Smith said he was being persuaded about the value of a longer-term budget.

Ronnie Peterson (D-District 6) noted that setting the budget is the most important job of the board, and he apologized to people who were attending the meeting for other reasons if he took more time talking about it. He agreed with C. Smith about concerns over the four-year budget, saying that he thought Washtenaw County would be the only one in the country to have such a long-term budget. The board had been surprised about the cost of the pension and retiree health care liabilities earlier this year, he said. He wondered what would happen to the four-year budget if they discovered there was additional debt that they don’t know about yet. [For background on the retiree liability issue, see Chronicle coverage: "County to Push Back Vote on Bond Proposal."]

Peterson noted that the county’s equalization office had reported that it’s not possible to know what the revenues are until several months into each year. So the county is spending money before it knows how much there is to spend, he said. The board has made some major changes over the years during the economic downturn, he noted, and they’ve asked employees to take unpaid furlough days to help cut costs. That was unprecedented, he said. He was concerned that potential furlough days were part of the proposed budget.

County administrator Verna McDaniel clarified that the furlough days remain in the previously approved labor contracts, but the proposed budget does not assume that those furlough days will be used.

Peterson also noted that revenues from Act 88 and the veterans relief millage are included in each of the four years of the budget. Those millages have to be approved by the board each year, he said, so he didn’t know how it was possible to base the budget on that. If any new board decides not to support those millages, it would impact the budget. He indicated that programs and services that are supported by those millages should be funded through general fund revenues.

Regarding the sheriff’s budget, Peterson asked for clarification about the labor contracts that are currently being negotiated. He also wondered about the contracts with local municipalities that pay the sheriff’s office for deputy services, and how the four-year budget would be affected by that.

McDaniel reported that the contracts with townships for sheriff deputies are part of the budget, under the revenue line item for fees. Those contracts bring in about $12 million in revenue annually, she said.

For the labor agreements, McDaniel said the current contracts for the Police Officers Association of Michigan union (POAM) expire at the end of 2014. The contracts for the Command Officers Association of Michigan union (COAM) expire at the end of 2015. Peterson wondered how the budget can account for the labor costs in the county’s contracts with the townships, if the labor agreements for POAM and COAM haven’t been settled. McDaniel said the labor costs have been projected, based on salary estimates and trends for fringe benefits. There’s been a 1% annual increase through 2016 calculated into the agreements with local municipalities who contract for sheriff deputy services.

Ronnie Peterson (D-District 6).

Peterson wondered what would happen if those labor costs increase by more than 1%. McDaniel said that a police services steering committee, which includes representatives from the contracting municipalities, discusses this issue. The committee’s projections are aligned with the county’s budget projections, she said. Peterson was concerned that the amount could increase, and he cautioned that local communities might not have the budget flexibility to absorb the increases. There’s a lot of uncertainty over what the costs will be, he said, but he’s sure the increases would be higher than 1%.

Peterson then asked about what the county’s potential loss would be if voters don’t approve a replacement to the personal property tax next year. McDaniel acknowledged some uncertainty from the state on this issue, so that’s something to monitor. Budget projections include personal property tax revenue of $5.5 million in 2014, although there’s some uncertainty beyond that, because the tax will be phased out through 2022. As part of that change, a statewide voter referendum is slated for August 2014 to ask voters to authorize replacement funds from other state revenue sources. It’s unclear what will happen if that voter referendum fails.

McDaniel also said the budget assumes that the state will maintain the incentive program that replaced state-revenue sharing, for $5.5 million annually. This approach requires the county to meet certain state requirements. Under the previous state revenue-sharing approach, the county received about $6.8 million annually.

Peterson argued that there was too much uncertainty in a four-year budget, because it was too difficult to project how much revenue the county would receive. He was concerned about the amount of unfunded retiree liabilities. Commissioners are only elected to two-year terms – and that’s another factor, he said.

Andy LaBarre (D-District 7) said he took Peterson’s concerns seriously, saying that Peterson has a track record of fighting for his constituents and all residents of the county. LaBarre also agreed with C. Smith’s call to make the budget focused on outcomes – that’s critical. Being pro-active is one of the reasons why he ran for office, LaBarre said.

For the last six years, the county was forced to steer from iceberg to iceberg, LaBarre said, “and we hit each one.” He worries that the two-year budget process doesn’t provide enough time to plan for things that come up, anything from large economic forces to changes in state policy. He said he was excited to try something new, to set a four-year course. Each year, the board would meet its constitutional requirement to approve the next year’s budget and make adjustments – that provides a safety valve for the four-year budget framework. It’s not perfect, but it’s a step in the right direction, he said. The four-year budget helps focus on outcomes, not just spending money.

Yousef Rabhi (D-District 8) responded to some of the previous comments. He was excited about changes that will allow for fiscal stability and staff security, resulting in programs and services that residents can count on. “It’s an opportunity to revolutionize the way county government is done,” he said. He wants the board to be engaged in the budget every year, calling it a “living document.” It’s important that commissioners develop a calendar of events for each year of the four-year budget, he said, focusing on board priorities and community outcomes. He offered to work with administration to build that into the budget resolution.

From left: Corporation counsel Curtis Hedger, board chair Yousef Rabhi (D-District 8), and Felicia Brabec (D-District 4), chair of the board’s ways & means committee.

Rabhi also pointed out that commissioners are part-time, and they need additional support staff to help them focus on these community outcomes. They can’t do it alone.

Already, the board has to adjust the budget every year based on the outcome of the equalization report, Rabhi noted. Why not have a process in place so that the board is better engaged in that process? He believed a four-year budget can be transformative. Washtenaw County government and residents believe in innovation and in being cutting edge. “That’s what this four-year budget is all about,” he said. Rabhi alluded to an interview he’d recently heard with California governor Jerry Brown, who said that society is like an organism with a certain kind of DNA. Washtenaw County needs to build the DNA for change to happen – that’s the potential that a four-year budget represents, he said.

Conan Smith referred to Peterson’s remarks about the uncertainty of Act 88 and veterans relief millages, and advocated to see whether the staff who are currently supported by those millage revenues could be funded through other sources instead. He wasn’t sure it was possible, but he wanted to look into it. The current approach puts undue stress on staff, he said.

C. Smith added that he hadn’t anticipated voting on the budget that night, but he had some issues he wanted to bring forward for discussion.

Dan Smith (R-District 2) also expressed concerns about a four-year budget. His preference is to adopt a two-year budget, then call the next two years a proposal or projection. He was interested in hearing C. Smith’s ideas for being more actively engaged in the budget process, although he didn’t support making dramatic changes to the budget after it’s adopted. If the budget is not relatively stable, he noted, there’s no point in doing longer-term budgets.

2014-2017 County Budget: Board Discussion – Amendment (Employees Per Capita)

The budget document, in a section on financial trends, included an indicator of employees per capita. C. Smith noted that the document indicates that the trend is positive if there are fewer employees per capita. “I don’t believe that that’s necessarily the case,” he said. In delivering services to residents, having fewer people to do that doesn’t make sense, he said. This data has been in the budget document for years, he noted, but it doesn’t relate to the way the county does business. The administration has indicated that this indicator not used to determine staffing levels. He wanted to see it removed from the budget book, and he made a motion to do that.

County administrator Verna McDaniel said it’s one of many trends that’s recommended by the International City/County Management Association (ICMA), but only if an organization finds it useful. She said that C. Smith was correct – the administration doesn’t use it to determine staffing levels.

C. Smith said that including it sends the wrong message to the community.

Outcome: Commissioners unanimously voted to remove the employees-per-capita section from the budget document.

2014-2017 County Budget: Board Discussion – Amendment (Organizational Survey)

C. Smith noted that the county previously used an organizational capabilities survey to gauge employee attitudes. The survey was perviously done every two years, but for budgetary reasons it hasn’t been done since 2008. He called it a fantastic tool that wasn’t too expensive to implement – between $10,000 and $50,000 each year.

Kelly Belknap, the county’s finance director, indicated the cost had been about $50,000 for the first year, and about $35,000 each time after that. She wasn’t sure how much work it would take to restart the survey, or what the current costs would be.

C. Smith thought it was a manageable amount, and he wanted to add a line in the budget document that stated the county would do these surveys again. After some additional back-and-forth with administration, he suggested waiting until the Nov. 20 meeting to figure out how this might be incorporated into the budget.

Outcome: No formal action was taken on this proposal.

2014-2017 County Budget: Board Discussion – Amendment (Affordable Care Act)

Yousef Rabhi said he still wasn’t comfortable with an item added to the budget policy regarding the Affordable Care Act. He was referring to this item, which had also been discussed at the board’s Oct. 2, 2013 meeting:

16. To be in compliance with federal health care reform and the Affordable Care Act effective 1-1-14, the Board of Commissioners reaffirms Resolution #13-TBD that part time employees are not permitted to work more than 25 hours per week. Any part time employee hired, shall not work more than 25 hours per week.

Rabhi didn’t feel this approach was in the spirit of the federal legislation, nor was it the right thing to do for county employees. Conan Smith agreed, noting that the board has discussed issues like a living wage and having health insurance as a right. Health care is important, he said, and the county shouldn’t be trying to figure out how not to give people health insurance.

Diane Heidt, the county’s human resources and labor relations director, said the intent is to alert departments about this potential issue as a liability that could affect their budgets, if employees work more than 30 hours per week. Starting in 2015, the Affordable Care Act will require the county to offer health insurance to anyone who works 30 hours or more per week during a specified period. It doesn’t mean that the employee has to buy the health insurance, Heidt explained, but the county must offer it. This will affect primarily the parks & recreation staff, sheriff’s office, the water resources commissioner, and the community support & treatment services (CSTS) unit – units that use more part-time employees.

After additional discussion, C. Smith moved to delete this item from the budget document, noting that it wouldn’t be an issue until 2015. That will give the county more time to figure out how to address it, he said.

Rabhi said he wanted to have a broader conversation about the county’s part-time employees, not just focusing on health care.

Outcome: Commissioners unanimously voted to eliminate the policy item regarding the Affordable Care Act.

2014-2017 County Budget: Board Discussion – Fund Balance Reserves

Conan Smith alerted commissioners that he plans to bring an amendment forward at the Nov. 20 meeting regarding the fund balance reserves. He referred to this item in the budget document:

12. The Board of Commissioners commits to long-term budget flexibility and sustainability, and an adequate level of cash flow with its attention to fund balance. A healthy fund balance is an essential ingredient and the following was considered to determine an appropriate level as a target: an appropriate level to fund at least 60 days of operations, to help offset negative cash flow (primarily from the seven month delay in property tax collections after incurred expenses), and to assist buffering any unexpected downturns. Therefore, the Board shall plan future budgets to meet the goal of a Reserve for Subsequent Years representing at least 20.0% of General Fund expenditures, net of indirect costs. To accomplish this any excess property tax revenue above projected budget (assumptions), but excluding the fiscal years that have structural salary increases tied to property tax revenue growth per labor agreements, as well as any year-end surplus of which 70% will be contributed to fund balance until the reserve goal is met and 30% to be determined by Board of Commissioner authorization.

He said he’s talked with the administration about this, and has come to agree with them about the 20% target. [The existing target is 8%.] One strategy for dealing with the county’s annual cash flow challenge is to increase fund reserves, he noted. Another strategy is to borrow internally from other county funds, and a third strategy is to issue tax anticipation notes, which results in an additional borrowing cost.

The easiest approach by far is to increase the fund reserves, he said. However, he’s reluctant to lock in a formula of allocating funds to that. He thought the allocation of surplus revenue should happen through a process with a thorough board debate.

C. Smith said he planned to work with administration to bring forward a proposal on Nov. 20.

2014-2017 County Budget: Board Discussion – Amendment (Revenue Increase)

Dan Smith proposed adjusting the revenue line item for general fund taxes and penalties to increase the projected revenues by $449,813 over the four-year period from 2014-2017.

Chart by Dan Smith showing his budget amendment to increase projected revenues.

He further proposed allocating the increased revenues in this way: (1) $100,000 each year to the sheriff’s office; (2) change the “Other Services & Charges for the Board of Commissioners” to add $26,230 for dues to the Michigan Association of Counties (MAC) and to cut the convention and conferences line item by half – to $12,275.

D. Smith explained that he had tried to come up with a way to address concerns about the public safety budget, as well as some interest by other commissioners in restoring the county’s membership in MAC. The projected increases in revenues are tweaked slightly to achieve the extra revenues that can then be allocated toward the sheriff’s budget and MAC.

From left: Commissioners Rolland Sizemore Jr. (D-District 5) and Yousef Rabhi (D-District 8).

Conan Smith called the proposed increase in projected revenues “negligible,” saying that it isn’t any more or less accurate than what’s currently projected. That’s not the issue. But he worried about the precedent of the board making this kind of change, rather than the professional finance staff. C. Smith also said he didn’t support joining MAC, saying he didn’t think the county got $26,230 worth of good service out of that organization. He didn’t think MAC was an effective advocate or an articulate representative for the values of Washtenaw County.

In response to a question from C. Smith, D. Smith said he’s previously mentioned concerns about a reduction to the sheriff’s department budget. That reduction makes it difficult for pro-active policing to be done, he said. The sheriff’s office has already been cut in previous budget cycles, he noted, and the proposed cuts will have a very adverse effect on public safety across the county.

D. Smith indicated that he’d be receptive if C. Smith wanted to propose an amendment to his amendment, eliminating the proposed restoration of MAC dues.

C. Smith said he was intrigued by D. Smith’s proposal, but wanted to postpone it until Nov. 20 in order to have time to talk with the sheriff.

Outcome: On a voice vote, the board voted to postpone action on D. Smith’s proposed amendment until the Nov. 20 meeting. Yousef Rabhi (D-District 8) voted against postponement.

2014-2017 County Budget: Board Discussion – Amendment (Coordinated Funding)

Dan Smith put forward an amendment to decrease funding to the line item for coordinated funding from $1.015 million annually to $915,000. The $100,000 cut would be allocated to the sheriff’s office. Coordinated funding supports local nonprofits that provide human services, through a partnership with the city of Ann Arbor, Washtenaw Urban County, United Way of Washtenaw County, and the Ann Arbor Area Community Foundation. The program is administered by the county’s office of community & economic development (OCED).

In introducing this amendment, D. Smith said he hears from people that public safety is one of the top concerns, and the board has also stated that public safety is a priority. He has great concerns about the proposed reductions to the sheriff’s department.

Outcome: D. Smith’s motion did not receive a second, so it died for lack of support.

2014-2017 County Budget: Board Discussion – Sheriff’s Office

Rolland Sizemore Jr. (D-District 5) asked county administrator Verna McDaniel if it was true that the sheriff’s department has a $500,000 automatic budget reduction each year. McDaniel said that during the first year that sheriff Jerry Clayton was in office (2009), his budget was cut by $500,000. But she contended it hasn’t been reduced by that amount in subsequent years.

Sizemore noted that the initial $500,000 cut occurred under the previous county administrator (Bob Guenzel). He wondered if that same amount was cut each year. McDaniel described that initial $500,000 as a structural cut. She noted that since 2008, the county has needed to cut budgets and the sheriff has cooperated. Because the $500,000 was structural, it carries through to subsequent years, she said.

County administrator Verna McDaniel and board chair Yousef Rabhi.

McDaniel confirmed that the administration is asking for a reduction in eight positions from the sheriff’s department, but she stated that those positions are currently vacant. Sizemore said he wouldn’t support that reduction.

Ronnie Peterson wondered what the effect would be on cutting those positions, and the impact it would have on public safety. He said he’d be interested in hearing from the sheriff.

Sheriff Jerry Clayton told commissioners that a couple of things about the budget deeply concerned him. He said he understands the broader budget context, and the role that his office plays. They’ve stepped up in finding reductions and increasing revenue. But at this point, continued cuts will greatly impact the ability of his office to provide services and to manage the police services contracts with other municipalities.

The administration’s assertion that the proposed cut of eight positions won’t have an impact is not true, Clayton said. It’s true that the positions are currently vacant, for a variety of reasons – including retirements and people quitting – but there are plans to fill those spots. He noted that a previous board of commissioners had approved a jail expansion. His office had been asked to conduct a staffing study, which determined that it would take 36 correction officers to staff the facility. The county board had approved that, and a hiring process has been ongoing. The sheriff’s office has over 420 employees, Clayton said, including full-time, part-time and seasonal workers. Given that number, there will always be a certain amount of turnover. There will always be vacant positions, he said. When the office is fully staffed, they can realize the level of services that are needed, Clayton said.

Clayton also addressed the question of the $500,000 annual reduction. He said when he came into office, he had agreed to it with the prior county administrator. But there was no agreement that it would be in perpetuity, Clayton said, “at least not in my mind. My mistake was in not getting it in writing.” At this point, his office can’t meet the proposed expenditure target, he said, so that puts them in a position of being over budget or reducing the services they provide.

Clayton referred to a letter he’d written to McDaniel, and cc-ed to the board leadership, in response to the budget proposal. The proposed budget reduction of $1.34 million for the sheriff’s office would significantly compromise public safety, he said. Although he could “grudgingly” agree to putting the eight positions on hold vacant status, he said, in exchange he wanted the administration to start eliminating the $500,000 automatic lump sum reduction that’s built into the sheriff’s office budget. He also hoped to be able to fill those vacant positions, if the county’s economic circumstances improve.

Clayton noted that some parts of the county government have been “held harmless” or have even seen increases. It’s not for him to judge whether that’s appropriate, he said, but it is his role to ask how the board can agree to reductions that will impact public safety, while stating that public safety is a priority.

Even local governments that have their own public safety departments still rely on the sheriff’s office as an additional public safety net, he said. As an example, he cited the recent murder of an Eastern Michigan University student. The sheriff’s office is involved in providing increased security in that area, and in helping coordinate other public safety entities. He gave another example of assisting a recent Ann Arbor investigation. “Because we’re a countywide jurisdiction, we’re able to connect the dots.” Criminals and crime don’t have jurisdictional boundaries, so public safety in Washtenaw County affects everyone, Clayton said. The county has a well-deserved reputation as a great place to live, in part because it’s a very safe and secure community. “That does not happen by accident,” he said. It requires a commitment to public safety.

Jerry Clayton, Washtenaw County sheriff.

As a countywide elected official, Clayton said it’s his responsibility to inform the board – which makes budget decisions – that if they continue along this path, they won’t be able to sustain public safety in a manner that residents are used to, and Washtenaw County might become a community that’s considered unsafe. There might be some areas that are insulated, “but we all know if there’s a part of Washtenaw County that’s considered unsafe, it affects us all.”

Yousef Rabhi thanked Clayton, but said he wanted to push back a little. He said he prioritized public safety and thinks it’s important. But he thinks a lot of things that the county does are important. The county doesn’t have the funding to do everything it used to do, he said, and there are tough decisions to make. If every department head had the chance to come forward, they’d give the same impassioned plea that the sheriff gave, Rabhi said, and the board needs to understand that fully.

The only way to sustain services in all areas is to get more revenue, Rabhi said. If the county prioritizes public safety, as it should, then residents should support a public safety millage to support the sheriff’s operations, he said. The county government has its hands tied by the state, Rabhi noted, and revenue streams are declining. There are few options, so he hoped commissioners would support putting a new millage on the ballot. Meanwhile, the board needs to make responsible budget cuts to balance its budget.

Clayton responded, saying it’s the board’s prerogative whether to invite every department head to talk with them. As for his own remarks, “it’s not an impassioned plea – I’m just stating the facts,” he said. Oftentimes the board doesn’t hear from people who are affected by budget cuts. It’s not possible to gauge the impact of budget cuts and outcomes if the board doesn’t have all the information from people who are affected, Clayton said. Nonprofit leaders come to the board and make those impassioned pleas, he added, “and you make decisions based on that. So don’t single me out. You asked me. I’m telling you what the impact is. For me not to tell you what I believe the impact on public safety is, if you make those cuts, would be negligent in my responsibility as the county sheriff.”

Sizemore thanked Clayton for coming, and said he’d like to be included in any future communication about the sheriff’s office budget.

Conan Smith said he was glad they were having this conversation, but was sorry that it’s happening in November. The board couldn’t have a better partner than the sheriff’s office in thinking through how to invest strategically. Clayton had actually inspired a lot of the processes that the board is now going through, Smith said, and Clayton’s team has played a leadership role. But Rabhi is right, Smith added, in that any department head could make a case for why their activities are important, and the county doesn’t have a rubric for evaluating why one activity is more important than another. “We’re trying to get there,” he said.

