The County Annex building at 110 N. Fourth was built in 1904 and houses several county units, including the public defender's office, the office of community and economic development, Project Outreach (PORT) and the Washtenaw Housing Alliance. Total annual operating costs were $407,206 in 2010. (Photos by the writer.)

The Washtenaw County board of commissioners were briefed on these plans at their most recent working session by Greg Dill, infrastructure management director. The March 8 briefing included an update on information technology infrastructure, which Dill also oversees.

Washtenaw County owns about 1 million square feet of building space and about 62 miles of fiber network. Building operating costs in 2010 – the most recent data available – totaled $9.979 million, including $1.62 million for utilities and $965,800 for security, primarily at the county courthouses.

Dill told commissioners that the goal is to be more strategic about the use of facilities, in part by maximizing occupancy at county-owned buildings and minimizing the amount of leased space. The county pays about $500,000 annually for two major leases in the city of Ypsilanti, both used for Michigan Works workforce development programs: at the KeyBank building at 301 W. Michigan Ave., and at 300 Harriet St. on the south side of town.

The space plan Dill and his staff are developing includes making better use of the county’s Zeeb Road facility, which has been partially vacant. In the short term, offices of the Washtenaw Community Health Organization will move there, freeing up space in their current location – at 555 Towner in Ypsilanti – for possible use by the workforce development programs. In the long term, the Zeeb Road site might be the future home for 911 dispatch operations, which the county recently consolidated with the city of Ann Arbor.

Two other properties are being evaluated for possible sale: (1) the vacant building and land on Platt Road, site of the former juvenile justice center; and (2) the Head Start building at 1661 Leforge in Ypsilanti. The county is relinquishing the administration of Head Start later this year.

Dill also talked about his goal of cutting annual operational costs by $1 million, through a combination of eliminating leases and creating energy efficiencies – migrating to LED lights, for example. Efforts to cut energy expenses were supported by several commissioners, as was the plan to hire an energy manager for the county. Commissioner Leah Gunn noted that several years ago the county had invested heavily in what’s known as the Chevron project, a multi-year contract aimed at cutting energy costs. She asked for an update on the effectiveness of that effort, which Dill said he’d provide.

County Infrastructure: An Overview

Greg Dill, infrastructure management director, has been working with his staff for several months on a space plan for  county operations. The March 8 briefing was his first formal report to the board since he was appointed to this position in September of 2011, overseeing the county’s facilities and information technology infrastructure. Dill is also part of a recently approved cross-lateral team of four top managers who report directly to county administrator Verna McDaniel and handle responsibilities previously assigned to the deputy administrator, a currently unfilled position.

Washtenaw County owns about 1 million square feet of building space and about 62 miles of fiber network. Dill told the board that since the early 2000s, the county has focused on adding capacity. Their building infrastructure has grown 25% since then. Now there’s more space than the county needs, he said. [link to .pdf map of county-owned and leased facilities][link to .pdf of detailed building inventory]

Dill also noted that facility considerations haven’t been part of the budget planning process, and the commissioners – as policymakers – haven’t received much feedback about that part of the county’s operations. “We hope to change that,” he said, with a charge to align the county’s infrastructure with the board’s policy direction, with internal and external stakeholders, and with declining financial resources.

The county needs to take a strategic approach to its infrastructure planning, Dill said, using a data-driven process that’s in line with the county’s broader goals. The approach needs to look at all infrastructure, including technology like computers, software, and both the wired and wireless networks.

There are opportunities for cost savings, he noted. Building operating costs in 2010 totaled $9.979 million, including $1.62 million for utilities and $965,800 for security, primarily at the county courthouses. The ability to find savings – in cutting energy costs, for example – will free up those financial resources to be used elsewhere, Dill noted. The county will be hiring an energy manager to focus on that effort, he said.

Dill outlined several initiatives for 2012, including a comprehensive building space plan; completing renovations at the downtown Ann Arbor courthouse; determining the future of the former juvenile justice center on Platt Road, which has been vacated; and enhancing security for the county’s technology systems, which is becoming a “nightmare,” Dill said.

There are several goals in developing a comprehensive building space plan, Dill said. He hopes to maximize occupancy at county-owned buildings, and minimize the amount of leased space. The county has two major leases in the city of Ypsilanti, both used for Michigan Works workforce development programs: at the KeyBank building at 301 W. Michigan Ave., and at 300 Harriet St. on the south side of town.

Other goals include finding cost savings, taking advantage of departmental consolidations or collaborations to make changes in infrastructure, and improving the delivery of county services to residents.

Greg Dill, standing, is Washtenaw County's infrastructure management director. Other staff members (seated, from left): Dave Shirley, operations and maintenance manager; Andy Brush, IT director; and Tom Fielder, technical operations supervisor.

The space plan under development focuses on four county “campuses,” Dill said: (1) the eastern campus, primarily 555 Towner, (2) the downtown Ann Arbor campus, including the Annex building at 110 N. Fourth, (3) the western campus, including the 705 Zeeb Road service center, and (4) the southern campus, including the former juvenile justice center at 2270 Platt.