Clayton replied that he didn’t say public safety was more important than anything else – as he wasn’t making comparisons. His point was that it’s a priority to the county, but it’s still up to the board to decide how to prioritize the value of public safety, in terms of budgeting. If the board ends up cutting the sheriff’s budget, “we’ll live with it,” Clayton said. But he wanted the board and the public to know what’s likely to happen if cuts are made.

Clayton then gave some examples of how the sheriff’s office has collaborated to reduce expenses. Four SWAT teams supported by different governmental units were combined into one team, which reduced costs. Partnering with the city of Ann Arbor on dispatch operations saved the city almost $500,000, he said. He noted that previous discussions have connected economic development to the community’s sense of safety.

Conan Smith asked whether Clayton had talked to the administration about how the county can reduce expenses by decreasing the demand for the sheriff’s office services. Has the discussion occurred about where the county should be strategically investing to make that happen? Clayton said they’re working on that, but it’s a long-term approach that requires resources to achieve. Part of the office’s community engagement strategy is getting into the neighborhoods and working with residents to address root cause problems that change the dynamics of the community. That includes partnering with schools and human service agencies of all kinds, he said. Short of not getting re-elected, Clayton joked, he said he’d love to work himself out of a job.

Conan Smith then shifted to the issue of labor contract negotiations with POAM and COAM. The last contract with the sheriff’s deputies was “more lucrative” than what was implemented with other labor units, C. Smith said. Does this budget anticipate parity with other labor unions? he asked.

Yousef Rabhi (D-District 8).

Clayton reminded the board that the POAM and COAM agreements were negotiated first, before other units. He assumed that the administration had an overall target of concessions for all units. The POAM came to the table seeing what they could get, and they reached an agreement that was ratified by the board. As subsequent negotiations took place, it’s not fair to tell POAM that they didn’t step up, Clayton said. “They stepped up to what you asked. If you’d asked for more, then they could have had those negotiations.”

That said, Clayton reported that POAM and COAM are aware that all of these things are connected, including the impact on police services contracts with other municipalities. They understand that there’s a balance, he said.

Regarding the police services contracts, C. Smith wondered if the county has optimized that delivery of service, in terms of reducing the impact of those contracts on general fund allocations to public safety. The price point to municipalities can’t be so high that it’s unaffordable, he said, but he indicated there’s more that could be done – like multi-jurisdictional contracting, and innovative policing approaches.

Clayton said that multi-jurisdictional contracting is not something that the sheriff’s office can decide – that’s up to the different local governments. In terms of optimizing staffing, he noted that there’s been a lot of consolidation already. He addressed a complaint he’s heard about the sheriff’s office being top-heavy with management. When he took office, he was asked whether the sheriff’s office could assume responsibility for community corrections. It made sense so that happened, but a manager came with it. The same thing happened with emergency services, and a director came with that transition.

Clayton also said he’s had some conversations with local government officials who pay for police services, and he’d told them that the contract language might have to be revisited. That’s because if staffing is reduced, he’s not sure his office can meet the staffing levels that are laid out in the police services contracts. He didn’t want to set expectations at a level that he couldn’t meet.

Conan Smith said he was very supportive of a public safety millage. It would address the financial challenge as well as the policy tension that exists. Speaking as an Ann Arbor resident, C. Smith said he knows the sheriff’s office works with the city, but it’s much more palatable to invest in other communities’ public safety using the county’s general fund if there’s been a vote by residents to do that.

C. Smith noted that Dan Smith had raised the possibility of allocating an additional $100,000 to the sheriff’s department. How would Clayton use those funds, if available? Clayton replied that he’d restore the lost FTEs to put boots on the ground and staff in the jail. When staffing levels are lowered, his office becomes a reactive organization, he said.

Andy LaBarre asked Clayton how the board can deal with the disparity of views regarding the $500,000 budget cut that began in 2009. LaBarre didn’t think it was good to have a countywide elected sheriff and the county administrator on different pages regarding that issue. Clayton reiterated that it was an agreement made with the previous administrator, and that his assumption had been that it was just for a single two-year budget cycle – saying that’s how it had been presented to him. It was never his understanding that the cut was structural, so his question is whether the office can sustain that ongoing cut as well as additional reductions that are being requested.

The options are to reduce services, Clayton said, or to work with the administration over the next four years and restore that $500,000 to the budget – $125,000 each year. He realized that it couldn’t happen immediately.

LaBarre agreed with C. Smith about the importance of social services and human services, and he acknowledged that the sheriff’s office has worked on these issues – in particular, Derrick Jackson, director of community engagement for the sheriff’s office, has been integral for that, LaBarre noted. He hoped a solution could be worked out as quickly as possible regarding the structural budget question.

Clayton replied that his office will always remain a partner in this process, even if they don’t agree on the outcome.

2014-2017 County Budget: Board Discussion – Amendment (Legal Fees)

Dan Smith pointed to an appropriation in the budget document of $100,000 to cover “litigation matters involving the County as Plaintiff, to be overseen by the County Administrator.” He said he’s not a fan of lawsuits, noting the only people who really come out ahead are lawyers on both sides.

Curtis Hedger, Washtenaw County’s corporation counsel.

He didn’t want to see a recurrence of a recent situation when taxpayer dollars were spent on outside counsel. [This was likely an allusion to the county engaging outside legal counsel after being sued over the board's resolution opposing the state's Stand Your Ground law.]

D. Smith thought the county board meets regularly enough to appropriate funds when necessary, and the corporation counsel is competent to deal with matters until the board can act. He moved for that item to be stricken from the budget document.

Responding to a question from Conan Smith, corporation counsel Curtis Hedger said the need to use these funds doesn’t occur frequently. The item gives the administration some flexibility.

C. Smith thought that if the county is the plaintiff, that it ought to be a board discussion about whether to sue, or it should at least be a discussion for the board leadership.

Hedger said if something came up during the summer months when the board meets less frequently, this item would allow the administration to address it. Generally the cases are enforcement-related, tied to building code or soil erosion violations, for example. The intent is to give the administration some flexibility, Hedger said.

Alicia Ping (R-District 3) asked why enforcement couldn’t be handled through civil infractions. Hedger reminded the board that they just recently passed an ordinance allowing for civil infractions, but the ability to issue civil infractions for specific violations isn’t yet in place. In the future, having the ability to issue civil infractions will likely allow the county to avoid suing, he said.

Responding to a query from C. Smith, county administrator Verna McDaniel noted that she is authorized to make expenditures up to $100,000 for contracts without board approval.

In that case, C. Smith felt this item was already taken care of in the county’s existing policies.

Yousef Rabhi didn’t understand why they would remove the item, if it doesn’t matter one way or another. Why not just leave it in? He asked Hedger about the policy and process for litigating. Hedger replied that the county sues so infrequently that there isn’t a policy. Usually, the county is the defendant.

Rabhi then said he felt it was important to keep the item in place, to show that the board approves spending up to that amount on litigation. He thought that removing the language would hamstring the county’s ability to be legally nimble. He didn’t think the amendment was productive or made sense.

Rabhi noted that being a plaintiff doesn’t just mean the county is suing. It could also mean that the county joins in with other entities to take legal action, for public health and environmental protection – for example, seeking reparations for an oil spill on the Huron River. The board could still allocate money to fight it, he acknowledged, but it’s harder to stomach doing that if there isn’t a line item for it. “Things come up, folks, and we need to have the dollars budgeted to help to bring justice to people of Washtenaw County,” Rabhi said.

C. Smith said he looked at it as an encumbrance that gets baked into the budget. It’s money that’s not being allocated somewhere else. He noted that the office of corporation counsel has a $2.4 million budget. Was the $100,000 part of that amount? Financial analyst Tina Gavalier clarified that there actually is no line item encumbering these funds. If used, the amount would be taken from the general fund reserves. “In which case, I’m agnostic,” C. Smith said.

From left: Commissioner Dan Smith (R-District 2) and Curtis Hedger, the county’s corporation counsel.

Andy LaBarre wondered why it couldn’t be made a smaller amount, like $10,000. Hedger replied that it’s just been part of the budget document for a long time at that amount. Hedger wanted to make sure there’s enough to cover any potential litigation, because it varies from year to year.

D. Smith said this amendment wasn’t trying to undermine public health and safety. Rather, it’s a way to ensure that if the county is going to engage in significant litigation as a plaintiff, that it’s a board decision. It’s already been established that smaller amounts can be handled at the administrator’s discretion.

After further discussion, Hedger indicated he’d be willing to develop a policy on this issue for the board to review. If the item is removed from the budget document, it wouldn’t necessarily hamper his ability to initiate litigation, he said. If something happens that’s a true public safety issue, he’d move ahead anyway and “I’ll worry about where the money’s coming from later.”

Outcome: The amendment failed on a 4-5 vote. Supporting the amendment were Dan Smith, Alicia Ping, Ronnie Peterson, and Kent Martinez-Kratz. Voting against the amendment were Yousef Rabhi, Rolland Sizemore Jr., Conan Smith, Felicia Brabec, and Andy LaBarre.

2014-2017 County Budget: Board Discussion – Motion to Postpone

Dan Smith moved to postpone an initial vote on the budget until the board’s Nov. 20 meeting. There are several things that commissioners have said they’d like to work out, he noted, and one amendment had been postponed already.

Outcome on postponement: The motion failed on a 2-7 vote, with support only from Dan Smith and Ronnie Peterson.

2014-2017 County Budget: Board Discussion – Final Deliberations

Discussion continued. Alicia Ping identified an item in the budget document that was unclear:

13. The Board of Commissioners authorizes the County Administrator to continue the necessary match. The summary shall separately specify any proposed match in excess of the minimum required.

Verna McDaniel indicated that it was inadvertently included, and should be removed. No amendment was necessary to do that.

Ronnie Peterson said he wanted to support his colleagues, but he wouldn’t follow them over a cliff. He spoke at length, restating his concerns about a four-year budget. He noted that the board’s main responsibility is to set the budget, so if they do a four-year budget now, what are they being paid to do in the coming years? Anyone who votes for a four-year budget should cut their salaries in half, he said, because they’re delegating away their responsibility. He was upset that they were getting ready to vote, even though he said his concerns hadn’t been addressed.

Andy LaBarre responded to some of the concerns raised by Peterson. He noted that the budget assumes the status quo in terms of state and federal funding. Rather than paying off its pension liabilities at one time through bonding, the county has decided to handle those obligations on a year-by-year basis “in a somewhat blind manner,” he said, because the annual actuarial payment can’t be determined in advance. LaBarre said the scariest thing for him in not doing a four-year budget is to see the kinds of deeper cuts they’d have to make if they didn’t take this approach.

At the request of LaBarre, county finance director Kelly Belknap reviewed that approach. She noted that with the two-year budget approach, the county would have needed to make cuts of $2.6 million in 2014 and another $3.9 million in 2015. But if structural reductions are front-loaded in 2014, over the four-year budget period the overall amount of cuts will be reduced, she said. [The budget presented to the board on Oct. 2, 2013 identified $4.13 million in operating cost reductions. Those include: (1) $2.89 million in proposed departmental reductions; (2) $688,000 in estimated increased revenues from fees and services; (3) $450,000 in reductions to county infrastructure allocations; and (4) $100,000 in cuts to “outside agency” allocations.]

LaBarre said that’s the reason he’ll be supporting the four-year budget.

Felicia Brabec thanked commissioners for their input, and supported the four-year approach, saying it allows for strategic, long-term decisions. She felt it would be transformative and was the prudent thing to do. It’s a big change, and will entail a lot more work. In contrast to Peterson’s belief that salaries should be cut, she thought it made more sense for salaries to be doubled, because of the extra work.

Dan Smith called the question, a procedural move intended to force a vote. The vote on calling the question was unanimous.

Outcome on 2014-2017 budget as amended: Initial approval of the 2014-2017 budget was given on a 7-2 vote, over the dissent of Dan Smith and Ronnie Peterson.

2014-2017 County Budget: Final Public Commentary

Brian Mackie introduced himself by giving his Ann Arbor address, saying that makes him a resident of Washtenaw County. He noted that he’s also an elected official, and “I hope that doesn’t disqualify me from speaking.” [Mackie is the county's prosecuting attorney.] The board has been talking about the budget since January, he observed, and now it seems the discussions are getting more pointed and serious. It’s a difficult job, he said, “but I would suggest to you that you are making this much harder than it needs to be.”

There are a couple of places to look for guidance, he said. One is the state constitution. Mackie recalled how earlier this year at a budget retreat, one commissioner had said he didn’t give a crap about what the state says about mandates. [That commissioner was Conan Smith (D-District 9), who made this statement at a March 7, 2013 budget retreat: “I don’t give a crap about what the state tells me to do anymore; they clearly don’t have the prosperity of my community in mind.” He was referring to state mandates, arguing that state-mandated service levels should be interpreted at the “absolute possible minimum.”] Mackie pointed out that county government is a unit of state government. It’s how services are delivered to citizens, and it’s essential in our scheme of government, he said.

Mackie also said that the board should rely on the county’s “excellent administrator,” Verna McDaniel. She’s been working in county government for a long time, he noted, and knows what she’s doing. He didn’t believe there was tension between the sheriff and administrator. There’s a difference of opinion, he added, and he thought McDaniel was trying to carry out the wishes of the board. “Because frankly, I don’t believe public [safety], in spite what is said, is really backed by the Washtenaw County board of commissioners. Some of you certainly do. Some of you do not.” He also urged the board to listen to the sheriff. He indicated that the sheriff hadn’t been treated as well as others who’ve come before the board. Sheriff Jerry Clayton has a national reputation, Mackie noted. “He’s not only a good sheriff for Washtenaw County, he’s not only better than his predecessor in many ways, but he’s a national figure,” Mackie said. Clayton is called upon to train sheriffs nationwide. “He might know more about safety and criminal justice than you do,” Mackie told the board.

Mackie also talked about public safety in terms of working with the mentally ill, which he said was near and dear to the hearts of many commissioners. He encouraged them to listen to 911 calls. In a given hour, the sheriff’s dispatchers get calls from Ann Arbor three times an hour about a suicidal subject, he said. People call 911 because they’re desperate and they need help keeping someone alive. “So think about that, please,” he concluded.

Third-Quarter Budget Update

County administrator Verna McDaniel and the finance staff delivered a third-quarter 2013 budget update during the Nov. 6 meeting. The administration is projecting a budget surplus of $1,079,748.

The expected surplus is higher than the one projected earlier this year. During a second-quarter 2013 budget update that the county’s financial staff delivered on Aug. 7, 2013, a $245,814 general fund surplus was projected for the year.

The surplus is attributed in part to higher-than-expected general fund revenues of $103,805,884 – compared to $99,722,141 in the 2013 budget that county commissioners approved late last year. Total expenditures are expected to reach $102,726,136.

The surplus means that the county will not need to tap its fund balance in 2013 in order to balance the budget, as it had originally planned to do. By the end of 2013, the general fund’s fund balance is projected to stand at $17,867,835 or 17.3% of general fund expenditures and transfers out.

There are three areas that staff will be monitoring, which could affect the budget: (1) fringe benefit projections; (2) personal property tax reform; and (3) the impact of federal sequestration. [.pdf of third-quarter budget update presentation]

Third-Quarter Budget Update: Board Discussion

Alicia Ping (R-District 3) asked about a projected $65,000 over-expenditure in the 14A District Court. She wondered how that happened. Finance analyst Tina Gavalier replied that it’s primarily caused by overtime costs due staff shortages and staff medical leave. She noted that earlier this year, a $100,000 over-expenditure had been expected – so the $65,000 is actually an improvement, she said.

Alicia Ping (R-District 3).

Gavalier said the District Court has a budgeted lump sum reduction of $109,000 for 2013. One could argue, she said, that the court is meeting part of its lump sum reduction by having lower-than-projected over-expenditures. Ping wondered how overspending can result in a credit to the court’s lump sum reduction. Gavalier replied that the lump sum reduction was budgeted as an over-expenditure.

County administrator Verna McDaniel said the administration is working with the court to help identify ways to reduce expenditures. This has been ongoing over the last two years, she said. The court administration has been cooperative, she added.

Ping said she thought the courts had agreed to a $200,000 lump sum reduction. McDaniel clarified that Ping was referring to the Washtenaw Trial Court, not the District Court.

Ping asked whether the county would need to notify both courts, if the board wanted to give notice of an intent to eliminate the lump sum budgeting approach. McDaniel pointed out that there will be a new chief judge as of January 2014. [David S. Swartz was recently named chief judge of the Washtenaw County Trial Court, effective Jan. 1, 2014. The appointment was made by the Michigan Supreme Court. Swartz will replace current chief judge Donald Shelton, who has served in that position for four years.]

McDaniel said there might be some “different ways” to work things out with the new court leadership, and indicated that she’d like some time to give that a chance. [For more background on the lump sum agreement, see Chronicle coverage: "County to Keep Trial Court Budget Agreement."]

Conan Smith (D-District 9) asked about the projection for the end-of-year fund balance. Gavalier replied that assuming their projections are correct, the fund balance would be $17,867,835 as of Dec. 31, or 17.3% of general fund expenditures and transfers out.

Outcome: This was not a voting item.

Act 88 Tax Hike & Policy

Two items related to a tax to support economic development and agriculture were on the Nov. 6 agenda.

The board was asked to give final approval to an increase in the levy of the economic development and agricultural tax, known as Act 88 of 1913. The increase to the Act 88 millage is from 0.06 mills to 0.07 mills.

The millage will be levied in December 2013 and raise an estimated $972,635. Initial approval to the increase had been given by the board on Oct. 16, 2013. The funds will be allocated to the following groups:

• $408,135: Washtenaw County office of community & economic development (OCED)
• $200,000: Ann Arbor SPARK
• $100,000: Eastern Leaders Group
• $52,000: Promotion of Heritage Tourism in Washtenaw County
• $50,000: SPARK East
• $50,000: Detroit Region Aerotropolis
• $82,500: Washtenaw County 4-H
• $15,000: Washtenaw County 4-H Youth Show
• $15,000: MSU Extension for food systems-related economic development activities

The initial approval had allocated $423,135 to OCED. Based on a recommendation from OCED, an amendment approved unanimously on Nov. 6 shifted $15,000 from that allocation to fund food systems-related economic development. A second amendment, also passed unanimously, corrected the original resolution, which had stated that the millage would only be assessed against real property in Washtenaw County. The amendment clarified that the millage will be assessed against all taxable property located in the county.

The county’s position is that it is authorized to collect up to 0.5 mills under Act 88 without seeking voter approval. That’s because the state legislation that enables the county to levy this type of tax, which predates the state’s Headlee Amendment.

Also on Nov. 6, the board was asked to give final approval to a new policy for allocating Act 88 revenues, drafted by Conan Smith (D-District 9) and given initial approval on Oct. 16. [.pdf of Act 88 policy] The policy includes creating an Act 88 advisory committee to make recommendations to the board and prepare an annual report that assesses how Act 88 expenditures have contributed toward progress of goals adopted by the board.

The policy allows the committee to distribute up to 10% of annual Act 88 revenues without seeking board approval. The policy also allocates up to 30% of revenues to the county office of community & economic development, which administers Act 88 funding.

Act 88 Tax Hike & Policy: Public Commentary

Doug Smith pointed out that Act 88 only authorizes three activities. Two activities are advertisement, and the third is support of exhibitions of county products. He thought there was some confusion about the phrase that talks about increasing trade for county products. If you look at the structure of the sentence, that phrase refers to the purpose of supporting exhibitions of products, he said. “It’s not a standalone phrase.” The act doesn’t say anything about economic development, or giving money to startups or support of new companies, or subsidizing training programs. These economic development uses aren’t authorized by Act 88, he said.

Bill McMaster of Taxpayers United.

Regarding the board’s Act 88 policy, Smith noted that it uses the language of the law. The problem is that the contract that the county has with Ann Arbor SPARK doesn’t use the same language – it uses language of economic development. In addition, there’s no requirement for any kind of reporting for what the money will be spent on by SPARK. It all goes into one pot, he said, so the county can’t tell whether the spending complies with the law. The same is true for the $50,000 membership to the Detroit Region Aerotropolis, Smith said. What is that money being spent on? He asked commissioners not to use the Act 88 millage to support economic development.

Bill McMaster of Taxpayers United told commissioners that he’d helped Dick Headlee with the statewide campaigns in 1976, 1977 and 1978 that ultimately resulted in what’s known as the Headlee Amendment. The first year they tried, in 1976, the proposal only got 40% of the vote. In 1978, it received 58% of the vote statewide.