There are two major leases on the eastern campus, he said, which are significant in terms of contract price. [Dill did not name those locations and did not mention the lease amount in his presentation. The building inventory report identifies the leased space as the KeyBank building at 301 W. Michigan Ave. and the 300 Harriet St. facility. Respond to a follow-up query from The Chronicle, corporation counsel Curtis Hedger provided more details about the leases. The KeyBank lease is $285,000 annually, and ends July 30, 2012. The Harriet Street lease runs through Oct. 31, 2014 at $150,000 annually, plus an $80,000 annual charge to cover taxes, trash, janitorial, utilities and other expenses.]

Dill told commissioners that he hopes to find space for programs within existing county-owned facilities – there are buildings that are under-utilized at this point. Ideally, he said, vacancy should be at about 80%, which would allow for sufficient flexibility to accommodate growth and restructuring.

In 2012, the space plan will include relocating the office of community and economic development (OCED), which was recently formed as the consolidation of three separate departments. Decisions will also be made about the former juvenile justice facility at 2270 and 2260 Platt Road, which includes a vacant 42,320-square-foot building on 10 acres of land.

In addition, staff of the sheriff’s office will be moving from the correctional facility at 2201 Hogback to the nearby 4101 Washtenaw facility, where offices for the sheriff’s Community Corrections division are located.

Major changes will also occur this year at the Zeeb Road building in Scio Township, Dill said. The office of the water resources commissioner – Janis Bobrin and her staff – will move from the second floor to the first level. That will allow the Washtenaw Community Health Organization (WCHO) to move into the second floor.

The Zeeb Road building would also be a perfect place for combined dispatch services and emergency services, because of the I-94 freeway access, Dill said. And there’s space available for special vehicle storage at that site as well, he said. Those possibilities will be explored in 2013 and beyond.

Also in the intermediate term is the status of the county-owned Head Start building at 1661 Leforge in Ypsilanti. Built in 2003, the 17,500-square-foot building on 10 acres of land is tied to the early childhood program, which the county has managed for four decades but is relinquishing later this year. Dill said the county needs to start making plans for the disposal of that asset, in case that’s the decision that the administration and board make.

Looking even further ahead to 2015 and beyond, Dill said he plans to take a strategic look at the county’s parking needs, the 14A District Court in Saline, and energy/sustainability issues, among other things.

Dill also reviewed goals for the county’s technology plan, which includes reducing long-term operating costs, and increasing reliability. Network security will remain an important priority. He noted that the county’s 62 miles of fiber network, connecting all of the county’s major campuses, also creates opportunities for collaboration and possible revenue, with other entities leasing the network. Dill estimated the county would see a return on its tech infrastructure investment within nine years.

Dill concluded by noting that the next steps for the space plan include incorporating the board’s feedback, and continuing to address identified priorities. He told commissioners that he plans to return to give regular updates at future working sessions.

County Infrastructure: Board Discussion

Commissioners asked a range of questions regarding the county’s infrastructure. This report organizes the discussion by topic.

County Infrastructure: Board Discussion – Departmental Moves

Conan Smith asked for more details about departmental moves that are already in the works. Dill explained that at the 705 Zeeb Road building, the staff of the water resources commissioner will move from the second to the first floor. The Washtenaw Community Health Organization (WCHO) will move into the second floor, relocating from their current offices at 555 Towner in Ypsilanti.

The Washtenaw Area Transportation Study (WATS) will relocate from the Zeeb Road building, where it leases space from the county, into another county facility – most likely the Annex building at 110 N. Fourth in downtown Ann Arbor. Administrative staff for the office of community and economic development (OCED) will likely move out of the Annex to the Learning Resource Center at 4135 Washtenaw.

With WCHO leaving the 555 Towner building, it frees up space there for the possibility of the workforce development staff to move out of leased offices and into Towner, Dill said.

Smith asked whether these relocations took employees into consideration, in terms of their travel to work. Dill replied that his staff works in partnership with other departments in looking at these space options, trying to take a holistic approach. If the moves are as strategic as possible, he said, that will minimize the need for future relocations.

Smith noted that at the Zeeb Road building, WATS is located next to the Washtenaw County Road Commission, which has a facility next door at 555 Zeeb. He was concerned that WATS would be moving away from its core function. He also wondered about the impact of OCED’s move out of downtown Ann Arbor.

Dill said the WATS move will actually assist them in meeting their federal mandates. Commissioner Yousef Rabhi elaborated, saying that the WATS director has been concerned about public accessibility, because the Zeeb location isn’t on a bus line. That issue will be resolved when WATS moves to downtown Ann Arbor, which is accessible via public transit.

Conan Smith responded to Rabhi saying that it seemed to him like a weak reason. He said he was more interested in the 300 hours that the staff spends on operational issues, not the three hours they spend in public meetings.

County Infrastructure: Board Discussion – Technology

Alicia Ping thanked Dill for the briefing – as a relatively new commissioner, she said, it was great information to have. She also praised the idea of merging the building and IT infrastructure into one department, calling the move “genius.”

Andy Brush, the county's IT director.