The people who voted were looking for tax limitation, he said. One of the real surprises that’s emerged since then is the “innovative use” of past legislation in an attempt to get around the Headlee Amendment, he said. The state constitution reigns supreme, McMaster said. When you refer to a 100-year-old bill, it’s “much subservient” to the constitution, he noted, because it’s a piece of legislation and in no way equates to the power of the constitution. He called the county’s attempt to levy a $1 million tax on Washtenaw County residents – without a vote of the people – an “ambush.” He urged the board not to pass the Act 88 levy or the policy. It’s not constitutional without a vote of the people, he said.

McMaster concluded by saying that part of the Headlee Amendment has a provision for a lawsuit, starting in the court of appeals “which we will pursue.”

Act 88 Tax Hike: Board Discussion – Move to Table

Dan Smith said he might have a lot to say about this item, but he first wanted to “consider something else I have in mind,” so he moved to table the resolution.

Outcome: The motion to table failed on a voice vote.

Act 88 Tax Hike: Board Discussion – Constitutional?

As he has on previous occasions, Dan Smith raised questions about whether levying this kind of tax is constitutional, because it would exceed constitutional limits on the amount of property tax that can be levied without voter approval. He also questioned whether the language of the Act 88 statute allows the kind of general interpretation the county is using to define eligible uses of funds generated by the levy. Those eligible uses are laid out in a long run-on sentence that’s difficult to parse, he noted, but if you read it very carefully, the use of the funds is quite limited.

The law states:

AN ACT empowering the board of supervisors of any of the several counties of the state of Michigan to levy a special tax, or by appropriating from the general fund for the purpose of advertising the agricultural advantages of the state or for displaying the products and industries of any county in the state at domestic or foreign expositions, for the purpose of encouraging immigration and increasing trade in the products of the state, and advertising the state and any portion thereof for tourists and resorters, and to permit the boards of supervisors out of any sum so raised, or out of the general fund, to contribute all or any portion of the same to any development board or bureau to be by said board or bureau expended for the purposes herein named.

“So not only are we quite likely levying these funds unconstitutionally,” Smith said, “once we levy them unconstitutionally, we then go and spend them illegally.”

Smith has been advocating for written clarification from the county’s corporation counsel, Curtis Hedger, that would explicitly state the county’s position on the legality of this levy. That hasn’t happened, Smith said.

Hedger maintains that he can provide that kind of written legal opinion only under direction from the entire board. Smith questioned whether it takes a vote of the board to request a legal opinion. Another Michigan county has a policy that interprets MCL 49.155 in such a way that a commissioner could apply on behalf of the entire board for a legal opinion, Smith reported.

MCL 49.155 states:

The prosecuting attorney, or county corporation counsel in a county which has employed an attorney in lieu of the prosecuting attorney to represent the county in civil matters, shall give opinions, in cases where this state, a county, or a county officer may be a party or interested, when required by a civil officer in the discharge of the officer’s respective official duties relating to an interest of the state or county.

Smith said he’s not even really looking for a legal opinion. He just wants additional clarification regarding the Act 88 levy specifically, similar to what’s provided in other cover memos. It’s certainly unclear whether this levy is 100% legal, he said. He noted that on the issue of the State Street corridor improvement authority, he didn’t have concerns about its legality. His concerns with the CIA were policy-related, he noted.

But for Act 88, he can’t get past the legal concerns in order to discuss the policy. The board is essentially saying “Sue us and we’ll let the court sort this out,” Smith said. That’s not the right approach. Taxpayers are forced to pay this tax under threat of foreclosure – if they don’t pay their taxes, the county can foreclose on their property. “That is a very very heavy threat from government to tax somebody,” he said, so the board should be very sure, beyond a shadow of a doubt, that it’s legal.

He concluded by saying he can’t support the way the county is levying this tax, and he can’t support the way the money is spent after it’s collected.

Dan Smith (R-District 2).

Conan Smith said he appreciated D. Smith’s passion on this issue. He noted that last year, the state legislature took up a proposal to eliminate Act 88. There was a robust discussion and public hearings, but the legislature ultimately took no action and left it in place. He said he’s comfortable that if the state legislature is satisfied that Act 88 comports with the constitution, then that’s the case “until a court determines otherwise.” He agreed that the bar is high in taking the government to court, but his priority isn’t in determining the constitutionality of this law. His priority is in investing in the economic outcomes that these dollars can provide for county residents.

C. Smith called the language of the Act 88 law “one of the worst run-on sentences” and that makes it tough to determine what exactly the funds can be used for. It’s reasonably arguable that increasing trade in the county is a central tenet of the act, he said, and that affords some leeway in interpreting how those funds are used, including making the kinds of investments that the county is considering.

C. Smith agreed with Doug Smith’s point during public commentary that there aren’t controls in place to see exactly how some organizations are spending the Act 88 funds that the county provides. However, in looking at each organization’s strategic plan, you can make a “reasonable inference” that the funds are being invested in a way that comports with Act 88. He said he appreciates the complexity of this issue, and that as a pre-Headlee statute its applicability is “somewhat convoluted.” However, he’s comfortable that the board has the authority to do this and he’d support the resolution, even though he would prefer to levy an even higher rate.

Andy LaBarre asked Hedger what it would entail, in terms of time and effort, to produce a legal opinion. Hedger replied that it would take some time to write up an opinion, but that he’d already done the research. One challenge is that there’s not much guidance as far as case law, because it hasn’t been challenged in court. There’s a lot of statutory interpretation that would be required, and that would take some time to figure out how to make it as clear as possible, Hedger said.

Hedger noted that any opinion wouldn’t apply just to Act 88. It would also apply to the veterans relief millage that the county levies, as well as some other levies.

Ronnie Peterson cautioned that getting a legal opinion “opens up a big door.” He noted that Bill McMaster of Taxpayers United might get a legal opinion, “but it won’t be from us.” The ramifications would be very challenging, Peterson said, and the board needs to consider that as they deliberate on a four-year budget.

Outcome: On a 7-1 vote, the board gave final approval to an increase in the Act 88 levy. Dan Smith (R-District 2) dissented and Rolland Sizemore Jr. (D-District 5) had left the meeting by the time the vote occurred, just after midnight.

Act 88 Policy: Board Discussion

Regarding the Act 88 policy, Dan Smith said he had several concerns about it. As an example, he highlighted the policy that would allow the advisory committee to distribute up to 10% of annual Act 88 revenues without seeking board approval. He noted that Act 88 authorizes only the board to direct how revenues are spent: The wording in the statute is very specific, he said.

Corporation counsel Curtis Hedger responded that by approving this policy, the board would be providing that direction – in essence, delegating it to the advisory committee. It’s one step removed, Hedger said, but it’s “not just coming out of the blue.”

Alicia Ping wondered why the amount of 10% was designated. Conan Smith replied that there are “leveraging opportunities that rise up with relative immediacy,” like matching grants or event sponsorship. Some of these things don’t warrant board approval, he said. Small amounts are spent regularly through the county administrator’s discretion, he noted. The committee could also give money directly to an organization, if it sees fit to do that and if the organization provides programs or services that fit with the Act 88 allowed uses.

Ping wondered if the full board would get a report on how that 10% would be allocated. C. Smith pointed out that the policy includes a requirement for an annual report about how all Act 88 expenditures were made, and assessing whether those investments were effective.

Yousef Rabhi said every agency that’s funded with public dollars should be accountable for how those dollars are spent. There’s been some citizen feedback that some of the agencies funded by the county don’t have enough accountability, he said. “We need to make sure that they are accountable for public dollars that we allocate to them.” This policy helps accomplish that, Rabhi concluded.

Outcome: The Act 88 policy was unanimously approved. Rolland Sizemore Jr. had left the meeting and did not vote.

Act 88 Policy: Request for Legal Opinion

In introducing this item, Dan Smith said he believed the Act 88 statute is constitutional, but that the county isn’t using it constitutionally because the county is already at its maximum allowable levy. One reason why the state legislature didn’t repeal Act 88 is that the law is constitutional for counties that haven’t reached their maximum allowable levy amount, he said.

It’s critical to sort this out, he added, because if these levies are legal, then about three-quarters of a billion dollars could be raised across the state to fix roads – raised locally and controlled locally. Everyone who drives on roads knows that this needs to be done, he said. “If this is a solution that can be used across the state, we need to make people aware of it.” If it’s not, “we need to know that too.”

He brought forward a resolution directing corporation counsel to provide an opinion on taxes levied in excess of constitutional limits without a vote of the people.

Outcome: The motion died for lack of a second.

Pittsfield Township State Street CIA

On the Nov. 6 agenda was a resolution for final approval of a tax-sharing agreement with Pittsfield Township and the State Street corridor improvement authority (CIA), which is overseen by an appointed board. [.pdf of agreement] An initial vote had been taken on Oct. 16, 2013, over dissent by Dan Smith (R-District 2).

The resolution authorizes the county administrator to sign the tax-sharing agreement, which would allow the CIA to capture 50% of any county taxes levied on new development within the corridor boundaries, not to exceed $3,850,464 over a 20-year period, through 2033. The purpose is to provide a funding mechanism for improvements to the State Street corridor roughly between the I-94 interchange and Michigan Avenue, as outlined in the CIA development and tax increment financing plan. [.pdf of TIF plan]

The Pittsfield Township board of trustees held a public hearing on the CIA at its Oct. 9, 2013 meeting. That started the clock on a 60-day period during which any taxing entities within the corridor can “opt out” of participation. The Washtenaw County parks & recreation commission voted to support participation in the CIA at its Oct. 8, 2013 meeting. Other local taxing entities in the corridor are Washtenaw Community College, the Huron Clinton Metro Authority, and the Saline and Ann Arbor district libraries. The Ann Arbor District Library board voted to approve its own tax-sharing agreement at a meeting on Nov. 11, 2013. At its Nov. 12 meeting, the Saline library board voted to opt out of the CIA. The metroparks board also decided to opt out, with a vote at its Nov. 14 meeting. No action has been taken by the WCC board of trustees, which next meets on Nov. 26.

On Oct. 16, Dan Smith had moved a substitute resolution. It stated that the county would not participate in the CIA. [.pdf of D. Smith's substitute resolution] He said he supported the road improvement project, but objected to the TIF funding mechanism. He noted that the county had the ability to invest directly in the project using general fund money. He also pointed out that if the county participated in the CIA, the county would have no control over how its portion of the captured taxes are spent. In addition, the decision not to participate would not necessarily be permanent, he said, because the county board could rescind this resolution at any point.

The Oct. 16 vote on D. Smith’s opt-out resolution failed on a 2-7 vote, with support only from D. Smith and C. Smith.

Pittsfield Township State Street CIA: Public Commentary

Mandy Grewal addressed the board during public commentary, thanking them for their support of the CIA. She introduced several other township officials who attended the meeting but who did not formally address commissioners, including treasurer Patricia Scribner; CIA board member Claudia Kretschmer of Gym America; Craig Lyon, the township’s director of utilities and municipal services; and consultant Dick Carlisle. She indicated that county commissioner Felicia Brabec would soon be appointed to the CIA board. She hoped that the county commissioners would support the CIA.

County commissioner Conan Smith (D-District 9) and Pittsfield Township supervisor Mandy Grewal.

Christina Lirones introduced herself as a Pittsfield Township resident and former township clerk, treasurer and chair of the planning commission. She’s very opposed to the CIA proposal and she hoped the board would opt out. The township held a public hearing on Oct. 9, and she noted that she’d emailed commissioners a copy of the statement she’d made at that meeting. [.pdf of Lirones' statement at Oct. 9 township public hearing] There are other ways that road improvements could be funded, she said, and past township administrations avoided these kinds of TIF funding arrangements. As someone who supports county services and who voted for the county parks millage, Lirones said she’s deeply concerned that tax dollars that should support residents and parks will be diverted in part for road expansion. In most sections, the road already has three lanes or more, she noted, and it’s in much better shape than many other county roads. That part of the township would increase in value, regardless of the road expansion.

The CIA TIF is being rushed through, Lirones contended, in order to get it on the tax rolls this year. There’s no benefit to the county, she argued, only the loss of tax revenue. Businesses that move to the corridor already receive tax abatements from the current township board, she said, and a TIF would cut revenues further. In the past, developers have funded road improvements based on projected traffic counts, but the CIA TIF would reverse this policy and shift the expense onto taxpayers. It’s unfair to responsible developers who’ve paid for this in the past, she argued, and it’s unfair to residents and taxpayers. It’s also unfair to taxing entities that are giving up their tax revenues. She said the residents who live on State Street were not invited to serve on the CIA board and they don’t support this project. She said she and her husband were the only members of the public who attended all the meetings related to the CIA, which she characterized as poorly noticed and held during the day.

Lirones spoke again at the second opportunity for public commentary later in the evening, after the board’s budget discussion. She noted that the CIA tax-sharing agreement limits the amount of tax capture to $3.8 million from Washtenaw County tax revenues. At first, she said, she thought perhaps it’s a small amount of money for the county. But it turns out that based on their budget discussion, the county is in some dire financial straits, she said, so the $3.8 million is a significant amount that would be lost to the county operating budget. It’s money that the sheriff’s department and human services could use, she said. Lirones hoped the board would decide to opt out. She restated many of the reasons she’d previously mentioned for opposing the CIA, including the fact that the corridor is already being developed even without the road improvements. It’s important for tax dollars to be used for their original intent. “I’m afraid it’s only the first in a series of tax increment finance and capture districts,” she concluded.

Pittsfield Township State Street CIA: Board Discussion

There was minimal discussion before the final vote on Nov. 6. Dan Smith pointed out that the board was voting on the tax-sharing agreement. It states that the amount of tax capture will be 50%, not the full 100% that would be allowed by law. Procedurally, it was not an “opt-in” vote, he noted.

Conan Smith said he was glad that the board leadership and administration will be developing a policy regarding tax increment financing districts.

Outcome: The tax-sharing agreement for the State Street CIA was unanimously approved.

Coordinated Funding

On the agenda was a resolution for final approval to extend the coordinated funding approach for human services, as well as to authorize some changes in that funding model. Initial approval had been given on Oct. 16, 2013, over dissent from Dan Smith (R-District 2).

No dollar amounts were allocated, but the resolution authorizes the allocation of children’s well-being and human services funding for 2014 through 2016. It authorizes the continued management of those funds through the county’s office of community & economic development, using the coordinated funding approach – with some modifications.

The county is one of five partners in the coordinated funding approach. Other partners are city of Ann Arbor, United Way of Washtenaw County, Washtenaw Urban County, and the Ann Arbor Area Community Foundation. It began as a pilot program in 2010; this is the second time that the program has been extended.

The coordinated funding process has three parts: planning/coordination, program operations, and capacity-building. The approach targets six priority areas, and identifies lead agencies for each area: (1) housing and homelessness – Washtenaw Housing Alliance; (2) aging – Blueprint for Aging; (3) school-aged youth – Washtenaw Alliance for Children and Youth; (4) children birth to six – Success by Six; (5) health – Washtenaw Health Plan; and (6) hunger relief – Food Gatherers.

Last year, TCC Group – a consulting firm based in Philadelphia – was hired to evaluate the process. As a result of that review, several changes were recommended. Those recommendations will also be authorized as part of the county board’s overall coordinated funding resolution, as described in a staff memo:

The County’s Human Services and Children’s Well-being funding will continue to focus on critical services for early childhood, aging, housing/homelessness, safety net health, school-aged children and youth, and food security/hunger relief. Under this proposal, this funding will not necessarily be allocated to these six priority areas in proportional amounts consistent with historic trends. Allocations to these six priority areas will be based on identified community-level outcomes, the strategies that align with them, and how each are prioritized.

1) Under this proposal, the application pre-screening process will be broadened to better accommodate smaller non-profit organizations. New types of financial documentation will allow smaller agencies to illustrate their viability in the absence of an independent audit. 2) Capacity-building grants would be available to target smaller agencies that need to improve their governance or financial structure to be eligible for the application process, with the goal of expanding the opportunities for all agencies providing human services in the County in an equitable fashion.

Recommendations for specific funding allocations will be made to the county board in April 2014, for funding to start on July 1, 2014. In addition, the RNR Foundation – a family foundation that funded TCC Group’s evaluation of the coordinated funding approach – will now be an additional funder in this process.

During a discussion on this item at the county board’s Oct. 16 meeting, some commissioners expressed concern about controlling the allocation process related to the county’s contribution. Mary Jo Callan, director of the office of community & economic development, reported that she’d be bringing back recommendations to the board for approval, prior to any allocation of funding. This has also been the process in previous years.

Coordinated Funding: Board Discussion – Community Outcomes

On Nov. 6, Callan reviewed the process and provided additional details about how allocations are made. She also provided a handout with information about community outcomes for coordinated funding. [.pdf of outcomes handout]

Callan explained that the approach of looking at community-level outcomes is new, but it has been discussed for some time. It aligns with the board’s own initiative to look at outcomes when determining budget allocations for the general fund, she noted. The level of investment in the coordinated funding approach is up to the board, she said. But one of the points of five different funding sources – working together – is to eliminate the need for a nonprofit to apply five different places in order to get funded. County dollars go into the six areas that have been identified as priorities, Callan said.

From left: Commissioner Felicia Brabec (D-District 4) and county administrator Verna McDaniel. Both serve on the coordinated funding leadership team.

During the last funding round, there were about three times as many applications as there were entities that ultimately received funding, she noted. The application review and scoring process is very transparent, she added.

Conan Smith (D-District 9) wondered how the board can become engaged in that process. Callan reported that Felicia Brabec (D-District 4) serves on a coordinated funding leadership team, as does county administrator Verna McDaniel. Weight is given to organizations serving those residents who are most at risk and impoverished, Callan said.

Callan said she hoped the board wasn’t interested in becoming involved in the operation details of how scoring rubrics are created for request for proposals. But the board’s priorities for funding anti-poverty efforts and root causes are very clear, she said, and are reflected in all of the coordinated funding work. Every single community outcome is about preventing, reducing or eliminating poverty, Callan said.

Conan Smith said he felt the scoring rubric really needs to be shared with the board before it’s adopted, because that’s how dollars get allocated.

C. Smith also raised the issue that smaller, innovative nonprofits often don’t compete well in the coordinated funding allocation. He asked Callan to address that issue. That’s been an enduring concern, she replied, and in general the larger, more established agencies do tend to get funded. In this upcoming cycle, a couple of things have changed, she said. A new funder, RNR Foundation, has joined the coordinated funding initiative. That family foundation wants to provide capacity-building dollars to smaller nonprofits so they can compete in this funding process.

Additionally, requiring a third-party independent audit is very onerous and costly for smaller nonprofits. So the coordinated funders have changed the threshold for requiring an audit – to agencies with budgets of $500,000 or more. For agencies with budgets between $250,000 and $500,000, an independent financial review is now acceptable. Nonprofits with budgets under $250,000 can provide the 990 forms that are filed with the IRS, as well as the most recent financial statements that are submitted to that nonprofit’s board. All of this is an attempt to lessen the burden on smaller organizations, she said.

C. Smith asked when the coordinated funding reviewers are appointed. In about a month, Callan replied. A request for information (RFI) has already been issued for nonprofits that hope to get funding. The RFP to solicit applications for funding will be released in January or early February of 2014, she reported. It’s up to each funding organization to appoint their reviewers, she said, but in the past those appointments have been recommended by OCED. It’s important for the group of reviewers in aggregate to have a diverse skill set, she said. C. Smith noted that having diverse perspectives is also important.

C. Smith said when funding recommendations are brought to the board, it feels like a rubber stamp at that point. In reality, Callan said, the board can decide how to invest the funds. The vote they’d be taking that night was about whether they want to stay at the table. Other input includes making clear the board’s funding priorities and appointing reviewers. She said she understands that the board feels its hands are tied sometimes, because of the complexity of the process.

C. Smith said the board’s input at the end of the process – in approving the funding allocation – isn’t meaningful. He’d rather see the board be more involved in the front end. He wanted commissioners to really talk about the funding priorities and the reviewers as a board, so that they can make more of an impact. He noted that the board has never changed a single allocation for coordinated funding.

In response to another question from C. Smith, Callan noted that OCED staffs seven community advisory boards, including the Ann Arbor housing and human services advisory board and the county community action board. Input from those boards is integrated into the coordinated funding process, too.

C. Smith concluded by saying his comments were meant to improve the process, which he thought had taken a step forward during this cycle. Callan replied that she welcomes suggestions for improvement. “I would encourage you and the board to use the same rigor with all of your investments,” she said.

Ronnie Peterson spoke at length about the importance of ending poverty, and the county’s role in making that happen.

Outcome: The board gave final approval to extend the coordinated funding approach. The vote was unanimous, but Rolland Sizemore Jr. had left the meeting when this vote was taken at nearly midnight.

Platt Road Advisory Committee

Commissioners were asked to appoint members of a 13-member advisory committee to look at options for the county-owned Platt Road site in Ann Arbor, where the old juvenile center was located.

Andy LaBarre (D-District 7).

Members are: county commissioners Yousef Rabhi and Andy LaBarre, who both represent districts in Ann Arbor; Ann Arbor city councilmember Christopher Taylor; three county senior managers – Bob Tetens, Mary Jo Callan and Greg Dill; Jennifer Hall, director of the Ann Arbor housing commission; and six residents – Jeannine Palms, Vickie Wellman, Amy Freundl, Ron Emaus, Peter Vincent and Robb Burroughs.

The board had voted to create the committee at its Sept. 18, 2013 meeting. The idea of an advisory committee to help with the dispensation of this property – at 2260 and 2270 Platt Road – was first discussed at the board’s July 10, 2013 meeting. It was included in an overall strategic space plan for county facilities, which proposed demolishing the former juvenile center and exploring redevelopment of the site for affordable housing, alternative energy solutions, and county offices. Details of how the advisory committee would be appointed, as well as the committee’s formal mission, was an item to be worked out for a board vote at a later date.

On Sept. 4, a debate on the advisory committee proposal lasted about an hour, with concerns raised about the resolution’s focus on affordable housing. A staff memo listed several elements that would be explored, including: (1) affordable rental housing by the Ann Arbor housing commission; (2) an affordable housing green demonstration pilot project; (3) connection to the adjacent County Farm Park; (4) ReImagine Washtenaw Avenue design principles; and (5) other identified community priorities, such as geothermal, solar panels or community gardens.

According to that staff memo, this visioning work will be funded by $100,000 in grants from the U.S. Department of Housing and Urban Development and the Michigan State Housing Development Authority, with funds to support the development of affordable housing. The money was part of a $3 million federal grant awarded to the county in 2011 and administered by the county’s office of community & economic development (OCED).

On Sept. 4, several commissioners expressed interest in exploring a broader set of options, beyond affordable housing – including the possible sale of the property. Ultimately, the item was postponed at that meeting. Board chair Yousef Rabhi had directed Greg Dill, the county’s infrastructure management director, to work with commissioners and staff to bring forward an alternative resolution on Sept. 18.

However, when the Sept. 18 agenda was posted online, the resolution remained unchanged, aside from the amendment made on Sept. 4.

A couple of hours prior to the start of the Sept. 18 meeting, LaBarre emailed commissioners and The Chronicle with a substitute resolution that he brought forward during the meeting. It was much more general in its direction, stripping out most of the details related to the affordable housing focus. In addition to the composition of the community advisory committee (CAC), the new resolution’s main directive was stated this way:

BE IT FURTHER RESOLVED that the Board of Commissioners directs the CAC to provide recommendations to the Board of Commissioners relative to disposition, including an alternatives analysis; and preferred methods of community engagement for the Board of Commissioners to undertake during the disposition process;

The Sept. 18 resolution also set a deadline of Dec. 31, 2013 for the committee to deliver its analysis and recommendations to the board. [.pdf of substitute resolution] That resolution passed unanimously on Sept. 18, with three commissioners absent.

There was no discussion on this item during the Nov. 6 meeting.

Outcome: Appointments of the Platt Road advisory committee passed unanimously.

Chelsea Milling Brownfield Status

Commissioners were asked to give final approval to a brownfield plan by the Chelsea Milling Co., makers of Jiffy Mix. Initial approval had been given on Oct. 16, 2013. [.pdf of brownfield plan]

The plan relates to a renovation of an abandoned 77,700-square-foot warehouse at 140 Buchanan in the city of Chelsea. The company plans to invest more than $4 million in the project, according to a staff memo that accompanied the Oct. 16 resolution.

Brownfield status allows the company to be reimbursed for up to $376,805 in eligible activities through tax increment financing (TIF). The total amount to be captured through TIF over 16 years is $580,677, which includes fees paid to the county brownfield program administration and the county’s local site revolving remediation fund.

A public hearing took place at the board’s Oct. 16 meeting. It occurred after midnight and only one person – Lara Treemore Spears of ASTI Environmental, a representative from the project – spoke briefly. She indicated that two company officials had been at the meeting but left around 11:30 p.m.

There was no board discussion on this item.

Outcome: The board voted unanimously to give final approval to the brownfield plan.

Interim Public Health Officer

Ellen Rabinowitz was nominated to serve as interim health officer for Washtenaw County. She currently serves as executive director of the Washtenaw Health Plan, a job she’ll continue to hold. [.pdf of Rabinowitz resumé]

Ellen Rabinowitz, executive director of the Washtenaw Health Plan and new interim public health officer.

The appointment is spurred by the retirement of current health officer Dick Fleece, effective Dec. 28. The position is mandated by the state, and requires a graduate degree and 5 years of full-time public health administration. Responsibilities include overseeing the county’s public health department.

According to a memo that accompanied the appointment resolution, the interim status will allow for time to make a decision about the permanent appointment. Both the interim and permanent appointments require approval by the state Dept. of Community Health. The staff memo also states that any savings received during the interim appointment will go toward reducing the use of fund balance projected in the 2013/2014 public health budget.

Before the Nov. 6 vote, Rabinowitz and Fleece both addressed the board. Rabinowitz told commissioners that Fleece’s retirement will leave a big hole, as he’s done some amazing work over the last five years. She said he’s leaving the department in great shape. It’s clearly a dynamic time in the field of health care, with the Affordable Care Act changing the nature of health care service delivery, she said. It opens up a lot of opportunities for the field of public health.

Commissioners praised both Rabinowitz and Fleece for their service. Ronnie Peterson (D-District 6) recalled that former county administrator Bob Guenzel often used Fleece as a model for those in public service. Fleece never failed to respond to a citizen’s request, Peterson said, and he’ll be deeply missed.

Conan Smith (D-District 9) told Rabinowitz that he really wants to see a public health board created. He asked her to report back to the board about what a public health board would mean to the department, and the process required to set it up. Rabinowitz replied that it’s an important issue to explore. The possibility of pulling together a board of experts is something she’s interested in exploring. Peterson said it should be a goal to establish such a board by the end of 2013, because public health advocates who might serve on the board should be involved in selecting a permanent director.

Rolland Sizemore Jr. asked county administrator Verna McDaniel for an update on possible restructuring of the public health department at the board’s Nov. 20 meeting.

Fleece told commissioners that he gave his full support to Rabinowitz, calling her the perfect person at the perfect time to take on this role, citing her connections to the health care field and her managerial abilities.

Regarding a public health board, Fleece said he’s heard varying opinions. Some people say that such boards require a lot of care and feeding to the extent that the board becomes a burden on staff. In other cases, the board can be an advocate and serve as a good source of information. There will be decisions to make regarding how much authority to give a public health board, he noted.

Fleece also pointed out that the county’s public health department already seeks advice from many sources, including the University of Michigan School of Public Health. He said he’d do everything he can to help with this process.

Commissioners gave Fleece a round of applause.

Outcome: Commissioners voted unanimously to appoint Ellen Rabinowitz as interim health officer.

Public Hearings Set

The board was ask to set two public hearings: (1) on Nov. 20 to get input on the 2014-2017 budget for Washtenaw County; and (2) on Jan. 8, 2014 to get feedback on a proposed ordinance that would allow the county to issue municipal civil infractions for owning an unlicensed dog.

Hearings on both of these items were already held on Oct. 16, 2013. However, no one spoke at those hearings, which were held after midnight as part of a meeting that lasted over six hours.

County administrator Verna McDaniel and her finance staff had presented the budget on Oct. 2, 2013. Earlier on Nov. 6 the board gave initial approval to the budget, with some amendments, on a 7-2 vote over the dissent of Dan Smith (R-District 2) and Ronnie Peterson (D-District 6).

The $103,005,127 million budget for 2014 – which represents a slight decrease from the 2013 expenditures of $103,218,903 – includes putting a net total of 8.47 full-time-equivalent jobs on “hold vacant” status, as well as the net reduction of a 0.3 FTE position. The recommended budgets for the following years are $103,977,306 in 2015, $105,052,579 in 2016, and $106,590,681 in 2017. The budgets are based on an estimated 1% annual increase in property tax revenues. [.pdf of draft budget summary]

The proposed ordinance to issue municipal civil infractions for owning an unlicensed dog would also establish that the county treasurer’s office would be the bureau for administering these infractions, and would set new licensing fees. [.pdf of dog license ordinance] [.pdf of staff memo and resolution]

Outcome: Without discussion, the board set both public hearings for Nov. 20.

Tax for Indigent Veterans Services

Commissioners were asked to approve an amendment to a resolution that authorized the levy of a millage for services to indigent veterans. Commissioners had passed the original resolution on Oct. 16, 2013.

That original resolution stated that the millage would only be assessed against real property in Washtenaw County. In fact, the intent is to assess the millage against all property located in the county. The resolution approved on Nov. 6 clarifies that intent.

The county will levy a 0.0333 mill tax for indigent veterans services. The new rate of 1/30th of a mill will be levied in December 2013 to fund services in 2014. It’s expected to generate $463,160 in revenues. The previous rate, approved by the board last year and levied in December 2012, was 0.0286 mills – or 1/35th of a mill. It generated $390,340 this year.

Outcome: The amendment passed unanimously, without discussion.

Proposal to Rescind “Stand Your Ground” Resolution

At the board’s Oct. 16, 2013 meeting, commissioners had passed a resolution – on a 5-4 vote – urging the state legislature to repeal Michigan’s version of the Stand Your Ground law. They heard extensive public commentary on the issue at that meeting as well as at earlier meetings this fall, much of it from supporters of Stand Your Ground.

On Nov. 6, Dan Smith (R-District 2) pointed out that corporation counsel Curtis Hedger had informed the board that a lawsuit had been filed against the county and that Hedger needed to retain outside counsel to defend the county. [See Chronicle coverage: "Washtenaw Board Sued Over Stand Your Ground."]

The lawsuit was a direct result non-binding action that the board took that passed by one vote, Smith noted. If the lawsuit defense was handled internally, it wouldn’t be a concern, he said. But it’s being handled by an outside attorney who’s billing the county by the hour, he noted.

Because of that, he said, he was presenting a resolution to rescind the anti-Stand Your Ground resolution.

Outcome: No one seconded Smith’s motion, so the motion died for lack of support.

Stormwater/Asset Management Grant

Commissioners were asked to give initial approval to applying for and accepting a state grant through the Stormwater/Asset Management program for $1.1 million over three years – from June 1, 2014 through May 31, 2017.

From left: Washtenaw County water resources commissioner Evan Pratt, and Harry Sheehan, the office’s environmental manager.

The grant is available through the Michigan Dept. of Environmental Quality and would be used by the county office of the water resources commissioner to develop a combined stormwater/asset management plan for Washtenaw County drains.

The funds are part of a broader SAW program – stormwater, asset management and wastewater – that Gov. Rick Snyder authorized in January 2013 to provide $420 million in grants and loans for water quality improvements.

According to a staff memo, the grant would “fund staffing, consulting, software and hardware to implement an asset management system, including inventory, condition assessment, criticality of assets, operation and maintenance planning, and capital improvements.” The intent of the plan is to “strengthen local units of government to make informed decisions with regard to stormwater collection, treatment, master planning, zoning and site plan review.”

Water resources commissioner Evan Pratt and Harry Sheehan, environmental manager with the county office of the water resources commissioner, both attended the Nov. 6 board meeting but did not formally address the board.

There was no discussion on this item.

Outcome: Commissioners gave initial approval to this grant application. A final vote is expected on Nov. 20.

Emergency Management Performance Grant

The board considered a resolution to approve the acceptance of pass-through funds from the U.S. Dept. of Homeland Security to support county emergency management operations. The funding of up to $86,677 would be used for the salary and fringe benefits for the county’s emergency management director. That position, part of the sheriff’s office, is held by Marc Breckenridge.

Breckenridge attended the Nov. 6 board meeting but did not formally address the board. Nor did commissioners raise any questions on this item.

Outcome: Commissioners gave initial approval to the emergency management performance grant. A final vote is expected on Nov. 20.

Communications & Commentary

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

Communications & Commentary: Delonis Center, Barrier Busters

Four people spoke about social services during the first opportunity for public commentary, including three people who represented the Shelter Association of Washtenaw County, which runs the Delonis Center homeless shelter in Ann Arbor.

Martin Delonis addressed the county board on Nov. 6, thanking the county for its financial support of the Robert J. Delonis Center, a homeless shelter in Ann Arbor that’s named after his father. Martin Delonis serves on the board of the Shelter Association of Washtenaw County, which runs the center.

Ellen Schulmeister, the association’s CEO, read a thank-you letter from a former client of the Delonis Center – a former teacher and legal secretary in her mid-50s, who attempted suicide twice because of reoccurring homelessness. This woman also struggled with health issues, but during her stay at the Delonis Center she got the help she needed and is now living in her own apartment. Schulmeister told the board that this woman had specifically asked that her story be shared with the entities that support the center, which includes the county.

Martin Delonis told commissioners that the Robert J. Delonis Center is named after his father. Delonis said he recently followed in his father’s footsteps by joining the shelter association’s board. He thanked the board on behalf of his family, the Delonis Center, and the people that the center serves. He paraphrased a prayer that he said was important to his family: “We should not hope for tasks that are equal to our powers, but instead, powers equal to our tasks.” The county supports the shelter and helps its task of ending homelessness one person at a time, he said. He thanked commissioners for their continued commitment.

Debbie Beuche introduced herself as president of the shelter association’s board. She thanked commissioners for their support, saying that it means a lot for the community. She hoped they would continue that support.

Harriet Bakalar told commissioners that she’d been a social worker in this area since 1971, and wanted to speak about the importance of funding Barrier Busters. She’d heard there was some consideration about reducing funding for that program. For the last 13 years she’s worked for the Housing Bureau for Seniors, and has helped seniors as they make transitions. Many people in the county are extremely vulnerable to homelessness, she said. Many people work here but can’t afford to live here. Barrier Busters is a lifeline to many of the seniors that she works with, and the program has helped stabilize people’s housing situations. She didn’t think anyone would want to see seniors on the streets, so she encouraged commissioners to continue support of the Barrier Busters fund.

Communications & Commentary: 1,4 Dioxane

Kent Martinez-Kratz (D-District 1) brought up the ongoing cleanup of the 1,4 dioxane plume. The environmental contamination is related to past activities of the former Gelman Sciences manufacturing operations in Scio Township. Gelman was later bought by Pall Corp. Martinez-Kratz serves on the Coalition for Action on Remediation of Dioxane (CARD), which is calling for better cleanup standards.

Martinez-Kratz said he was frustrated that the Michigan Dept. of Environmental Quality (MDEQ) hasn’t yet updated the toxicity levels for 1,4 dioxane. The MDEQ’s current 1,4-dioxane generic residential drinking water cleanup criterion was set at 85 parts per billion (ppb). But an EPA criterion set in 2010 was for 3.5 ppb. The MDEQ was supposed to re-evaluate its own standards by December 2012, based on the EPA’s 2010 toxicological review. It missed that deadline, and set a new deadline for December 2013. The MDEQ is now proposing to leave the standards unchanged.

Kent Martinez-Kratz (D-District 1).

Martinez-Kratz noted that this affects residents in his district, but it’s difficult to inform them of the danger because of the different standards being used by the EPA and MDEQ. He’d been hoping the MDEQ would update its standards.

By way of background, a public hearing was held this month in Lansing on this issue, drawing several local residents and elected officials, including state Rep. Jeff Irwin (D-District 53) of Ann Arbor.

The county board of commissioners has also previously taken a stance on this issue. At their Sept. 18, 2013 meeting, commissioners voted to direct staff to explore options – including possible legal action – to help set cleanup criteria in Michigan for the carcinogen 1,4-dioxane. In part, the item relates to a 1,4 dioxane plume stemming from contaminants at the former Gelman Sciences plant.

On Nov. 6, Yousef Rabhi (D-District 8) thanked Martinez-Kratz for his leadership on CARD. Rabhi had served on CARD during his first two years in office, he noted, and he knew he was passing it off to someone who’s passionate about this issue.

Later in the meeting, outgoing public health officer Dick Fleece noted that he’d been working on the issue of 1,4 dioxane for decades. “Good luck with that,” he quipped. It’s something where there’s a lot of work but not a lot of results. He said he’d make sure the board’s Sept. 18 resolution on this issue gets into the public record as part of the public hearings that were taking place in Lansing.

Communications & Commentary: Misc. Public Commentary

Tom Partridge spoke during the evening’s two opportunities for public commentary. He told commissioners he was advocating for the county’s most vulnerable residents, who need affordable housing, shelter for the homeless, health care, and public transportation. It’s dishonorable for commissioners to come to these meetings and disregard the needs of people who are virtually on the steps of the county administration building, he said.

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

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

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UM football game day street closures (pink) with detour route (purple).

Vehicle access on the fourth side of Michigan Stadium, on university property, will also be restricted.

The street closures are new security measures. According to the staff memo accompanying the resolution, it’s part of an effort to increase safety by creating a vehicle-free zone around the stadium, and involves a cooperative effort with the University of Michigan, U.S. Department of Homeland Security and the city of Ann Arbor police department.

Most of the traffic controls would be in place for the period starting three hours before a game until the end of the game. However, in an amendment to the resolution made during the council’s Aug. 8 meeting, the closure of the southbound lane on Main Street was restricted to just one hour before the game start.

Traffic controls include the following. E. Keech Street between S. Main and Greene streets would be closed. Access to Greene Street from E. Hoover to E. Keech streets would be limited to parking permit holders. The westbound lane on E. Stadium Blvd. turning right onto S. Main Street (just south of the Michigan Stadium) would be closed. And S. Main Street would be closed from Stadium Blvd. to Pauline.

During the meeting an amendment was made to the resolution, stating that after the first three football games, the AAPD will meet with the neighborhood and make a report at the city council’s Oct. 7 meeting.

The council’s vote was 7-4 with dissent coming from Sabra Briere (Ward 1), Margie Teall (Ward 4), Marcia Higgins (Ward 4), and Sumi Kailasapathy (Ward 1).

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]

The community corrections division is a unit of the Washtenaw County sheriff’s office, with an emphasis on programs and services aimed at keeping people out of jail by providing sentencing options for the Washtenaw County Trial Court – including pre-trial services, drug testing, electronic monitoring, and social education. The funding comes from several sources: (1) $421,900 in state revenue; (2) $260,890 in program-generated fees; (3) $240,983 in appropriations from the county’s general fund; and (4) $118,703 from fund balance.

According to a staff memo, an estimated 99,365 jail bed days were saved in 2012, for an estimated savings of $8.446 million – based on an estimate of $85 per day for incarceration. [.pdf of staff memo]

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

The council’s action came at its June 3, 2013 meeting, two weeks after the council set its FY 2014 budget – during a May 20, 2013 debate that ultimately rejected funding for three additional police officers. The proposed budget amendment, which failed on a 5-6 vote, had been brought forward by Jane Lumm (Ward 2). The amendment would have reduced the budget of the 15th District Court by $270,000.

The resolution on June 3 was brought forward by Lumm and Sumi Kailasapathy (Ward 1), who both supported the unsuccessful attempt to reduce the 15th District Court budget to fund police. The June 3 resolution came partly in response to the sentiments expressed during the FY 2014 budget debate, when some councilmembers on the prevailing side had said they’d prefer for additional police to be paid for by the DDA.

The DDA itself has designated $300,000 in its parking fund budget for the next year as “discretionary” and has previously discussed allocating that money to a “clean and safe” initiative – which could include funding police officers. However, sentiments on the DDA board have been mixed about the exact nature of the staffing the DDA would like to pay for. Some DDA board members have indicated a preference for hiring staff who would act as “ambassadors” – not police.

The DDA board meets next on June 5, 2013. For a Chronicle op-ed on this general topic, see: “Counting on the DDA to Fund Police?”