Dan Smith, who works in the software industry, asked if the county operates all 62 miles of fiber network mentioned in the report.

Andy Brush, the county’s IT director, said that county staff operates and monitors the entire network. It’s connected to the Merit Network – an Ann Arbor-based nonprofit that operates a statewide computer network – as well as to the city of Ann Arbor’s fiber network. Other governmental entities are interested in possibly leasing capacity from the county’s network, Brush said, including Livingston County and the state of Michigan.

In a follow-up email to The Chronicle, Brush elaborated on the leasing possibilities. The county is in conversations with the state about leasing fiber that would allow the state’s network to provide internet connections to state offices in Washtenaw County. It would allow the state potentially to lower costs and access higher bandwidth, Brush said.

Livingston County is also looking to connect its fiber network to the county’s network, Brush wrote. This would create opportunities for IT partnerships that aren’t possible now, and would allow Livingston County to connect to Lansing through a connection on Merit’s network.

At the March 8 briefing, Dill noted that in addition to managing the fiber network, the county’s IT staff also supports over 240 server-based applications, and about 1,600 computers.

Conan Smith said it’s important to understand that IT infrastructure isn’t any different than road infrastructure. It deserves the same kind of attention as other facilities.

County Infrastructure: Board Discussion – Energy

Dan Smith noted that with about $10 million in annual operating costs, finding just 10% in efficiencies would equate to $1 million in savings. Dill said he hopes to achieve that goal in 2013. [He indicated that some of the savings would come through eliminating leases – a cost not calculated into the operating expense total that was provided to the board.] D. Smith noted that although there are often upfront costs involved, the return on investment (ROI) is worth it. He asked how many years it would take to realize the ROI for some of these energy efficiency moves. Dill said it runs the gamut, and they’ll be measuring those savings.

Yousef Rabhi said the topic of energy touches at the heartstrings of his beliefs. The county needs to be at the forefront of energy efficiency and alternative energy as much as it can, he said, and he was glad to hear that Dill is on board with that. He also supported hiring an energy manager, noting that the city of Ann Arbor has someone in that position. [Andrew Brix is program manager for the city's energy office. Update: Brix left that position earlier this month. The city plans to hire a replacement.]

Dill replied that in the next update he plans to give, commissioners will hear more about the county’s energy initiatives. Plans are in the works to “green” the county’s infrastructure, he said. That might include installing solar panels on buildings with flat roofs, for example, or switching to LED lights. There are many ways to reduce the county’s carbon footprint as well as cut operating costs, Dill said. The county can also be a leader in helping other local government with these efforts, he added.

Rolland Sizemore Jr. observed that flat roofs at the Annex and circuit court buildings could also be made available for employees to take breaks outside. He said he’d like to get employee input on that.

Leah Gunn noted that several years ago, the county invested in what’s known as the Chevron project – a multi-year, multimillion-dollar effort to cut energy usage in county facilities. It would be good to know how that’s paying off, she said.

By way of background, the board was last briefed on the Chevron project at a May 20, 2010 working session. In the summer of 2004, the board authorized a $6.088 million long-term contract with Chevron Energy Solutions. The company’s efforts under the contract, financed by a 20-year bond, consisted of 26 energy-efficiency projects at 18 county facilities. The projects included replacing boilers and chillers, installing new controls for HVAC equipment, replacing air handlers and rooftop units, upgrading lighting and adding insulation, among other things. Chevron also agreed to track energy usage for four years after their work was completed – that tracking period ended in July 2010.

At the March 8 working session, Rob Turner noted that he works as an electrical contractor, and energy savings is one of the biggest aspects of his job. But there needs to be balance, he said. Alternative energy doesn’t provide the biggest return on investment, he said. The biggest savings come from energy conservation. He noted that the Chelsea school system, where he served on the school board for nine years, took out a bond to invest in conservation measures, including lighting systems and window replacements. In 2010, the district spent the same amount on energy as it did in 2004 – despite significant increases in the cost of energy.

Commissioner Yousef Rabhi chaired the March 8, 2012 working session. Rabhi, a Democrat, apologized for wearing his "Rick Santorum memorial sweatervest."

Turner also supported hiring a county energy manager, saying that the position will pay for itself through savings in energy costs.

Later in the meeting Rabhi responded to Turner’s remarks. he noted that the dollar return on energy investment is important, but it’s also important to recognize the value of reducing the county’s carbon footprint. It might not be of immediate importance in terms of finances, but it’s of long-term value for the future of Earth, he said.

In response to a query from Rabhi, Conan Smith noted that the board had created an energy committee. [The committee was created in December 2011, to provide direction in developing a county energy policy. Having such a policy is a condition to receive federal Energy Efficiency and Conservation Block Grants. The board appointed commissioners Rob Turner, Alicia Ping, Wes Prater and Yousef Rabhi to the committee, but it has not yet met.]

Rabhi suggested that the committee work with the new energy manager and give input on efforts in that area. Dill indicated that he’s working closely with Tony VanDerworp, who has overseen the county’s energy programs.