Dissenting on the June 3 resolution were Christopher Taylor (Ward 3) and Margie Teall (Ward 4).

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]

From left: Chuck Warpehoski (Ward 5), Christopher Taylor (Ward 3) and Stephen Kunselman (Ward 3). Budget deliberations pushed the meeting until nearly 2 a.m.

The council considered several amendments to the FY 2014 budget. But the total impact on the general fund of all the successful amendments was not significant, leaving mostly intact the “status quo” budget that had been proposed by city administrator Steve Powers a month earlier. That was a budget with $82.9 million in general fund expenditures. [.pdf of one-page summary of possible amendments] [.pdf of longer detail on FY 2014 budget amendments]

Most of the successful amendments were voted through with relatively little debate, and involved amounts of $100,000 or less. For example, the Washtenaw Health Initiative received an additional $10,000 allocation, and the Miller Manor senior meals program received a $4,500 boost. Allocations to human services nonprofits were increased by $46,899. And the general fund balance was tapped to conduct a $75,000 study of sidewalk gaps so that projects could be prioritized.

The affordable housing trust fund received an infusion of $100,000 from the general fund reserve. The council also approved an amendment prohibiting the spending of $326,464 that was set aside in the FY 2014 budget for public art, in anticipation of a final affirmative vote on a change to the public art ordinance. A vote on amending that ordinance is likely to take place on June 3, before the fiscal year begins on July 1.

The “parks fairness” amendment, which came after deliberations on all other amendments, was a straightforward calculation in accordance with a city policy. The policy requires that any increase in general fund spending be matched by a parallel increase for parks. The council approved that $22,977 amendment with scant remark.

Just three issues took about 80% of the council’s roughly 4.5-hour budget deliberations: (1) the budget of the Ann Arbor Downtown Development Authority, (2)  the possible reduction of the 15th District Court budget in order to pay for three additional police officers, and (3) the proposed restoration of loose leaf collection in the fall.

Of the most time-consuming items, the change to the DDA’s budget was ultimately approved – after escalating political rhetoric led to a kind of compromise that had almost unanimous support. The DDA compromise budget amendment called for a $300,000 transfer from the DDA’s TIF (tax increment finance) fund to the DDA’s housing fund, and a recommendation to spend $300,000 of TIF money on the replacement of Main Street light poles. Only Christopher Taylor (Ward 3) dissented.

The lone dissenting vote on the budget as a whole was Jane Lumm (Ward 2), who issued a verbal spanking of her colleagues and the city administrator – for proposing and approving a budget she did not feel reflected a priority on public safety. Countering Lumm was Taylor, who pointed out that roughly half of the general fund expenditures are related to public safety.

Budget: Time Overview

For a time-stamped chronological account of the deliberations that was posted live during the meeting, see “May 20, 2013 Ann Arbor City Council: In Progress.” The summary of deliberations below is presented in the rough order of time spent on each of the amendments.

FY 2014 budget: Time spent on deliberations, by topic. The proportionate times are estimated from time stamps from The Chronicle’s live updates. Time from the roughly 10-minute recess was assigned to the immediately preceding item of discussion, which was the DDA budget debate.

Occupying most of the council’s time – around an hour and a half – was discussion of the Ann Arbor Downtown Development Authority’s budget. The council wound up with a compromise that transferred $300,000 from the tax increment finance (TIF) fund to the housing fund, and a recommendation from the city council to spend $300,000 on replacement of light poles on Main Street. The sole dissent on the compromise was Christopher Taylor (Ward 3).

The second-longest amount of time spent in the council’s budget deliberations related to a service previously provided by the city but discontinued a few years ago: collection of loose leaves in the fall. The loose leaf collection program invited residents to push leaves into the street, where the leaves were collected on a neighborhood-by-neighborhood schedule. That’s been replaced with collection through carts and bags – a purely “containerized” approach. The discussion lasted over an hour and did not result in the restoration of the mass leaf collection service. The proposal got support only from Jane Lumm (Ward 2), Sally Petersen (Ward 2), Mike Anglin (Ward 5), and Sumi Kailasapathy (Ward 1).

And taking a bit under an hour’s worth of deliberations was a proposal to reduce the 15th District Court’s budget by $270,000 and to use the recurring savings to hire three additional police officers. That proposal failed on a 5-6 vote – with support only from Lumm, Anglin, Kailasapathy, Stephen Kunselman (Ward 3) and Marcia Higgins (Ward 4). A proposal to fund a single police position – by eliminating an FTE in the city attorney’s office through a retirement – received shorter debate and less support, with yes votes coming only from Lumm and Kailasapathy.

DDA Budget: Background

In the summary of possible amendments compiled for the council before the meeting, there were competing amendments on the DDA budget – one championed by mayor John Hieftje, with the other put forward by Stephen Kunselman (Ward 3). Both dealt with the fact that the DDA’s tax increment finance (TIF) capture is now expected to be $568,000 more in FY 2014 than the roughly $3.9 million on which the DDA based its FY 2014 budget.

Hieftje’s version of the amendment specified three areas on which the additional revenue was supposed to be spent: housing, replacement of failing Main Street lamp posts, and the economic development agency Ann Arbor SPARK. It specified a $100,000 transfer to the DDA’s housing fund. Kunselman’s version was confined to housing, and transferred $500,000 from the DDA’s TIF fund to the DDA’s housing fund.

The council considered Kunselman’s amendment, and ultimately approved it in amended form – transferring $300,000 to the housing fund from the TIF fund and recommending that an additional $300,000 be spent on light poles on Main Street.

By way of background, the DDA is financially a “component unit” of the city. The DDA captures some of the taxes that would otherwise go to the jurisdictions that levy taxes within a specific geographic area. But it’s just the initial increment – between the taxable value of an unimproved property and the value of a property after improvements are built – on which the Ann Arbor DDA captures taxes.

The Ann Arbor DDA was established under a city ordinance in Chapter 7 of the city code, which appears clearly to limit the amount of the TIF revenue the DDA is supposed to receive to an amount that’s a function of the forecasted revenue in the TIF plan – a foundational document of the DDA.

The Ann Arbor DDA has given Chapter 7 a different interpretation since 2011, when the implications of Chapter 7 were reportedly first noticed. On the Ann Arbor DDA’s interpretation, the relevant language does not actually limit the amount of TIF revenue that the DDA receives. That led to an attempt earlier this spring by the city council to clarify the language of the ordinance so that the DDA did not have the flexibility of interpretation in the future. At its May 6, 2013 meeting, the council postponed that effort at clarification until September 2013.

The Ann Arbor DDA also operates the city’s public parking system under a contract with the city. Under the terms of that contract, the city receives 17% of gross revenues from the parking system.

With respect to the DDA’s budget, the state’s enabling statute for downtown development authorities indicates that an authority is supposed to adopt its budget after the governing municipality approves it [emphasis added]:

125.1678 Budget; cost of handling and auditing funds. Sec. 28. (1) The director of the authority shall prepare and submit for the approval of the board a budget for the operation of the authority for the ensuing fiscal year. The budget shall be prepared in the manner and contain the information required of municipal departments. Before the budget may be adopted by the board, it shall be approved by the governing body of the municipality. Funds of the municipality shall not be included in the budget of the authority except those funds authorized in this act or by the governing body of the municipality. (2) The governing body of the municipality may assess a reasonable pro rata share of the funds for the cost of handling and auditing the funds against the funds of the authority, other than those committed, which cost shall be paid annually by the board pursuant to an appropriate item in its budget

However, the Ann Arbor DDA board has typically adopted its budget before the city council approves the city’s fiscal year budget, of which the DDA’s budget is a component. That was the case this year as well, when the DDA board adopted budgets for FY 2014 and 2015 on Feb. 6, 2013. [.pdf of DDA FY 2014-15 budget]

DDA Budget: Deliberations

Stephen Kunselman (Ward 3) led off the deliberations by reminding his council colleagues of some proposals he’d mentioned at the council’s May 6, 2013 meeting. That was the occasion on which the council postponed the DDA ordinance amendments until Sept. 3.

On May 6, Kunselman had sketched out a number of possible proposals: (1) 10% of the DDA’s TIF capture would be earmarked for affordable housing; (2) the DDA’s housing fund would be reserved for affordable housing at 30% of the area’s average median income; (3) 50% of the city of Ann Arbor’s TIF “rebate” would be deposited into the city’s affordable housing trust fund; and (4) for the FY 2014 budget, $0.5 million of the DDA’s TIF would be transferred to the DDA’s housing fund.

On May 20, Kunselman continued deliberations by specifying how he wanted to see the DDA spend the $500,000 that his budget amendment would transfer into the DDA housing fund. Kunselman wanted it to be used on Miller Manor, an Ann Arbor housing commission property located at 727 Miller Ave. Miller Manor is not located within the DDA district.

Ann Arbor Housing Commission properties. The size of the dot is proportional to the number of units in the location. The largest dot is Miller Manor. (Map by The Chronicle. Image links to interactive map.)

However, under an adopted Ann Arbor DDA policy, investments of DDA TIF can be made outside the geographic boundary of the district, as long as they are within 0.25 miles of the boundary. The western edge of the DDA district boundary on Miller Road is Chapin Street, and Miller Manor is located about 0.21 miles from Chapin – within the area described in the DDA’s policy. But Kunselman noted that the city could not tell the DDA how to spend the money – saying the city could simply put the money into the housing fund. And that meant it would have to be spent on housing.

Leaving most of the additional money in the TIF fund – as mayor John Hieftje’s proposed amendment would do – still provided complete flexibility for the DDA to spend the money as it wished, cautioned Kunselman. Under his own amendment, Kunselman argued, the DDA would need to spend it all on housing. But he argued for spending the money on Miller Manor, because it was public housing stock, which was meant to be accessible to those with incomes of 30% of the area median income (AMI). Kunselman described the kind of housing the DDA had supported with City Apartments, a private development under construction at First and Washington, as supporting the 80% AMI level.

Kunselman also contended that it was not a surprise to anyone that the DDA would be receiving the additional $568,000, and he didn’t understand why the DDA had not put that additional revenue in its proposed budget when it was adopted in February. Kunselman called it a “lowballed” budget. The additional funds had not been brought up until he’d advanced his proposed amendment to the DDA ordinance earlier in the spring, he said. Kunselman’s contention was that the DDA could have reasonably known that its TIF revenue would be closer to $4.5 million than to the $3.9 million it budgeted near the end of February.

Hieftje invited city CFO Tom Crawford and Susan Pollay, executive director of the DDA, to the podium to answer questions. Hieftje asked Pollay when the numbers for the tax assessment are available to the DDA. She said that the DDA saw the numbers when the council did – April 1. Pollay contended that the DDA is not privy to the estimates that are being formulated. So the DDA does its best to estimate based on previous years, she said.

Kunselman asked Crawford to confirm what Crawford had told Kunselman in response to the question of when estimates of assessed value were available – saying he’d been told it was Jan. 1. Crawford said there are a lot of things that go on between January and April. It’s closer to April when it’s final, explained Crawford. But Kunselman pointed out that the board of review notices are sent out in March, which means that the numbers are available before then. Crawford responded by saying that “they have to process that stuff.” It’s around April that the numbers are actually known. Crawford allowed that estimates can be done on fairly good data in January, but the final numbers are available in April.

Pollay then responded to Hieftje’s prompting about the nature of the DDA board’s discussion at a special meeting on May 13. Hieftje contended that the DDA achieved a quorum on that occasion and reached a consensus on the allocation of additional TIF revenue. A quorum would be seven of the 12-member DDA board.

Later in the meeting, Hieftje described his own resolution as based on the “DDA action last week.” [In an email to the council, DDA board chair Leah Gunn had characterized the May 13 meeting as "informal." That description is consistent with the fact that no resolutions were voted on or discussed. Gunn's email indicated that seven board members had attended. The Chronicle recorded only the following six board members as present: Leah Gunn, Joan Lowenstein, John Splitt, Sandi Smith, Roger Hewitt and Newcombe Clark.]

Pollay told the council that there’s an interest on the board in replacing the lamp posts on Main Street, which are rusting from the inside.

Ann Arbor Main Street rusted light pole. (Photo from April 2012 by city of Ann Arbor staff.)

Pollay also indicated that the DDA wants to support some affordable housing efforts and economic development, which are council priorities. She described the possibility of sending DDA board members and SPARK officials to other communities to find out what they’re doing better than Ann Arbor. Specific places to visit, for example, were Chapel Hill, North Carolina, and Madison, Wisconsin. [.pdf of DDA's summary of May 13, 2013 meeting]

Sabra Briere (Ward 1) noted that the amendment proposed by Kunselman is to allot 100% of the additional TIF revenue to affordable housing. She asked Pollay how those funds would be used in the future.

Pollay responded by saying that that the DDA is planning to meet with housing providers in the near future, and that will help determine how the board might spend the $500,000 on affordable housing.

Briere asked if the DDA has a plan for housing that has criteria to determine how grants are made to housing. Pollay responded to Briere by describing the “full spectrum” of housing. The DDA is interested in housing at all levels for all people, Pollay said.

Sally Petersen (Ward 2) contrasted the alternative amendments – Kunselman’s compared to Hieftje’s. She wanted to see if they could be combined. She asked Kunselman if he’d consider lowering the amount to $300,000 – as a friendly amendment to his budget resolution. [Amendments that are considered friendly by the sponsors don't require a vote.] Kunselman rejected Petersen’s offer by saying he felt a vote should be taken on that.

Sumi Kailasapathy (Ward 1) reminded the council that the public hearing on the DDA ordinance – on April 15 and May 6 – made clear there’s a gap that’s perceived by the community in affordable housing. [Several members of the homeless community spoke during that hearing in support of the DDA.] Some residents have been left behind, she said. Not everybody is meant to be a Google worker. She wanted to stick with the $500,000 for affordable housing that was in Kunselman’s resolution.

Hieftje then invited public services area administrator Craig Hupy to the podium to talk about the urgent need to replace the light poles on Main Street. Hupy indicated that no provision has been made in the city’s budget to replace them. Up to now, Hupy said, the discussion has been centered on the idea of the DDA paying for the light pole replacement, because the DDA did the original installation. He identified the general fund as the source of the funding, if the city were to pay for the light pole replacement.

[At the May 13 gathering of the DDA board, Pollay indicated that she'd been informed that if the city undertook the installation, it would take a more functional approach and install a fewer number of replacement light poles – using "cobra head" fixtures, instead of the decorative lamp posts currently in place. That cost for the functional approach was estimated at $50,000.]

Responding to a question from Kunselman, Hupy described an interest in not having the same “design error” going forward. [At the May 13 gathering of the DDA board, Pollay had described how the light poles that are rusting sit flush on the concrete and may sit in water. A newer design has the base of the poles elevated on "fingers."]

The cost is estimated to be around $465,000, Hupy said. [In a follow-up email responding to a query from The Chronicle, Hupy indicated that no detailed specification and bidding has been done at this point. So the pricing is somewhat "soft," indicating that when staff puts initial estimates together, they try to make sure they can do the job for the price that's estimated.]

Chuck Warpehoski (Ward 5) got clarification from CFO Tom Crawford about how much the council could control in the DDA’s spending. Essentially, Crawford indicated that the council could make transfers between funds, but could not mandate which projects the money was spent on or in which year it was spent. Warpehoski said the light pole replacement is important – as they’ve been falling down. He proposed a change from $500,000 to $400,000 for the transfer to the DDA’s housing fund, with $100,000 for light poles. Kunselman indicated that would be a friendly amendment. Kunselman stressed that it would actually just reduce the amount of the transfer to $400,000, but not specify the $100,000 be designated to light poles.

Some back-and-forth ensued between Crawford and Christopher Taylor (Ward 3) about the nature of one of the resolved clauses and the importance of recognizing the additional revenue to the TIF fund.

Briere drew out the fact that the unbudgeted TIF amount, not originally anticipated by the DDA in its budget, is actually $568,343. She wanted to know why the full amount is not being dealt with. City administrator Steve Powers explained that it’s because $500,000 is the amount Kunselman put in the resolution and city staff didn’t take the liberty of changing it. Briere wanted to change the amendment to reflect the actual amount. The council was amendable to revising the amount of additional TIF revenue recognized to $568,343.

Briere highlighted another project the DDA wants to undertake – South University improvements. Pollay also mentioned that the brick streets of North Fifth Avenue are “waiting for us” to be improved.

Kailasapathy described the additional TIF revenue as a “windfall.” Pollay countered Kailasapathy by saying that $3.4 million will go toward debt service. Pollay also brought up the $508,000 that the DDA gives the city annually – as part of an $8 million grant the DDA awarded toward the bond payments for the new Justice Center.

Warpehoski introduced an idea promoted by Dave DeVarti and Alan Haber – that the DDA would pay off the loan on the former Y lot, located between Fourth and Fifth avenues, north of William. Such an action would free up the proceeds of the eventual sale of that city-owned land to be dedicated to affordable housing. This approach has the advantage that the proceeds wouldn’t have to be spent on properties within the DDA district, he noted.

Alluding to Hieftje’s version of the DDA budget amendment, Briere indicated that she’s not a 100% fan of SPARK. But she’s still concerned about allocating funds for some kind of economic development.

Referring to a resolution approved by the council earlier in the meeting, Petersen indicated she’s not expecting the need for the economic development task force to incur expenses by traveling to other cities. The task force was not set up with a budget, she noted. She was grateful for the spirit of generosity in Hieftje’s amendment that would put the DDA in a position to provide those funds. But she figured any expenses would be nominal and would be shared among the entities represented on the task force – the city, the DDA, and SPARK.

Hieftje returned to the issue of the light poles on Main Street. Hupy indicated that it would not be possible to hang banners on the poles until the poles were replaced. Responding to Warpehoski’s idea that the light poles could be replaced over a period of time, Hieftje asked Hupy if efficiencies would be gained by replacing them all at one time. Essentially, Hupy’s response was yes. He identified issues like a need to inspect the light poles that were in need of replacement, and the possibility that replacing only selected poles could result in mismatches in the style of poles.

As far as other projects the DDA is looking to pursue, Hieftje returned to the issue of South University and Pollay described wanting to finish off the Fifth and Division street project in the Kerrytown area.

Hieftje then said he had some concerns about trying to tell the DDA what to do. He referred to Kunselman’s approach as a command-and-control strategy. He reiterated his concern about the light poles on Main Street.

Taylor concurred with Hieftje, saying that the resolution was an attempt to micromanage the DDA. Downtown is a complex place, Taylor said, and the city doesn’t understand the downtown as well as the DDA – “that’s just the truth.” He called on the council to approach the DDA’s budget with humility, in light of the fact that the council does not have all the information – but the DDA does. He contended that the amendments offered by Hieftje and Kunselman took different approaches. [The original amendments differed materially only with respect to the dollar amount to be transferred from the DDA TIF fund to the DDA housing fund – $500,000 versus $100,000. With the friendly amendment that was in place at the time of Taylor's remarks, the difference was $400,000 versus $100,000.] Taylor called Kunselman’s amendment a blunt instrument for a delicate task, and stated that he’d vote against it.

Jane Lumm (Ward 2) responded to Hieftje’s characterization of the amendment as a “command-and-control” approach. She stressed the fact that the message the council had heard in response to the proposed DDA ordinance changes was clearly about affordable housing.

Kailasapathy disagreed with Taylor’s assessment of the DDA as a sophisticated organization. She quoted from an email Pollay wrote back in October 2008 to a resident. [The resident was Peter Zetlin, who subsequently pasted Pollay's email to him in a comment on The Chronicle's live updates filed from the meeting.] Pollay wrote:

For what it’s worth, the proposed parking structure would be paid for with parking revenues (not tax dollars), and unnoted in the local press, the demand for public parking has been increasing every year – including this year, where the numbers of people paying to park exceeds the numbers in all previous years.

Kailasapathy noted that it did not prove to be the case that the new Library Lane parking structure was paid for only with parking revenues. This year, she noted, 87% of the TIF dollars went to bond payments. She disagreed with the idea that the DDA was a sophisticated organization. She said it was good to have oversight of the DDA and important to give guidance.

Hieftje reminded Kailasapathy that she wasn’t serving on the council back in 2008: “Just to point out, Councilmember Kailasapathy, because I know you weren’t here, the underground parking structure was fully supported by city council.”

[The Feb. 17, 2009 vote on issuing the bonds for the underground parking structure was 10-1, with dissent from Mike Anglin. Hieftje's remark was reminiscent of one he made at the council's Dec. 1, 2008 meeting, in reminding Sandi Smith, Kailasapathy's predecessor in that Ward 1 seat, that she had not served on the council at the time the former YMCA property had been purchased.]