County Infrastructure: Board Discussion – Leases

Alluding to a comment made earlier in the meeting by Alicia Ping, Leah Gunn told Dill that old commissioners like her also find this information valuable – the remark drew laughter from her colleagues. Gunn then said she wanted the county to get out of leased space. The county should only lease a facility if it’s absolutely necessary, she said.

Ping also voiced her support for eliminating leases – she said she thought it went without saying. Dan Smith echoed that sentiment, saying he was glad the county is moving in that direction.

Rob Turner serves with Rolland Sizemore Jr. on the space plan committee that’s been working with Dill and his staff. Turner said that he and Sizemore have been clear about the desire to reduce the number of leases, but that it needs to be handled in a wise way so that residents maintain access to services.

Felicia Brabec agreed with the goal of eliminating leases, but wanted to make sure that residents who use the services at these locations won’t be impacted. Dill said the main thing is to make sure that any new location is also located on a bus line. Programming aspects are key in making decisions about any of these moves, he said. In almost all cases, access will be improved.

County Infrastructure: Board Discussion – Dispatch

Felicia Brabac asked for more information about 911 dispatch moves. Didn’t the county dispatchers relocate recently? she asked. [By way of background, county dispatchers co-located to a joint dispatch operation at the city of Ann Arbor's #1 Fire Station in 2010. Last year, both the city council and the county board approved consolidation of those operations – the city is contracting with the county, which will manage dispatch for both entities.]

Dill said the long-range plan has always been to move into county-owned space, and the Zeeb Road facility is the most logical location. There wasn’t a specific timeline associated with this move, he said. It’s something that needs to be discussed in greater detail.

Dan Smith recalled that new equipment would be needed for the combined dispatch operations, and clarified with Dill that a future move to Zeeb Road would likely be keyed to bringing that new equipment online.

Dill confirmed that a key decision point will come when the dispatch operations, managed by the sheriff’s office, will replace their phone system. It’s important to coordinate the financial resources for a move, he said, working with the sheriff’s office and the city of Ann Arbor.

County Infrastructure: Board Discussion – Head Start

Felicia Brabec asked for more information about the Head Start building. By way of background, the county is turning over the Washtenaw Head Start program to federal officials, a move that commissioners had approved last year as part of the budget process. The county will end its 46-year affiliation with Head Start on July 31. The county owns the Head Start building at 1661 Leforge Road in Ypsilanti. It owes about $2.6 million on the bond and makes $167,000 in bond payments annually at the building. The bond payment schedule runs through 2022.

Dill said his staff is looking at several options for the building. The county needs to be able to respond to a variety of scenarios – that might mean selling the building, he said. [Federal officials are handling the process of finding another entity to manage Head Start – possibly the Washtenaw Intermediate School District.] The county administrator has been provided with information that would allow the county to market the building, if that decision is made. Dill’s staff is also prepared to continue operating the building, if it is leased to the next entity that runs Head Start.

Yousef Rabhi said he hoped the Head Start program could stay at its current location. It’s important for children and parents to come to that same spot as though nothing has changed, he said. Brabec agreed with Rabhi’s comments. Anything the county can do to lessen the anxiety for Head Start parents and children is important. ”They already have to manage a lot,” she said.

County Infrastructure: Board Discussion – Chelsea Courthouse

Wes Prater wondered if there was still the possibility of moving the Chelsea courthouse, located at 112 S. Main in Chelsea, into the Zeeb Road facility. The courthouse houses operations for the 14A-3 District Court. Rob Turner, the commissioner whose district includes Chelsea and much of western Washtenaw, said he would be meeting with Chelsea’s mayor and city administrator to discuss that subject. It would be a big savings, he said.

The court really serves all of the county, Turner noted. If the county were to move the court, they’d save money by eliminating an operating expense, and would get proceeds from the sale. The city of Chelsea would benefit because the property would return to the tax rolls, assuming it would be bought by a private entity. [The historic building was constructed in 1901 and has an insured value of $2.56 million, according to the county's building inventory report.] It would be a win-win situation for both governments, Turner said.

County Infrastructure: Board Discussion – Preventive Maintenance

Dan Smith said he appreciated the notes in the building inventory report, which included information about how each building is used, as well as its condition. [link to .pdf of detailed building inventory report] He noted that when he served on the Northfield Township board, the township had dealt with a building that had fallen into disrepair. It can happen more quickly than people expect, Smith said, and he wondered about the county’s preventative maintenance plan.

Dill said that many public agencies like to build a structure, use it, then tear it down and rebuild another one. The average life of a building is 40-50 years, but there’s value in extending it to 60-70 years, he said. The staff is structured around that goal, he said, and preventive maintenance is important for that.

Dave Shirley, operations and maintenance manager, said that there’s a program to “touch” each county asset multiple times a year. That approach has saved tremendously in operational costs, he said. IT manager Andy Brush said a similar program is in place for the computer equipment.

Dan Smith said he was glad to hear it. Capital costs can be huge, so it’s good not to incur those expenses, if possible.

County Infrastructure: Board Discussion – Platt Road Property

Dill mentioned that one way to keep pressure off of the general fund is to dispose of the property at Platt Road, the vacant building and 10 acres of land south of Washtenaw Avenue where the juvenile justice center was previously located. Money from that sale could be used to fund infrastructure moves, he said.

Yousef Rabhi noted that the Platt Road property is in District 11, which he represents. He said he’s spoken to residents about what they’d like to see there. He’d held a public forum at that location that had a good turnout. It seems like the county is talking about the sale of that property as a fait accompli, he said. But there needs to be a robust discussion about it and look at all the options.

The overwhelming majority of residents are in favor of keeping the property as public land and greenspace, Rabhi said. It would be a good fit with the nearby County Farm Park at Platt and Washtenaw. In his ideal world, the land would be retained by the county and used for alternative energy projects or agricultural demonstrations. He said he realized the county doesn’t have financial resources to do something like that at this point, but at minimum he’d like to see the county keep the land, possibly managed by the parks department.

Dill said the county administrator has asked for recommendations about the property, and community input would be part of any decision. Conan Smith, the board’s chair, asked that any decision about the property be brought to the board for approval.

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The changes entail creating a new “cross-lateral” team of four current senior managers: Kelly Belknap, director of finance; Greg Dill, infrastructure management director; Curtis Hedger, corporation counsel; and Diane Heidt, director of human services and labor relations. The proposal also calls for putting two positions – including the job of deputy county administrator – on “hold vacant” status. Another 11 positions will be eliminated, while nine jobs will be created. A total of seven jobs will be reclassified, and will receive a salary increase. [.pdf of staff memo, resolution and job descriptions]

Commissioner Ronnie Peterson voted against the restructuring. He objected to the 4% increase that will be given to the cross-lateral team, as a result of their job reclassification. Their salaries will be capped at $126,099.

The board had been briefed about this proposal by county administrator Verna McDaniel at its Feb. 2, 2012 working session. At that meeting, McDaniel also outlined plans to seek broader restructuring of the county operations, in the wake of more than 100 county employees retiring at the end of 2011.

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 two firms are Generator Group, LLC  and D. Kerry Laycock. After responding to an RFP from the AATA for the work, the two firms were identified as the top respondents among the 10 that responded, and were asked by the AATA to partner on a proposal. The partnership was meant to use the different strengths of the two firms. Generator Group, out of Portland, Oregon, has transit experience, while Laycock taps local talent.

Laycock has been previously tapped by the city of Ann Arbor in various reorganizational efforts, including its recent approval of the outsourcing of police dispatching to the Washtenaw County sheriff’s office.

The AATA’s approved FY 2012 operating budget allocates up to $250,000 for such a project. The contract with Generator Group and Laycock would have amounted to $247,000. The board’s decision to withdraw the authorization for the contract stemmed from concerns about its cost.

Board members encouraged CEO Michael Ford to use his ability to strike contracts for less than $100,000 without board authorization to complete the first phases of the organizational review. At that point, he could return to the board for a request to complete the final phase.

This brief was filed from the downtown location of the Ann Arbor District Library, where the AATA board holds its meetings. A more detailed report will follow: [link]

The proposed changes, which could be introduced at a later date, were expected to save $120,962 and were part of a broader 2012-2013 budget proposal. The reorganization would have put the deputy county administrator’s position – which has been unfilled since the departure of Bill Reynolds earlier this year – on hold/vacant status. A new “cross lateral” team was proposed with four members: Kelly Belknap, director of finance; Greg Dill, infrastructure management director (a new position); Curtis Hedger, corporation counsel; and Diane Heidt, director of human resources and labor relations.

Dill is currently director of administrative operations for the sheriff’s office. A resolution for his new appointment – to the newly created job of infrastructure management director, with a salary of $116,75 – was also pulled from the agenda of Wednesday’s meeting. His new responsibilities would include some previously assigned to the county’s information & technology manager, a position that’s been eliminated following the departure of James McFarlane.

According to a staff memo, the cross lateral team was intended to split the duties formerly handled by the deputy administrator. Department heads would be assigned to a team leader and report to that person for non-critical issues. The proposal called for each team member to receive a $15,000 stipend in addition to their salaries, which would be capped at $125,000 unless a higher salary is authorized by the county board. If the combination of salary and stipend exceeded $125,000, the excess would be paid as a contribution into the employee’s deferred compensation retirement plan.

Other changes in the proposal included eliminating an administrative coordinator position, and creating a new management analyst job.

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

Washtenaw County commissioner Dan Smith (R-District 2) and county administrator Verna McDaniel. Smith is vice chair of the board’s ways & means committee, and led the meeting in the absence of the committee chair, Rolland Sizemore Jr. (D-District 5). (Photos by the writer.)

The budget update showed the impact of higher-than-anticipated property tax revenues, which had first been announced in April. Because of higher revenues than originally projected, the county now expects to use only $2.9 million from its fund balance during 2011 – previously, the budget called for drawing $5.3 million from the fund balance to cover a shortfall between revenues and expenditures.

Without the $2.9 million transfer from the fund balance, however, there would be a projected $2.5 million deficit for the year, on a general fund budget of roughly $100 million. Among several shortfalls on the expenditure side, about $1.034 million in anticipated non-departmental lump sum reductions have not materialized.