Kunselman then told Hieftje, “Of course, you’re not going to support anything that I bring to the table.” [Kunselman was in some sense echoing Hieftje's opening to an email that Hieftje had sent to Kunselman a few weeks earlier, which Hieftje began with: "I understand your need to automatically oppose anything I may be in favor of but wanted to reply just to try and put us all on the same page."]

Kunselman pointed out that there’s only a $300,000 difference between the amended amendment Kunselman was proposing and Hieftje’s proposal. Kunselman indicated he felt that Hieftje’s criticism of the approach as “command and control” could be applied to Hieftje’s own proposal. Kunselman contended that “This is about loyalty to the DDA; this is not about loyalty to the citizens of Ann Arbor.”

Kunselman pointed out that next year, the DDA’s bond payments made out the TIF fund will go from $3.4 million down to $2 million – $1.4 million less. That could be spent on all kinds of light poles, he said. Kunselman discounted the idea that $300,000 was a big difference in that context. He ventured that Hieftje would not have even proposed a DDA budget amendment if Kunselman had not indicated his intent to bring one forward.

Kunselman then addressed Hieftje’s description of the DDA’s board meeting on May 13 and the attendance by the press. From what Kunselman understood from the press, the board didn’t pass a resolution at that meeting, and the DDA didn’t amend its budget. He characterized it as “all talk.” Kunselman accused Hieftje of playing politics.

Marcia Higgins (Ward 4) then said she was not opposed to putting more money toward affordable housing. But she was not sure that this support for affordable housing should come through the DDA. Even if the council transfers $400,000 to the DDA housing fund, the council has no guarantee that the DDA will spend that $400,000 in the way the council would like to see it spent. If the council really wants to support affordable housing, it should simply take money out of the general fund, she said, and put it in the city’s affordable housing trust fund. If the council wants the DDA to be independent, she didn’t see how the resolution did that.

Higgins noted that the light poles fell down a year ago, so she wondered why it had become a crisis situation that had to be dealt with. She didn’t remember hearing about how it was a crisis. She indicated a lack of support for either Kunselman’s or Hieftje’s amendment.

Margie Teall (Ward 4) said she had the words “micromanagement” in her notes as well. She wanted to work with the DDA collaboratively, not by directing the DDA. She wanted the city to be the entity that supports affordable housing. She didn’t want the city to tell the DDA “how to run their business.”

Briere responded to Kunselman’s remarks about the resolution being about “loyalty to the DDA” – saying she didn’t believe the vote is a litmus test on blind support for the DDA or not. She was disappointed by the direction the rhetoric had taken. Responding in part to Higgins’ question about why the light poles had suddenly become a crisis, Briere reported that she’s been nagging about the light poles for a year. City staff have said they don’t have it in the budget, she said. The Main Street Area Association asked the DDA if the DDA could pay for the light poles, and Pollay had responded by saying the DDA would have to find a way to pay for it, Briere reported. Briere stressed that the DDA is responsible for downtown infrastructure. For her, spending the money on infrastructure is the most important part of the DDA’s work.

Briere stressed the fact that the DDA’s housing fund is not specifically designated for affordable housing. She again rejected the idea that the vote on the resolution is a loyalty test.

Hieftje responded to Kunselman’s earlier remark by saying he didn’t disagree with everything Kunselman brought forward. Hieftje just wanted to make sure the light poles are fixed. He suggested a compromise, splitting the amounts between light poles and affordable housing.

Kunselman agreed to the split, saying it was a nominal difference anyway.

Lumm then proposed to divide the question on affordable housing and to vote separately on affordable housing and light poles. Hieftje responded to Lumm by saying that’s not what he was proposing to do.

The specifics of the compromise budget amendment resolution were to transfer $300,000 of the additional TIF to the DDA’s housing fund and to request that the DDA spend $300,000 on Main Street light poles.

Outcome: The council approved the DDA budget amendment, with dissent only from Christopher Taylor (Ward 3). After the vote, the council went into a short recess.

Leaf Collection

By way of background, leaf collection is now provided as part of the city’s containerized compost pickup program. Residents can place yard waste, including leaves, in carts – which can be emptied with automatic robot-arm-equipped trucks. The city also collects yard waste in paper bags.

In the past, the city invited residents to push their leaves into the street after they fell every autumn. The pickups occurred on a predetermined schedule, with each area of the city serviced twice per autumn. The city then used street sweepers equipped with pusher adaptations to pile the leaves together, and then used front-end loaders to load dump trucks with the leaves. Eliminating the loose leaf pickup program was originally estimated to save $100,000 a year starting in FY 2011. According to the city, it’s proven to save closer to $300,000 a year.

From left: Jane Lumm (Ward 2), Marcia Higgins (Ward 4) and public services area administrator Craig Hupy.

The solid waste fund is supported by a millage levied at a rate of 2.4670 mills. A mill is $1 for every $1,000 of taxable value. That millage generates roughly $11 million a year. The funds are used for compost collection, recycling collection as well as garbage collection. [.pdf of solid waste fund status]

Details of the resolution brought forward by Jane Lumm (Ward 2) were as follows: Use $395,000 of the solid waste fund balance to buy two street sweepers; use projected savings from reduced tipping fees and other expenses to cover the $311,000 annual recurring cost. The proposal also included the restoration of holiday tree pickup. It was essentially the same proposal she’d brought to the council last year, when it approved the FY 2013 budget. Last year in Lumm’s bid to have fall loose leaf pickup restored she was joined only by her then-wardmate Tony Derezinski and Mike Anglin (Ward 5).

This year, Ward 2 was again unified in its support – with recently-elected Sally Petersen substituting for Derezinski. Anglin was also consistent in his support. The effort picked up one other vote – from Sumi Kailasapathy (Ward 1). So Lumm’s attempted resolution was defeated on a 4-7 vote, but not before the council took an hour and 10 minutes to debate the issue.

Leaf Collection: Council Deliberations

When she introduced the amendment, Lumm described her attempt the previous year, as well as the technical details of the funding. She contended that for some areas of the city, taking away the service had been a hardship. She contended that loose leaf pickup is a basic service that residents reasonably expect the city to provide – especially in light of the fact that they pay a dedicated solid waste millage that generates over $11 million a year. The holiday tree pickup, she allowed, might not be considered a “core” service, but she felt that it’s a nice, convenient service that can be provided cheaply, for $26,000 a year. Bagging and mulching for some residents isn’t a feasible option, she said. So residents still wind up paying someone to haul their leaves away, which loses the economy of scale that the city could achieve, Lumm contended.

She allowed that there are risks to the fund balance of the solid waste fund. [In round numbers, of the $28.6 million solid waste fund balance, only about $8.6 is "available" for use. Up to $9.4 million in risk has been identified by city staff just to cover the cost of building a replacement drop-off station and to cover requirements of GASB 68, a new accounting standard that must be implemented starting in FY 2015.] But Lumm felt that using $395,000 of the fund balance was appropriate, characterizing it as 4% of the fund balance. The recurring cost was only 2% of the revenue brought in by the millage, she said. Lumm saw value in restoring the service.

After the amendment was introduced by Lumm, Anglin was first to be called on to speak by mayor John Hieftje. Anglin said that in certain areas of the city, leaf pickup is a problem. Ward 2 makes a contribution to the city with its plentiful trees, he indicated, through regulation of stormwater runoff and temperature regulation. He said he wanted to see the amendment approved and “see how it works out.” He said he’d continue to rake his own leaves and put them in the compost carts – because he lives in that kind of neighborhood. In a limited part of Ward 5, he said, there’s a similar problem to Ward 2 for leaf pickup. He cited the stress that the aging population feels about the situation.

Kailasapathy argued from the perspective of economies of scale. She stated that the role of a local government is to provide good services to its citizens. She compared privatizing a certain part of the leaf collection to school busing: If you eliminate school busing, a few children might walk instead, or a few might ride their bicycles, but most parents will drive their children in cars. She stated that it’s more efficient to pick up holiday trees all at one time, instead of thousands of people taking their individual trees to a drop-off point.

Petersen, Lumm’s wardmate, also said she’d support the amendment. She compared the leaf pickup service in its monetary impact to that of the service the city provided recently – on Feb. 28 – when a storm hit and brought down a lot of branches. The city’s effort to pick up storm debris after that happened had been extended to residents citywide, Petersen pointed out, not just to Ward 2 residents. The city was able to absorb that into the budget, and she felt that the city could absorb leaf pickup into the budget as well. Leaves would fall onto the street, whether the city picks them up or not, so she figured it made sense to try to pick them up and take advantage of the economies of scale.

Margie Teall (Ward 4) noted that she’d previously argued against continuing this kind of leaf pickup service. She noted that the city still provides leaf pickup, but it’s done differently now – with compost carts. She felt that the community’s values are in keeping the Huron River as clean as possible and in keeping the streets as clean as possible.

Responding to photographs that Lumm had circulated of piles of leaf bags, Teall said she was sorry that’s happening – but said she didn’t know why those leaves were in the street, because they were not supposed to be in the street. She noted that leaves can be raked every week and a few bags can be put out every week. “There are ways to do this.” She expressed concern about bike lanes – when leaves freeze in the street. She advised keeping holiday trees in your backyard for the birds. So there are ways to deal with the issue that don’t cost the city any money, she ventured.

From left: Sumi Kailasapathy (Ward 1), Sabra Briere (Ward 1), Sally Petersen (Ward 2) and mayor John Hieftje.

Teall argued against Petersen’s point about the city’s effort this year to pick up storm debris – by saying that if the city spends money on loose leaf pickup, it might not have the capacity in the future to implement pickup of storm debris as it did this year.

At Briere’s request, public services area administrator Craig Hupy and solid waste manager Tom McMurtrie came to the podium to field questions. Briere asked Hupy for an explanation of why the city had changed its policy. She reported she’d received emails from people that same day advocating for keeping things the way they were – with no loose leaf pickup. Hupy told Briere the change to the current system of containerized pickup originally had been advocated by those who were concerned about pollution loading to the streams, but that argument had never gained traction.

However, when the “Great Recession” occurred, the city was forced to look at it from an economic point of view, Hupy said. Using only the containerized approach had been expected to save $100,000, Hupy said. Now that the city has gained some experience with that approach, the city saves about $300,000, he said. Community feedback has been heard on both sides, he said. Some people miss being able to rake the leaves out into the street, Hupy said. Others say the streets are cleaner and neater. If he were asked which sentiment was more prevalent, he felt that unscientifically, the “cleaner streets” had it by a margin. But the reason for the change was the economic reality, he reported.

Briere ventured that the amount of compost collected has decreased as a result of the change in leaf pickup method. McMurtrie explained it’s been reduced in part because people mulch the leaves into their lawns or compost leaves in their backyards. Hupy also noted that the amount of leaves picked up by the city is measured by the ton. And when leaves sit in the street, they pick up moisture, making them heavier. When they’re bagged, they stay drier. So the staff believe, Hupy said, that less weight is being recorded on the scales due to drier leaves.

McMurtrie allowed that the tonnages have declined since the containerized program was implemented. He also added that there are seasonal variations. Briere offered an anecdote about a mother and her kids who now use a tarp to drag the leaves out to the back of the house into the woods.

Lumm asked about the private contractors who are now hauling leaves for people: Are they hauling the leaves to the city’s compost site? Yes, said McMurtrie. He noted that haulers are not being charged a tipping fee for bringing in the material.

Chuck Warpehoski (Ward 5) inquired about the quality of the composting product you get from a cart-based approach versus storing the leaves on the street for a while. He recalled reading in the city’s “Waste Watcher” publication that the advice to residents is not to put street leaves into their home compost. Hupy reported that the city has sampled the quality of the leaves. There’s not a difference revealed in the testing so far, he said.

Warpehoski’s question was motivated by the fact that the product resulting from the city’s composting operation is sold. Hupy said that nothing has triggered Michigan Dept. of Environmental Quality (MDEQ) regulations. Hupy indicated that the city’s concern was actually with the reduced amount of organic material that was swept up by street sweepers in the fall – because the leaves were not being swept into the street as a result of the leaf pick up program. So far things are ok, Hupy said. There’s one more round of sampling to be done this fall.

Chuck Warpehoski (Ward 5).

Warpehoski asked about an anticipated revenue shortfall in the city’s solid waste fund. It’s anticipated to come in FY 2016, he said. Later clarification confirmed that a $375,000 shortfall is projected for that year.

Warpehoski asked Hupy to comment more on pollution-loading issues. Hupy explained that back in the timeframe of the early 2000s, there was more concern about pollution loading, with a focus on phosphorus. Hupy indicated that the concern is at the level of TSS (total suspended solids) – the particulate matter itself, not necessarily the chemical makeup. Warpehoski referred to a letter that the council had received from Washtenaw County water resources commissioner Evan Pratt about the impact of sedimentation in places like the Sister Lake area. Hupy indicated that leaves on the bottom of such lakes don’t necessarily decompose. He ventured that the containerized approach would cause less sedimentation. Hupy also ventured that the approach of sweeping leaves into the street could lead to a detrimental effect on stormwater detention facilities – like the one at Pioneer High.

Stephen Kunselman (Ward 3) got clarification that the city sweeps the leaves that happen to fall naturally into the street. Residents aren’t asked to sweep those leaves. Hupy indicated that whatever falls into the street naturally is well within the capability of a street sweeper to handle. Kunselman described last winter seeing places where no sweeping had been done. He ventured that it’s just a guess as to the environmental loading. He felt it would be a great service if the city could provide the loose leaf collection. He also understood the environmental issues.

Kunselman’s statement “I don’t bag leaves by any means” prompted Warpehoski to kid him: “Do you burn ‘em?” This was a reference to a discussion the council had previously about the fees charged to residents for open burning.

Kunselman questioned whether there is now any enforcement against people pushing leaves into the street. Hupy said that people are given a door-tag notice. Kunselman said when he lived on Seventh Street near Pauline, he watched the neighbors push the pile of leaves down in front of somebody else’s house. “Have you ever actually issued a ticket?” Hupy told Kunselman he didn’t think so. The city had, however, made repeated “educational visits.” Kunselman concluded that enforcement is a cost.

Kunselman got clarification that the $311,000 recurring cost would be for two pickups in the fall. On the $395,000 one-time purchase cost for sweepers to push the leaves, Hupy also explained that the pushers the city had used in the past were modified with a blade for pushing. Renting wasn’t an option, because the rental companies would not accept the vehicles being returned with weld and burn marks on them from the necessary modifications. Kunselman indicated he was not sure how he would vote.

Mayor John Hieftje asked Hupy to explain the capital expenditures in the solid waste fund budget. Hupy described an expansion of two programs – residential recycling into multifamily residences, and the addition of food waste to the composting stream. A long-term goal is concern about the drop-off center at Platt and Ellsworth. It’s sitting on the old landfill, Hupy said, and it’s slowly becoming part of the landfill. One corner is sinking and will need to be rebuilt.

McMurtrie described discussions with Recycle Ann Arbor and other jurisdictions to see which of them might be willing and able to partner on construction of a new facility. In the coming months, he hoped to be able to bring forward some proposals. The draft solid waste plan needs to be approved by the council, McMurtrie indicated. After that, there can be some capability added for food waste composting. Hieftje asked Hupy and McMurtrie to confirm that there was, in effect, a plan to spend the fund balance in the solid waste fund.

Hieftje then explained that he’d be opposing the restoration of loose leaf pickup. He reiterated Teall’s point that the city still does pick up leaves – in compost carts and paper bags. Hieftje then described how he lives in a relatively leafy neighborhood, but is able to dispose of them with the compost carts and by composting them in his back yard.

Sumi Kailasapathy (Ward 1) and Mike Anglin (Ward 5).

Kailasapathy then inquired about the cost savings that were supposed to have resulted from a conversion to single-stream recycling. McMurtrie confirmed that collection costs have gone down, even with an upwards contract adjustment with Recycle Ann Arbor. But he allowed that revenue has declined. Two factors contributed to that. First, the market has dropped. And the material the city previously processed from Lansing and Toledo no longer comes to Ann Arbor, McMurtrie explained. That’s due to competition, he said.

Petersen then opened up a line of inquiry about alternative solutions to pushing the leaves into big piles, and asked about the possibility of using trucks equipped with large vacuums. She mentioned Cummins engines as the possible power plant for such trucks. [That's a reflection of employment with Cummins early in her professional career.] She wanted to know why the city can’t explore that kind of approach?

Hupy explained that “pushing and loading” is more efficient than vacuums. He explained that sticks, branches and pumpkins after Halloween get included in the piles that are put on the street, which clogs the vacuums. This has been demonstrated by vendors who’ve sought to sell the city on the idea of using large vacuums, but then discover that when the “pushing and loading” method is matched against vacuuming, the “pushing and loading” method has proved superior – to the surprise of the vendors.

Briere inquired if other options exist besides pushing or vacuuming. Responding to Briere, Hupy described a conveyer system as a possible alternative. Briere ventured that whatever method the city uses, it’s still labor intensive for her. She reported that of the various methods, she prefers bagging or putting leaves in the carts. About the current containerized approach, she keeps asking herself, “Is it broken?”

At that point Hieftje indicated that he was hoping the council could soon move to a vote on the question. However, Christopher Taylor (Ward 3) asked for a more detailed explanation of the impact that Lumm’s amendment would have on the solid waste fund.

Hupy reviewed Lumm’s list of cuts, which she proposed to offset the expense of loose leaf collection. The $105,000 reduction in tipping fees might or might not be achievable, Hupy explained. He indicated that street leaf pickup could have the impact of heavier loads, which based on his previous remarks would result from increased moisture. And that would cause increased tipping fees.

For the $14,000 in contingencies for field operations, those are step increases based on labor contracts if they progress in their skill levels, Hupy explained. The $25,000 in solid waste systems planning would take away from the consultant work to be done on an educational campaign. Hupy described the retirement of a person in the solid waste department who works on communication issues. The city is proposing that some of her work would be picked up by a consultant. The $15,000 in printing of promotional material would be for “Waste Watcher,” a publication that is sent out each year to residents. The $76,500 in other service budgets identified by Lumm as a source of savings is for equipment and contracted services – which he described as a difficult cut to make.

Teall then followed up on her earlier point about the storm debris collection this year. She asked how much the storm debris pickup cost earlier this year. Hupy reported that cost at about $375,000. The staff would be coming to the council with a request for an appropriation from the solid waste fund balance, Hupy said. Teall ventured that storms generating debris that might need to be picked up could be happening more frequently. Hupy allowed that if money had to be taken out of the fund balance, then it left less in reserves to deal with various issues.

Teall also highlighted the problem that in-street leaf collection had caused for streets like White Street, where there is parking on both sides of the street. It’s a student neighborhood where the vehicles aren’t moved frequently.

Lumm then defended the savings that she’d identified to fund the restoration of loose leaf pickup, responding to Hupy’s assessment of the impact of her identified savings. She gave a shout-out to the Ann Arbor Newshawks’ satirical treatment of the loose leaf pickup issue – inviting people to look for the video, which is posted on YouTube. She described living in her neighborhood for 35 years, saying that previously the leaves didn’t sit as long in the street before they were picked up. Eventually, she declared: “I think I’ve exhausted this topic.”

Hieftje reiterated his objections, based on the stress it would place on the solid waste fund, given the projection of a shortfall in FY 2016.

Stephen Kunselman (Ward 3).

Kunselman asked for a description of practices in comparative communities. McMurtrie listed off communities that collect leaves in a containerized way (Lansing, Ypsilanti, Beverly Hills, Hazel Park, Troy, Saugatuck, Plymouth Township, Douglas, Tecumseh), compared to loose leaf collection (Berkeley, Birmingham, Clawson, Ferndale, Huntington Woods, Oak Park, Pleasant Ridge, Royal Oak, Adrian, Midland and Holland).

Taylor stated that if the city could provide the service perfectly, he might have a different position – but he stressed “might.” Even with the city’s best efforts, however, he felt there’s no possibility the city would be able to perform the service well. “Leaves will not cooperate, rain and wind and snow will not cooperate,” he said. The costs are material, he said. The cost and benefit were not right for him, so he wouldn’t support the amendment.

Anglin then contended that the failure to provide this service targets those who take virtually no services from the city – the elderly. Even though their kids are out of school, they still pay school taxes, he said. They don’t use the parks, yet their taxes go to support that. The elderly are asking what they get from the city in the way of service.