Expenses for attorney fees are higher than budgeted, but the county’s corporation counsel Curtis Hedger noted that there’s at least one case that won’t be costing the county in the future. It was an allusion to the end of a 2006 lawsuit against the county over the cost of police services. Hedger later told The Chronicle that the two townships still involved in the case – Ypsilanti Township and Augusta Township – paid the county this week the nearly $750,000 recommended by a court-ordered facilitator.

There was little discussion about most of the action items that the board approved. Most notably, a final OK was given to creating a new office of community & economic development – the result of merging three county departments. The new unit, to be led by Mary Jo Callan, will employ about 31 full-time workers, compared to 40 that are now employed in the three separate departments: the office of community development (OCD); the economic development & energy department; and the employment training and community services (ETCS) department. Other jobs within the county government have been identified for all but one employee so far. The consolidation will take effect in 2012.

Commissioners also set public hearings for their Sept. 7 meeting to get input on two millages: one levied under the Veterans Relief Fund Act, and another collected under Public Act 88 to be used for economic development purposes. Because Act 88 and the veterans relief act predate the state’s Headlee Amendment, they can be approved by the board without a voter referendum.

The Act 88 millage of 0.05 mill would be an increase from the 0.043 mills currently levied. It would generate an estimated $688,913 annually. In previous years, it has been used to fund several entities, including Ann Arbor SPARK. The veterans relief millage of 1/40th of a mill does not represent an increase, and is estimated to bring in $344,486 to provide services for indigent veterans in Washtenaw County through the county’s department of veterans affairs.

Republicans Dan Smith and Alicia Ping led the back-to-back ways & means committee and regular board meetings on Wednesday – as vice chairs of those respective bodies, they were filling in for chairs Rolland Sizemore Jr. and Conan Smith. Both Democrats were out of town.

Second Quarter Budget Update

Tina Gavalier, the county’s finance analyst, gave a formal presentation on the 2011 second-quarter budget update, for the first six months of the year. County administrator Verna McDaniel and interim deputy administrator Kelly Belknap were on hand to answer questions.

Gavalier reported that expense reductions haven’t materialized as much as expected, but property tax revenues were higher than anticipated. [The news of higher-than-expected property tax revenues had been announced at the board's April 20, 2011 meeting, when the equalization report was presented. The equalization report is the basis for determining the taxable value of property in the county, which in turn indicates how much tax revenue is collected by local taxing entities.]

When commissioners originally approved the 2011 budget in late 2010, they had anticipated using $5.289 million from the county’s fund balance. But because property tax revenues were about $3.5 million higher than initially projected, less of the fund balance will be used.

The county now expects to use $2.9 million from its fund balance during 2011. Without that transfer, there would be a projected $2.5 million deficit for the year, on a general fund budget of roughly $100 million. As of June 30, the fund balance stands at $12.8 million.

Among several shortfalls on the expenditure side, about $1.034 million in anticipated non-departmental lump sum reductions have not materialized. [.pdf of county general fund budget as of June 30, 2011]

Other highlights:

• Revenue surpluses of about $368,000 are anticipated from the clerk/register of deeds office due to higher-than-expected revenues from fees and transfer taxes. Budgets for the treasurer and prosecuting attorney also are showing revenue surpluses.
• The office of the water resources commissioner is seeing a roughly $80,000 revenue shortfall, caused by lower-than-expected construction-related fees and licenses. That amount is offset by about $49,000 in higher-than-budgeted savings for employee development and reimbursements.
• The sheriff’s office is about $481,000 short of its goal in anticipated expense reductions, but that’s offset by a projected revenue surplus of $877,o00. The additional revenue comes from new contracts for court security, additional contract deputies, dispatch services, and fees, among other sources.

The finance staff will give the next budget update – for the third quarter of 2011 – in November. McDaniel anticipates presenting the county’s 2012-2013 budget to the board for its review in September.

Second Quarter Budget Update: Commissioner Discussion

Wes Prater asked why the IT maintenance contracts were “out of whack.” Gavalier explained that about $221,000 in savings that the department had expected to get this year by renegotiating some of its contracts didn’t materialize.

Prater pointed out that the corporation counsel’s budget showed that expenses were $125,000 over budget – at $250,000, expenses were double the amount anticipated. Curtis Hedger, the county’s corporation counsel, quipped: ”There’s at least one case that we won’t be expending attorney fees on in the future.” The remark elicited laughter – it was a reference to the anticipated settlement of a years-long lawsuit filed against the county in 2006 by three townships over the cost of police services contracts.

[At its July 6, 2011 meeting, the board voted to approve the recommendation of a court-ordered facilitator, who set $749,427 as the amount owed by Ypsilanti Township and August Township to the county for police services provided in 2006. The county is not seeking payment for its legal expenses related to the lawsuit, which are estimated to be more than $1 million since 2006. Responding to a follow-up query from The Chronicle, Hedger said the paperwork has been completed to dismiss the lawsuit, and the townships paid the county this week.]

Commissioners Alicia Ping (R-District 3) and Wes Prater (D-District 4) confer before the Aug. 3 board meeting.

Prater also asked about the shortfall in a lump sum reduction that the 14A District Court had been asked to make. Gavalier clarified that the original target for expense reduction was $375,000. However, the court wasn’t able to reduce its operating budget by that amount, falling about $205,000 short of that goal.

Also related to the 14A District Court, Barbara Bergman questioned whether the board should revisit a policy of setting aside funds for future expansion of the courthouse in Saline. A portion of the fees collected by the 14A District Court – about $140,000 annually – are put into a public improvement fund. A portion of those funds are used to reimburse the county for the Saline courthouse construction in the mid-2000s. Some of the funds are also set aside to be used to pay for future expansion of the court – the current building, located at 1000 N. Maple, was completed in 2009. Bergman said that given the current economic condition, those funds might be put to better use.

Dan Smith noted that there were shortfalls in the budgets funded by the indigent veterans relief and Act 88 millages. Given that the board was setting public hearings later in the meeting for renewals of both millages, he wondered if there were any plans to increase the rates. [Because Act 88 and the veterans relief act predate the state’s Headlee Amendment, they can be approved by the board without a voter referendum. The Act 88 millage is currently levied at 0.043 mills. The county levies 1/40 mill for indigent veterans relief.]

McDaniel said that no change is being requested for veterans relief, but they are asking for an increase in the Act 88 millage to 0.05 mills. It’s expected that the board will be asked to increase the rate of the veterans relief millage next year, she said.

Mid-Year Budget Adjustment

The board was asked to approve a mid-year budget adjustment that increased the general fund budget by $1.42 million. The adjustment also increased the county Community Support and Treatment Services (CSTS) department’s budget by $150,003.

The general fund adjustment reflects an increase of $3,476,225 in property tax revenue for 2011. The 2011 budget approved by commissioners in late 2010 included the use of $5,289,000 from the county’s fund balance. In light of increased property tax revenues, only $2,921,391 will be used from the fund balance for the current budget year, which ends Dec. 31. On the expenditure side, there is a $1,034,000 shortfall in anticipated lump sum expense reductions. Several other more minor adjustments were made on both the expense and revenue side. [.pdf of staff memo detailing budget adjustments]

The total 2011 general fund budget is $100,696,000.

The CSTS increase reflects an adjustment in the cost allocation plan (CAP) – an amount charged to each department for items like the county attorney and administration. According to a staff memo, the expense will be offset by additional revenue from the Washtenaw County Health Organization (WCHO), a partnership between the county and the University of Michigan Health System.

The WCHO had been one of the topics of a July 7, 2011 board working session, where WCHO executive director Patrick Barrie briefed commissioners on a proposed transfer of about a half-dozen employees from the county payroll to the WCHO, as part of a restructuring aimed at limiting the county’s financial liabilities. The WCHO is an entity that receives state and federal funding to provide services for people with serious mental illness, developmental disabilities and substance abuse disorders. At this point, WCHO “leases” its employees from the county, and contracts for services through the county’s community support and treatment services (CSTS) department, which employs about 300 people.

Commissioner Ronnie Peterson, at a June 28 agenda briefing, had advocated strongly for reordering the working session’s agenda in order to give more time to the WCHO discussion, but he did not wind up attending that meeting. On Wednesday, however, he again raised concerns about the WCHO changes. He said he’d watched a video of the July 7 working session, and would be asking more questions about the restructuring in the future.

Commissioner Barbara Bergman, who also serves on the WCHO board, urged Peterson to meet with Barrie directly to address any questions Peterson might have. Peterson responded by saying that others are free to meet in whatever ways they choose, but he prefers to hold his discussions at a public meeting.

Outcome: Commissioners unanimously approved the mid-year budget adjustment as part of their consent agenda.

Office of Community & Economic Development

A departmental consolidation long in the works got final approval on Wednesday, after only a few questions from commissioners. The move combines and reorganizes three county departments: the office of community development (OCD); the economic development & energy department; and the employment training and community services (ETCS) department. An initial vote of approval had been taken at the board’s July 6, 2011 meeting, though some commissioners had asked for more details about the proposed changes, which would take effect on Jan. 1, 2012. [.pdf of responses to commissioner questions] [.pdf of business plan for the new office]

OCD director Mary Jo Callan will lead the new office of community & economic development. The goal is to cut costs by eliminating duplicated services in the face of declining revenues, while finding ways to deliver those services more efficiently to citizens.

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

Office of Community & Economic Development: Commissioner Discussion

Ronnie Peterson asked whether other jobs had been found for employees whose positions were eliminated because of the consolidation.

Diane Heidt, the county’s human resources and labor relations director, reported that the change resulted in a net loss of eight county jobs. [The office of community development, which will be part of the newly merged entity, is a joint operation between the county and city of Ann Arbor. An additional city job is being eliminated. Overall, the three departments are shrinking from 40.35 full-time employees to 31.85 FTEs in the new office.]