The council should look at all the demographics of people and ask what services are provided by the city to them. The elderly feel they’re not being fairly treated, he said. The projected shortfall is just a projection, not a reality, he said. So Anglin indicated he’d vote for the amendment.

Warpehoski said he still wasn’t sure how he’d vote. He asked for more information about the financial impact of leaf pickup in the context of freezing weather. Warpehoski also asked about the impact of flooding due to clogged storm grates. Hupy said it’s more labor intensive to clear storm grates when the approach to leaf collection is to push leaves into the street.

Hieftje called on Petersen to speak, but Higgins offered a mild objection, venturing that the councilmembers were exceeding their allotted two speaking turns. Hieftje contended Petersen had a speaking turn left.

Petersen countered Taylor’s point about the ability of the city to perform the task well. She ventured that the city doesn’t do snow plowing well, either, but it’s still a basic service that the city should try to provide.

Kunselman then stated he’d vote no. He cited technological advancements that people can use to take care of their lawns: “Why anybody would vacuum their lawn I have no idea, but they do.” He didn’t want to base leaf collection policy just on the needs of the older population. They’d still have to rake their leaves or hire someone to do it, he said. He suggested that if the city were to provide the service, then some kind of subscription service might be best.

Outcome: The vote on the leaf collection budget amendment was 4-7, getting support only from Jane Lumm (Ward 2), Sally Petersen (Ward 2), Sumi Kailasapathy (Ward 1), and Mike Anglin (Ward 5).

Police Officers/15th District Court

Another amendment put forward by Jane Lumm (Ward 2) was to provide funding for three police officers, with $270,000 taken from the 15th District Court budget.

Lumm indicated that she’d been encouraged by the city council’s identification of public safety as a priority at its December 2012 retreat. She’d also been encouraged by a success statement embraced by the council that defined success in terms of police officers having 25-30% of their time available for proactive policing.

Lumm said the amendment was not meant to “pick on the courts.” She cited the court’s decreasing caseload as one reason to decrease the court’s budget compared to the previous year’s amount.

By way of background, Ann Arbor’s caseload downward trends are in line with the overall trend for other comparable courts [.pdf of caseload trends for 15th District Court]:

               Misdem       Civil Inf    Gen Civil
D15 Ann Arbor  3,109 ‐31%   13,894 ‐49%  1,742 ‐16%

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In her proposal, Lumm was comparing the FY 2014 request of $4,379,290 to the FY 2013 budgeted amount of 4,066,865. She reasoned that the $270,000 by which she was proposing to reduce the FY 2014 budget still left the court with more money than was budgeted in FY 2013.

Sumi Kailasapathy (Ward 1) compared 2002 and 2013 FTE levels across departments. The police department has been reduced by about 40%, she said, which was the most of any department. She wanted to restore FTEs. She pointed out that Lansing and Ann Arbor have comparable populations, but Lansing has 226 sworn officers. She allowed that Ann Arbor also has the University of Michigan campus police, but contended that Lansing does as well. She said it was an “apples to apples” comparison. She noted that Ann Arbor’s police force was effective on a reactive basis, but she wanted to make sure it was also able to be proactive, to enhance quality of life and a sense of security that Ann Arbor residents deserve.

Mayor John Hieftje pointed out that Lansing doesn’t have campus police, because Michigan State University is in East Lansing.

Keith Zeisloft, the administrator for the 15th District Court, was asked to come to the podium to answer questions.

Sabra Briere (Ward 1) asked Zeisloft what the impact would be of a $270,000 reduction. He replied that the court would need to look at the only area that’s not mandated by law – the probation department. He felt that a $270,000 would mean losing three of six probation officers. He felt that would mean the loss of the “eyes and the ears of the court.” Without probation officers, the judges would have less ability to sentence offenders in a way that was thoughtful and had any real meaning, he said.

Zeisloft also raised the possibility of impacts to the specialty court dockets: veterans court, sobriety court, domestic violence court, and street outreach court. He said the loss of probation officers could “severely cripple” those programs. The court would lose a probation officer who arrives at work at 6 a.m. every day to conduct preliminary breath tests. That ensures that participants in the sobriety court start the day sober. Zeisloft also pointed out that there’s a reduction in revenue that would come from probation fees. Reducing probation officers might reduce the recovery rate of fines, he said.

Chief financial officer Tom Crawford and Sumi Kailasapathy (Ward 1).

Kailasapathy highlighted the 49% decline in civil infractions – from 2007 to 2011. Responding to Kailasapathy, Zeisloft allowed that there’s been a dramatic decrease in the number of cases. In the last six months, however, there’s been a one-third increase in citations. He described how the workforce has also somewhat declined as the caseload has declined.

Zeisloft called the court “frugal.” Lumm responded by saying she had a different definition of frugal. She listed out increases in various categories.

Lumm and Zeisloft went back and forth about an executive secretary position that was restored last year. She told Zeisloft that historically, the 15th District Court has not met its budget reduction targets.

Then Lumm cited an average 9.6% pay increase given to court workers in October 2012, which was authorized by chief judge of the 15th District Court – Libby Hines. Zeisloft allowed that’s correct. But he pointed out that until then, the court employees had four-and-a-half years of a wage freeze, with a decrease in one of those years. Retention of workers had become an issue.

Zeisloft described how human resources had been asked to do a comparative analysis, and that some of the workers had been found to be dramatically underpaid – in some cases $10,000-$16,000 less than their counterparts in other courts. The increase brought them up to a competitive wage. He ventured that this “softened the blow” of a 9.6% average wage increase. Lumm seemed unpersuaded: “It doesn’t soften the blow for me.” She pointed out that the council had heard from the Ann Arbor Housing Commission director about her struggles with keeping her staff’s pay at a competitive level.

Kailasapathy pointed out that the wage increase given to court workers was an average of 9.6% increase – which meant that some workers would have received an even higher increase.

By way of background, this increase did not apply to judges’ salaries, which are reimbursed to jurisdictions based on state statute. However, the district courts in Michigan fall under the administrative orders of the state Supreme Court, and do not have complete latitude to set wages of their employees independently of their governing municipality.

From Administrative Order No. 1998-5, which applies to district courts, among others.

II. COURT BUDGETING If the local funding unit requests that a proposed court budget be submitted in lineitem detail, the chief judge must comply with the request. If a court budget has been appropriated in line-item detail, without prior approval of the funding unit, a court may not transfer between line-item accounts to: (a) create new personnel positions or to supplement existing wage scales or benefits, except to implement across the board increases that were granted to employees of the funding unit after the adoption of the court’s budget at the same rate, or (b) reclassify an employee to a higher level of an existing category. A chief judge may not enter into a multiple-year commitment concerning any personnel economic issue unless: (1) the funding unit agrees, or (2) the agreement does not exceed the percentage increase or the duration of a multipleyear contract that the funding unit has negotiated for its employees. Courts must notify the funding unit or a local court management council of transfers between lines within 10 business days of the transfer. The requirements shall not be construed to restrict implementation of collective bargaining agreements.

It’s not clear if the 15th District Court is required by the city of Ann Arbor to submit a “lineitem detail” budget.

Mayor John Hieftje asked Zeisloft to review the cuts that would have to be made. Zeisloft again identified non-mandated services – probation. He reviewed how three out of six positions would have to be eliminated.

Lumm pointed out that the cut would still leave a slight increase comparing the FY 2013 budget to the FY 2014 budget.

Hieftje asked chief of police John Seto to field questions. In 2011, Ann Arbor crime levels were at a record low, Seto reported. In 2012 there was a slight increase, but it was still relatively low.

Hieftje argued that 226 Lansing officers compared to the 179 in Ann Arbor – when you count UM campus safety officers – is comparable, when you consider the reduced crime in Ann Arbor compared to Lansing.

Briere said she sees both the courts and the police officers as safety services. We need the police officers but we also need the courts as well, Briere said.

Christopher Taylor (Ward 3) agreed with Briere that this amounts to a service cut. His focus was not the change in the budget from this year to last year, he said, but the amount of services those budgets could purchase. He didn’t think the three police officers who would be added would add to the actual or perceived safety in the community. The total city budget for FY 2014 reflects around 50% in support of safety services, so he felt the administrator’s budget reflected the council’s priority on public safety. He wouldn’t support the amendment.

Stephen Kunselman (Ward 3) asked where the court revenue goes. It’s based on a state formula, Zeisloft explained.

Kunselman ventured that there would be other ways to accommodate the $270,000 reduction besides laying people off. Zeisloft countered Kunselman by saying that the main costs of the court, like any governmental entity, is personnel.

Hieftje recited some statistics in support of the idea that Ann Arbor is safe. Hieftje indicated he’d be supporting the allocation of DDA budget funds for police in the downtown area. He didn’t think that the proposed budget amendment would have a net public safety benefit when it would have a negative impact on the probation system.

Lumm drew out the fact that in the last 10 years, the DDA hasn’t provided any money for beat cops. She did this by asking CFO Tom Crawford how much money the DDA had allocated for downtown beat cops. Crawford, who was visibly under the weather at the meeting, said he didn’t know off the top of his head. Lumm told Crawford it was a softball question. She’d previously submitted that question to staff, she said, and “The answer is zero.” [.pdf of memo from Crawford on beat cops]

Kunselman asked Hieftje how the DDA could provide recurring revenue to support downtown beat cops, when it can’t plan to replace light poles.

Susan Pollay, executive director of the DDA, traced the original parking agreement from 2005 between the city and the DDA as originating in a desire to provide support to downtown beat cops. A $300,000 allocation escalated to $1 million a year, she noted, but even that did not result in the preservation of beat cops downtown.

Kunselman objected to the idea that increases in parking rates might be used to fund police officers. He cited $1.20/hour parking in Pasadena, which he recently visited, compared to $1.50/hour in Ann Arbor.

Mike Anglin (Ward 5) wanted to send a message about support for public safety that would come from hiring more police officers.

Sally Petersen (Ward 2) observed that there seems like a lot of agreement that more police are needed downtown, but she wonders what that would mean for this amendment.

Kunselman indicated he’d support the amendment. He didn’t take the possible cut to three probation officers lightly but thought there could be other ways to deal with a reduced budget. He pointed out that the 15th District Court had a nice new building. And responding to Hieftje’s count of UM campus safety officers with the total number of sworn officers in Ann Arbor, Kunselman said the campus police don’t help Ann Arbor neighborhoods.

Outcome: The amendment to reduce 15th District Court funding by $270,000 failed on a 5-6 vote, getting support only from Jane Lumm (Ward 2), Stephen Kunselman (Ward 3), Mike Anglin (Ward 5), Marcia Higgins (Ward 4), and Sumi Kailasapathy (Ward 1).

Police Officer/City Attorney

Another public safety amendment was to allocate $90,000 of the recurring savings from the retirement of assistant city attorney Bob West to the police services area – to pay for an additional police officer. The recommendation associated with the amendment was to eliminate an FTE from the city attorney’s office for next year – that is, FY 2015.

In introducing the amendment, Sumi Kailasapathy (Ward 1) noted the attorney’s office has had the least amount of decline in FTEs over the last 10 years.

From left: Ward 1 councilmembers Sumi Kailasapathy and Sabra Briere.

Sabra Briere (Ward 1) seconded Kailasapathy’s amendment. But she offered a friendly amendment that specified the assignment of the saved funds simply be returned to the general fund. That is, the outcome of the amendment was simply to reduce the FTE count by one, without specifying that a police officer would be added. Briere was interested in staying consistent with the argument that she’d given against the 15th District Court budget reduction, which was based on the idea that she didn’t favor shifting funds between two positions that served public safety.

Kailasapathy appeared amenable to the amendment.

Then Jane Lumm (Ward 2) said she had been set to support the original amendment, but only because it would have added a police officer. Lumm knew from her experience serving on the liquor license review committee that West played a significant role in that. If it meant that West’s position would have to be absorbed with no hire of an additional police officer, Lumm would not support the budget amendment.

Faced with a choice between having Briere’s support or Lumm’s, Kailasapathy reverted to her original amendment – which specified that a police officer would be hired with the savings.

Christopher Taylor (Ward 3) asked chief of police John Seto to come to the podium. Taylor wanted to know if he’d been asked about this change. Seto indicated that the police department worked closely with West.

City attorney Stephen Postema explained that West did more in his job function than just prosecute civil infractions. Among those duties was the defense of police officers in lawsuits and the training of the officers. In contemplating West’s replacement, that person would take more time than West does to complete those duties, Postema said. It’s incorrect to say that the attorney’s office has been reduced less, he contended. He described going from 14 FTEs to 12 FTEs. He said that eliminating the position “willy nilly” would do a disservice to the police department and the city attorney’s office.

Outcome: The amendment to eliminate the retiring assistant city attorney position failed on a 2-9 vote. Only Sumi Kailasapathy (Ward 1) and Jane Lumm (Ward 2) supported it.

Affordable Housing

This budget amendment brought forward by Sabra Briere (Ward 1) tapped the general fund for $100,000 and placed it in the city’s affordable housing trust fund. She led off deliberations by saying that before she was elected to the council, the city transferred $100,000 every year into the city’s affordable housing trust fund. That practice had ended even as the city continued to spend money in the fund, she said.

Mayor John Hieftje hoped there’d be agreement and that the vote could be taken quickly. Briere called the $100,000 a modest amount. She said that in the context of the earlier discussion about altering the DDA’s budget to transfer $300,000 from the DDA’s TIF fund into its housing fund, she wanted the city to demonstrate that it, too, had some “skin in the game.” She wanted it to be a recurring amount each year, not just a one-time allocation.

Jane Lumm (Ward 2) said she wouldn’t support the budget amendment. She asked that her name be removed as a sponsor, saying that had been mistakenly attached. She supports affordable housing, she said, but did not support the amendment. She would prefer to use the increased DDA TIF revenues as the funding source for additional affordable housing support.

Sally Petersen (Ward 2) indicated that if Lumm’s name was coming off as a sponsor, that would leave room for Petersen’s name to be added as a sponsor. Like Briere, Petersen felt the city should have “skin in the game.” Affordable housing is one of the council’s priorities, she noted. One of the outcomes of the economic development task force, she said, was to help determine when support for affordable housing would come from the DDA and when it would come from the city. Until that could be done, both entities should have skin in the game.

Lumm reiterated that she supported affordable housing and also thought the city should have “skin in the game,” but stated that it matters where the “skin is found.” She felt the $100,000 should be transferred from identified savings, not simply by making an additional expenditure – saying that in this regard she was a fiscal conservative. She asked CFO Tom Crawford if he could identify $100,000 in savings. Crawford was circumspect: “Staff’s work is reflected in the city administrator’s recommendation.”

Hieftje ventured that early in his service as mayor, the city’s budget was such that $100,000 could be found somewhere. Now that the city is leaner, it’s not easy to find that $100,000, he said.

Marcia Higgins (Ward 4) indicated that she’d support the $100,000 transfer because the direction is for staff to find a way to put it in the budget every year.

Outcome: The $100,000 transfer from the general fund reserve to the city’s affordable housing trust fund was approved, with dissent only from Jane Lumm (Ward 2).

Washtenaw Health Initiative

This amendment, brought forward by Sabra Briere (Ward 1), was to allocate $10,000 to the Washtenaw Health Initiative (WHI), a countywide collaboration focused on how to make healthcare more accessible and improve care coordination for disadvantaged populations. It was meant to help prepare for federal healthcare reform.

The WHI is co-chaired by former county administrator Bob Guenzel and retired University of Michigan treasurer Norman Herbert, along with Ellen Rabinowitz, executive director of the Washtenaw Health Plan. The city joined the WHI on July 2, 2012. Washtenaw County is also a member of WHI.

Outcome: The council unanimously approved the $10,000 for WHI without debate.

Public Art Funding

The amendment proposed eliminating $326,464 in spending on public art. This anticipates possible approval of revisions to the public art ordinance. If the council enacts those revisions – likely on June 3, 2013 – it would require a subsequent vote with an eight-vote majority to restore the public art monies to their funds of origin.

By way of background, the current Percent for Art funding mechanism sets aside 1% from all capital projects, to be used for public art. Those monies are pulled from numerous funding sources, depending on how the capital project is funded. The ordinance revisions that are being brought forward would, if approved, eliminate the Percent for Art approach.

Chuck Warpehoski (Ward 5) questioned whether it’s possible to make this amendment, under the existing ordinance. Assistant city attorney Abigail Elias explained that the amendment continues the public art set-aside, but prevents spending it.

Christopher Taylor (Ward 3) indicated that he expects there’ll be a change in the public art ordinance, but until it’s changed he wants to stay the course and support the existing program. So he’d oppose the amendment.

Mayor John Hieftje concurred with Taylor’s reasoning.

Outcome: The vote on preventing the spending of the FY 2014 public art set aside was 7-4, with dissent from Chuck Warpehoski (Ward 5), mayor John Hieftje, Christopher Taylor (Ward 3) and Margie Teall (Ward 4).

Sidewalk Gaps

This budget amendment would tap the general fund for a one-time use of $75,000 to fund a sidewalk gap prioritization study.

Sabra Briere (Ward 1) asked why neither Act 51 money nor the sidewalk millage could be used for new sidewalk construction. Public services area administrator Craig Hupy explained that millage money is supposed to be used only for repair and maintenance of existing sidewalks. Act 51 is not for first-time improvements, Hupy said.

Citywide, there’s more than $25 million worth of sidewalk construction that could take place, Hupy explained. That’s why it’s important to prioritize.

Mayor John Hieftje said that reductions in transportation by the Ann Arbor Public Schools have highlighted where some of the sidewalk gaps are. Stephen Kunselman (Ward 3) noted that some neighborhoods have no sidewalks at all. How does that fit in? Hupy indicated that’s the reason the prioritization study is needed. Kunselman wanted to know if the study will be done in-house. Hupy thought it would require a fair amount of community engagement. So outside assistance would be tapped for that.

Jane Lumm (Ward 2) said she’s inclined not to support it, but probably will.

Mike Anglin (Ward 5) told Hupy that he’s glad conversations are happening between the city and AAPS.

Outcome: The council unanimously approved the sidewalk gap prioritization study.

Miller Manor Senior Meals

This amendment would replace $4,500 in funding lost due to federal sequestration for a senior meals program. Miller Manor is an Ann Arbor housing commission property.

Outcome: Without debate, the council unanimously approved the $4,500 for Miller Manor senior meals

Human Services

This item increased by $46,899 the amount of funding available for human services nonprofit entities. The city allocates this money through a coordinated funding process with the Ann Arbor Area Community Foundation, the United Way of Washtenaw County, Washtenaw County and the Washtenaw Urban County. The city has participated in this coordinated funding approach for three years now. Initially the agreement was for two years, and the partners extended for a year.

In introducing the amendment, Sabra Briere (Ward 1) noted that the total amount of funding allocated in the budget for human services nonprofits could change after this year. The additional $46,899 brings the amount to $1,244,629, which is the same as the last two years.

Outcome: Without discussion beyond Briere’s introductory remarks, the council unanimously approved the $46,899 increase in funding to nonprofits that provide human services.

Parks Fairness

Under Ann Arbor city policy policy, the general fund allocations to parks and recreation must not suffer any decrease beyond what other areas in the general fund do. So in the course of making amendments to the other parts of the budget, that can have implications for adherence to this policy.

At the end of all the amendments, financial services staff provided the council with the adjustment that needed to be made to the parks budget, in order to comply with the policy. This year, that amount is an increase of $22,977.

Outcome: The council approved the “parks fairness” adjustment without debate.

FY 2014 Budget Deliberations

Jane Lumm (Ward 2) explained why she’d be opposing the budget again this year, like she did last year. She contended that this year’s budget makes no progress toward making public safety a priority.

Stephen Kunselman (Ward 3) understood Lumm’s position, but said that politics is the art of compromise. He’d seen a lot of compromise that night. He pointed to the small increases in the number of firefighters. [This was an increase by four firefighter positions compared to FY 2013, but the positions had been added after the FY 2013 budget was adopted.] He pointed out that there’s no longer a plan to close fire stations, which he counted as progress. Kunselman said he believes in patience and putting his shoulder to the pile, as in rugby, and pushing toward a score.

Marcia Higgins (Ward 4) as well as other councilmembers thanked staff for their hard work in preparing the budget. Sabra Briere (Ward 1) said she wouldn’t vote against the budget because she has to “own it” even if she doesn’t like every item in it.

Outcome: The council voted 10-1 to approve the FY 2014 budget. Dissenting was Jane Lumm (Ward 2).

Present: Jane Lumm, Mike Anglin, Margie Teall, Sabra Briere, Sumi Kailasapathy, Sally Petersen, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Chuck Warpehoski.

Next council meeting: Monday, June 3, 2013 at 7 p.m. in the council chambers at 301 E. Huron. [Check Chronicle event listings to confirm date]

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FY 2014 Ann Arbor budget box. (Chronicle illustration using city of Ann Arbor budget summaries.)

That hypothetical was part of an April 2 conversation between Powers, chief financial officer Tom Crawford, and Chronicle editor Dave Askins. The focus of the conversation was to confirm and clarify some of the ideas that have been expressed at the city council’s budget retreat and work sessions over the past few months.

Announced by Powers and Crawford at the most recent council work session, on March 25, is the fact that the budget proposal is now essentially “inside the box” – meaning that it falls within the parameters imposed on Crawford by the city council’s adopted fiscal discipline priority. [.pdf of general fund budget summary as of March 25]

The tentative summary of the general fund budget calls for recurring general fund expenditures in FY 2014 of roughly $80.8 million, with $83.6 million in expenditures the following year.

Until March 25, the draft two-year plan had called for expenditures that would have left the city’s general fund unrestricted balance at $13.1 million (16.1% of operating expenses) and $9.7 million (11.5%) for FY 2014 and FY 2015, respectively. In the second year of that plan, the 11.5% left the city well short of the 15-20% currently recommended by Crawford, even though it’s within the 8-12% mandated by city policy.

But on March 25, the revised budget proposal called for unrestricted fund balances of $13.8 million (17%) and $12.1 million (14.4%) for the respective years.

Also up to March 25, the budget proposal had called for a two-year deficit of $252,000 for a specific subset of line items – which included recurring revenues, recurring expenses, recurring new requests and one-time requests. That’s a number that Crawford wants to balance for the two-year plan, even if it doesn’t balance in any one year. On March 25, the new figure was positive at $699,000 – or almost $1 million better than the original proposal.

The conversation between Powers, Crawford and Askins is reported below in more detail.

Pulling out some highlights, the discussion confirmed that this year’s budget won’t include a significant re-thinking of service delivery. Greater efficiencies and improved service could result from taking advantage of opportunities as they arise, but the recent departure of IT director Dan Rainey is not seen as an immediate opportunity for that kind of efficiency  – say, through a further merging of the Washtenaw County and city IT operations. Rainey’s position will be filled. With respect to IT in general, the telecommunications component of the staff’s draft economic development work plan – referred to as “fiber optic to the premises” – is still so conceptual in nature that the question of funding hasn’t been explored in detail.

Communication to the public from the city – in the form of reliable, consistent information about police and fire incidents – is a key part of the council priority that Ann Arbor feel (and be) safe. Related to that priority, the city administrator appears receptive to the idea of a data feed produced by the city containing all the police and fire calls. He indicated that a survey of citizens on attitudes and experience with public safety, as well as a range of other topics, is likely to be included in the FY 2014 budget.

With regard to a tentative proposal to remove funding for re-use of the city-owned 415 W. Washington site, it appears that the change was purely a function of a desire to get the budget “into the box.”

Priority One: Budget Discipline

Askins: I just wanted to start with the very first council priority [budget discipline] and the work plan associated with that – that’s the one that I would characterize as sort of “magnificently boring.” [.pdf of 2014 draft priority area work plans] So it’s basically keep doing what we’ve always done with respect to identifying efficiencies as they come up: We’re not looking to radically rethink the way we’re delivering services this time around. That might be for an off year in the future. But essentially we’re going to continue to exercise our usual good sense with respect to being good stewards of the taxpayer dollars?

Powers: Yes. And continue to review and work on opportunities where services can be delivered differently with the outcomes being: better service, less cost, or both. Opportunities for cooperation with other local governments, for example. The point that was made at the work session is that we don’t have any [additional efficiencies] currently on the shelf, that the staff is actively pursuing. And that was the reason for us calling that out – to make sure that the council understood that. If there were a different direction provided to staff [by the council], we could certainly be more aggressive in pursuing those opportunities.

I don’t know if we would be successful, because as I think Tom [Crawford] articulated very well, those opportunities and those initiatives take time, and for them to be lasting, for them to be sustainable, they really need to make sense for all parties – and not be a forced arrangement that may bring some temporary savings, some temporary benefits, but then fall apart because it really wasn’t built on a solid foundation. Dispatch, for example, I think will last – because it made sense, or if it’s sharing a service, then that lends itself to merge a multi-jurisdictional type of delivery. [Police dispatching for the Ann Arbor police department is now outsourced to the Washtenaw County sheriff's office.]

Askins: But my understanding of the conversation at work sessions is that this year the path to identifying those greater efficiencies is not going to come from the arbitrary imposition of some reduction targets, just to see what the various departments can come up with.

Powers: Correct.

Askins: I think [Ward 2 councilmember] Jane Lumm expressed some frustration about why aren’t we doing that. Why aren’t we identifying some reduction target to hit – because we should always be reducing by some amount to see what the departments come up with in response to that? So it’s my understanding that the push for greater efficiencies and improvements in services will not come from an across-the-board “let’s reduce” but rather from being judicious, and in taking advantage of opportunities when they come up. So, we didn’t anticipate that the set of events would necessarily unfold, but now that they have, we have an opportunity to do something.

Powers: Correct.

IT Operations

Askins: My actual specific question in connection with this issue relates to IT director Dan Rainey’s departure: Does that represent an opportunity to capitalize on the already existing collaboration that the city has with Washtenaw County, with respect to IT?

The city and county share data servers, and there’s some sharing of staff already. There are specific initiatives, like GIS mapping, that happens in collaboration with the county and the city – with fantastic results, from my vantage point. … I don’t think anybody was sitting around saying, “If Dan would only leave, then we could implement some further thing.” But given that he has left the city, does that represent an opportunity to say, Okay, we didn’t necessarily plan for that to happen or even hope for that to happen, but now that it has happened, let’s look at maybe further consolidating IT operations with the city and Washtenaw County? [Crawford has assumed the role of interim director of IT. When former city administrator Roger Fraser left the city, Crawford served as interim of that position, too, until Powers was hired.]

Powers: I am looking at the interim director!

Crawford: At this time … our organization is sizable enough, with unique enough needs, that we are presently planning to seek to fill the position – with the expectation that we continue these productive and mutually beneficial efforts that have been started [with the county].

Askins: Do you have any idea at this point whether that would be an internal hire, or an external hire, or what the timeline would be?

Crawford: I hope to have the position [posted] by the end of the month. It would be posted internally and externally.

Askins: It’s my sense that you already have plenty to do.

Crawford: Yeah, I am not looking to hold onto this long! Fortunately, we have a talented group that can sustain it for the interim period.

Fiber to the Premises

Askins: In connection with IT, and it might be that this is only thematically linked and has no actual practical connection here to real life, but IT shows up in the work plans – in my mind at least – in the form of the economic development piece. Residential fiber is on the list. [It's actually characterized on the list as "fiber to the premises."] In my recollection of the fiber initiative, when Google was offering their program and the city of Ann Arbor applied … former congressman Wes Vivian came and addressed the city council and he said, Listen, if Google doesn’t do this for us, we have got to figure out a way to do this for ourselves. It’s that important.

So what’s your sense of that work item? Are you getting any clear direction from the city council on that? Left to your own devices without any direction from the council, is that something were you would say, Yes, that’s something that really is important that we should pursue, and it’s just that we have to get a way to pay for it?

Powers: That is very important, and I think it’s part of place-making, part of having an environment that’s conducive to businesses and residents choosing to locate in Ann Arbor and stay in Ann Arbor. It’s also an example of the strategic cooperation that I think your earlier question was referring to in the first work area that you described as “boring.” But certainly that partnership with others is a key to having it feasible for us – because I don’t see it as something we could do on our own. It has to be in partnership with others. Our next step at a staff level will be to develop that action item into a more specific recommendation or proposal for the council to consider – and we are not at that point yet. Is there anything you want to add to that, Tom?

Crawford: “Fiber to the premises” is probably a better description than “fiber to the home.” … I think that’s what you’re seeing occurring in different cities. That means it doesn’t pick up just residences, but also businesses. Google is going into the home with their stuff. What you’re seeing other people do is going to the curb – just so you are aware of the distinction. It means different things to the business case and it means different things to the end user and potentially to the community, depending on whether they care about houses versus businesses.

Askins: So in terms of a possible funding sources, at least for the downtown area I would think of the Ann Arbor Downtown Development Authority and the Local Development Finance Authority. And specifically the LDFA, because that’s actually in one of its foundational documents, where it references telecommunications investments as an eligible expenditure. I’ve haven’t checked in recently to see what the LDFA’s finances look like. But the last time I checked in, there was some interest expressed on the LDFA board to make sure that the LDFA was not holding on to excess funds but was actually spending them. The sentiment was: You know, we’re not a savings account. If it’s 15% minimum fund balance that we have to keep, then we keep 15% and not more. [Crawford sits on the LDFA board in a non-voting, ex officio capacity.]

Crawford: That is still fair [to characterize LDFA board sentiment that way].

Askins: And so people were sort of saying: Hey, what about a wet lab? If we have the money, we should be spending it on something – so maybe a wet lab. When I was sitting in that meeting … I was thinking: Wet lab? How about fiber?

Crawford: You asked about funding and that’s relevant when you have an idea that has matured to the point where funding becomes an issue. I don’t think we have a concept that is that mature yet.

Askins: So it’s not even to the point where we have to figure out how to pay for this, because there is no “this”?

Crawford: Well, the [budget] proposal that the LDFA has for this year has not got anything like that included. … If you want to talk concept, yes, then the DDA is a possibility and the LDFA is a possibility. But there are so many steps it’s got to go through. Should public funds be involved? If so, in what way? Those questions have to be addressed. I’ve looked at various alternatives of possible funding for a concept, and I think we will continue to do that.

Askins: The third funding possibility I was thinking of is the cable licensing fees. Currently, by ordinance that has to go to community access television or communications for the city. Communications is a fairly general concept – right now I think it funds 1.5 FTEs – so that’s Lisa Wondrash’s position and Joanna Satterlee’s. My understanding, though, is that you could – or rather, the city council could in its wisdom – change the ordinance to direct cable licensing fees to allow for some other use  … For example, for the sake of argument, the ordinance could be changed so that half of the revenues have to go to community access television and communications, and half could be available for telecommunications-related infrastructure. Just conceptually.

Crawford: I’m aware of that conceptually.

Public Safety Communications

Askins: Related to communications, communications are an integral part of the work plan for public safety – the idea that success looks like this: We perceive the community to be a safe place. One of the action items involves communications, making sure that people have a reliable and accurate information source on which to form their perceptions.

Crawford: And we also have the survey that we’ve talked about.

Askins: At the work session it seemed to me like the idea of doing the National Citizens Survey resonated with the council? [.pdf of 2008 Ann Arbor National Citizens Survey]

Powers: Me, too.

2007-2008 National Citizens Survey Ann Arbor: Public Safety

2007-2008 National Citizens Survey Ann Arbor: Public Safety Benchmark Results

2007-2008 National Citizens Survey Ann Arbor: Reported Crimes

Askins: With the proviso from councilmember [Chuck] Warpehoski that he didn’t just want to do a survey, without saying in advance what we would consider to be good survey results. We don’t want to do the survey and then have people arguing about what it meant – which we will do anyway, of course. But I think that his thought was: We need to decide what success would look like in terms of the survey. Have you given any thought to what success would look like?

Powers: Not yet.

Askins: From my vantage point, I would say, the last time we did it was in 2008 with comparative data for 2007. So this time around I would expect that we would do at least as good or better than the last time around. Whether that’s reasonable or not, I think that’s the expectation that the community will have.

Crawford: Really? That’s an interesting assumption. That was the start of the great recession, with a lot of changes in the world. And a lot of reductions in police nationwide.

Askins: I’m not saying that’s necessarily a reasonable assumption, but I’m saying that this is the expectation I would predict for this community. You know Ann Arbor is a place where it’s always “better, faster, stronger,” so if we did a survey in 2008, and if the percentage of people who feel safe after dark was – let’s say for the sake of argument – 79%, it had better be 79% or above this time around. Or else people will conclude: Well, that just goes to show you that the reduction in police officers had a negative effect. That would be my prediction. I’m not arguing that position. And then there are the benchmarks that are built into the survey itself for the communities. And I would think that for Ann Arbor it would be automatic and axiomatic that of course, we will be better than the benchmark for all categories across the board. That’s just the expectation in the community.

Powers: And if council agrees with the recommended budget, I’ll be very interested in the results of a survey that would allow us to accurately and comprehensively compare Ann Arbor to benchmarks. The interesting discussion could very well be around the benchmarks and our definition of success. I think the problem and success statements from the council developed are a very good start and a nice foundation. And I think the next discussion around those would be that the council considers what questions to ask. For me, a helpful outcome will be: How well do we do, compared with agreed-upon benchmarks.

Askins: But the survey already does supply benchmarks. The results, if you scan through them, scores the outcomes for Ann Arbor … it’ll say it’s above or below the benchmark of other communities. … If we agreed as a community in advance – that we’re willing to say that Ann Arbor is perceived as a safe place if we’re better than the benchmarks measured in this survey – then we’d have a consensus that if we meet that, then the city will have achieved success as council has defined it.

Powers: By one measure.

Askins: One of the action steps for perception of public safety was media articles talking about the successful conclusion of criminal investigations. So as residents of the city – just imagine that you are living in a city and not working for the city: What kind of crime/police coverage would you want to read? Let’s imagine that Ann Arbor had a daily newspaper and a section called “public safety.” If you were the editor of that publication, what kind of thing would you put in that public safety section? I mean, it would be great, right, if every day it was “No Crime, Again Today!”

Powers: I’m kind of leaning the other way – and say ideally it would just be like the daily activity log. The activity log that generated an actual dispatch call or some recordable event. Whether that is realistic for a community our size, I don’t know. For my own personal experience, family experience, that would be of interest to my family – that level of minutia.

Crawford: Kind of like an RSS feed of the calls?

Powers: Yes. I think what chief [of Ann Arbor police John] Seto was thinking in the action items would be: consistent reporting, helped by the city through providing the information. It would be a consistent reporting on the crimes and activities that do generate community and resident interest – as measured by not only our experience, but more importantly as measured by the phone calls and e-mails we receive. And the same types of input that councilmembers receive from constituents. Graffiti, for example. I think the higher profile cases do generate some media coverage – the breaking-and-enterings, the assaults. I think chief Seto recognizes that we need to be taking more responsibility as an organization for sharing the information.

Even with our communications staff, I think we tend to not really share the good work that is done by our employees, and that is being done by the police officers. We just say: That’s part of why we are here – an occasional thank you will suffice, thank you very much. We don’t do as good of a job as we should be doing in sharing the good work and the results of that good work with the community – either through the media, or through the city council, or through our own press releases.

Askins: Let’s go back to the part where you talk about the data feed of just the activity log and the reports.

Powers: It could be a version of [The Chronicle's] Stopped.Watched. Maybe Stopped.Called.?

Askins: Well, to some extent, though, the city already does push information like that out in the form of the … it’s the mapping thing.

Crawford: The website is crimemapping.com.

Askins: That’s already a huge step in that direction, I think. So what I’ve been doing since it launched … is routinely downloading everything. [The site provides data for just the most recent six months, on a forward-moving window.] So we’re getting to the point where there’s two years worth of data. So instead of putting my energy into rewriting city press releases … I can plot by month incidences of property damage against temperature. So that would be the kind of work that I could do as a journalist – analysis of trends as opposed to the daily business of telling people about all the “mayhem” that is happening, when in reality it’s not really mayhem, but just a lot of routine stuff. …

Ann Arbor Reported Incidents March 2011-March 2013: Malicious Destruction of Property plotted against Temperature (Data from crimemapping.com and wunderground.com; chart by The Chronicle)

Ann Arbor Reported Incidents March 2011-March 2013: Malicious Destruction of Property (Data from crimemapping.com; chart by The Chronicle)

Ann Arbor Reported Incidents March 2011-March 2013: Home Invasion Forced Entry plotted against Temperature (Data from crimemapping.com and wunderground.com; chart by The Chronicle)

Askins: So back to this idea of just a data feed. How close would you be to implementing something like that?

Powers: I don’t know. You should ask the IT director!

Crawford: I don’t know either.

Askins: … I would love to be able to just offer readers a display of the standard data feed for the city of Ann Arbor for crime calls and the same for fire calls. So that you get reporting on 100% of fire calls and 100% of police calls.

Crawford: There’s a lot of calls we would have to assess: Are they real or not? … I mean as far as trying to conclude that there is actually an injury or an incident. A lot of calls, to be honest, might just be a cop calling in to get information. … It’s more complex than what’s on the surface.

Powers: What I said was meant to be more the external calls. Someone calls in about kids skateboarding in the parking garage, or suspicious youth near a dumpster and they think it might be graffiti. That’s what we’d share.

Askins: The follow-up piece would be when that incident is resolved, you can imagine a separate sharing of information by the city that this is how it was resolved. And you can go back and link to the original item in the feed. And you start to get a sense of what is normal and what is routine. There’s a certain amount of just background noise that’s happening – whether it’s kids acting up, or vehicles getting broken into, or people getting assaulted, I guess.

But typically what you see is only sort of the dramatic thing, the thing that is meant to scare you or make you concerned, and you get the impression there is bad stuff happening all the time. And it’s just that there is tons of stuff happening all the time, but a range of it.

Powers: Whether there is an objective survey with benchmarks or whether it’s providing the data, my point is that we’re going to be consistent. We’re not the ones alarming or minimizing threats and risks and dangers. If the council chooses, or if individual councilmembers choose to do that, that’s their decision. But from a perspective of the work plan, from the perspective of trying to help council move forward with their success statements, we see providing good comparison data as well as providing good data on activity and outcomes as very important to accomplishing that work plan.

415 W. Washington

Askins: So you mentioned that your perception at the work session was that the citizens survey had resonated with councilmembers. And I think that anybody who was watching the work session would agree that councilmembers seem like they’re interested in pursuing that.

On a different topic, at the work sessions at least, I didn’t really see any explicit discussion by the council – or body language or anything – on the capital budget allocation for reuse of 415 W. Washington [a city-owned property with with one large building and a few smaller structures, as well as an area currently used as a surface parking lot in the city's public parking system.] But that item got revised [between March 11 and March 25, so that the $650,000 originally included in the city's capital improvements plan for reuse of the property has been removed from that year's capital budget.]

So how would that – I would not call it a decision, yet – but how did that tentative proposal evolve? Was that councilmembers conveying their thoughts to you privately? Or was it the result of the physical testing that was done on the property?

Powers: It’s not done yet. So, no on the physical testing. … That project is a good example of Tom primarily – and … Craig Hupy [public services area administrator] – really working hard with discipline to accomplish the success statement that he was given as a part of his budget and financial responsibilities. And specifically, that was to get the fiscal year 2014 and 15 “into the box.” He been sharing with me some earlier drafts of the budget summary and we weren’t “in the box.” … As we came up to the day on March 25, he said, Hey, Powers, we’re really close – what do you want to do? We met with Craig Hupy, and this project was one where there’s some room to help us get into the box. And that’s what we shared with the council that evening. …

In hindsight, I didn’t take the opportunity to communicate it to council – that this is still a fluid project. Perhaps literally – if we get the report back saying that there is water six inches beneath the floor! But it was based on what we know today to help accomplish the fiscal discipline goal. … We also had a discussion with Hupy, about how we have these two properties … 721 N. Main and 415 W. Washington. And as we need to prioritize and focus our resources, as we need to start moving forward … on these parcels and properties that are surplus to the city’s needs, let’s start that through the budget – prioritizing where would I put our resources. That’s where we ended up with 415 W. Washington [not budgeted for reuse in the capital budget].

What’s Next

On April 15, the city council’s second meeting this month, Ann Arbor city administrator Steve Powers will be submitting to the council a proposed budget for fiscal year 2014. The council will have until its second meeting in May to make any amendments. This year that meeting falls on May 20. Those deadlines are set by the city charter. The 2014 fiscal year starts on July 1, 2013.

Through the spring the council has held a series of work sessions on the topic of the FY 2014 budget. It’s been decided that a possible additional city council budget work session for April 8 will not be scheduled.

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