Heidt said that jobs in other departments have been found for all but one of the affected employees. She told commissioners that she’s continuing to work to find another position for that remaining employee, whose current job won’t be eliminated until the end of the year.

Peterson asked whether the department is also planning new hires. Yes, Heidt said – a couple of positions have already been posted.

Peterson then spoke at length about his concerns regarding these changes. Loyalty should count for something, he said, expressing dismay that some county workers had seen their jobs eliminated even as the county plans to hire other employees. Workers are being asked to take cuts in wages and benefits, he noted – it affects morale to then see some employees lose their jobs while other positions are created, he said.

Peterson also talked about the importance of economic development, especially on the county’s east side. [Peterson represents District 6, covering Ypsilanti and part of Ypsilanti Township. In the past he has voiced concerns that the departmental reorganization will downplay the county's role in economic development.] Ann Arbor is doing fine, and that helps the entire county, he said. But the eastern side is struggling, and will continue to struggle for years to come. He said he trusts Mary Jo Callan to direct the new department and he’s been pleased with her advocacy. He said he’d support the resolution to create the new department, but that he’ll raise these same concerns later in the year during budget deliberations.

Responding to a question from Yousef Rabhi, Heidt said that of the eliminated positions, four had been temporary jobs funded by a federal stimulus weatherization grant, and two other positions had been vacant. She said that multiple meetings with union representatives had been held as part of this process. Administrators had originally thought that more jobs would be affected, she said, but they were able to keep most employees within the new structure.

Outcome: The board unanimously gave final approval to the departmental consolidation as part of the consent agenda.

WISD Contract for Juvenile Programs

The board was asked to authorize a contract with the Washtenaw Intermediate School District, funding educational programs at the county’s Juvenile Detention Center and the Daybreak Residential program.

The agreement provides $380,379 for the 2011-12 school year, and gives the county administrator the authority to sign second-year contracts for the 2012-13 school year. The county expects to be reimbursed by the state for all but $75,370 of the annual cost. According to a staff memo, the WISD would provide two certified teachers and a half-time school social worker for up to 30 youth, based on the program capacities and a ratio no greater than one teacher to 10 youth, as required by state and federal regulations for special education programs. [.pdf of contract with WISD]

Lisa Greco, the county’s director of children’s services, attended Wednesday’s meeting but did not address the board.

Outcome: Without discussion, the board unanimously approved authorization of the WISD contract as part of the consent agenda.

New Contract for Nurses Union

A resolution on Wednesday’s board agenda gave final approval to an agreement with the Michigan Nurses Association – Unit I. The agreement covers the period from July 1, 2011 through Dec. 31, 2013.

The collective bargaining agreement, which affects 13 public health nurses and nurse coordinators in the county’s health services department, was given initial approval on July 6. It’s the first of 15 union agreements being negotiated as part of the 2012 and 2013 budget cycle, and is expected to achieve an annual savings of $132,000.

In total, the county hopes to see about $8 million in labor concessions for the two-year budget cycle, to help address a projected $17.5 million deficit. [There are 17 unions representing the county workforce. In January 2011, the county reached agreements with two other unions – the Police Officers Association of Michigan (POAM) and the Command Officers Association of Michigan (COAM) – for a four-year period through 2014.]

According to terms of the agreement with the nurses union, union members will not have raises in 2012 or 2013. The nurses will bear a greater share of health care expenses, pension contributions and retiree health care contributions. For example, the co-pay for emergency room visits will increase from $50 to $250.

Union members will now pay deductibles, and a percentage of the cost of their medical expenses, up to an annual maximum. Prescription drug co-pays will also be increased under the new agreement. In addition, the number of annual “banked leave” days – similar to unpaid furlough days – will increase from 6 to 12.

Outcome: Without discussion, commissioners unanimously gave final approval to the collective bargaining agreement with the Michigan Nurses Association – Unit I, as part of the board’s consent agenda.

Urban County Expands

The board gave initial approval to continue the county’s participation in the Urban County program – from July 1, 2012 to June 30, 2015 – and to expand the program to include six additional jurisdictions. A final vote is expected on Sept. 7.

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

Washtenaw County and the townships of Ann Arbor, Ypsilanti, Pittsfield, Superior, Northfield, Salem, and Bridgewater got the Urban County designation in 2002. Later, the city of Ypsilanti and Scio Township joined, and in 2009 the city of Ann Arbor – which previously received HUD funding directly – joined as well, roughly doubling the amount of money available in the Urban County’s funding pool. New jurisdictions that plan to join the Urban County for the next funding cycle are the city of Saline, the village of Manchester, and the townships of Dexter, Lima, Manchester, and Saline.

Outcome: Without discussion, the board unanimously voted to give initial approval to continue participation in an expanded Urban County program.

Agreement Set with Regional Energy Office

Commissioners held a public hearing and subsequently voted on an interlocal agreement with the Southeast Michigan Regional Energy Office (SEMREO) Community Alliance. The Ferndale-based entity provides technical services to the county in identifying and implementing federal Energy Efficiency and Conservation Block Grant projects. [.pdf of interlocal agreement]

The energy office is a division of the Michigan Suburbs Alliance. County commissioner and board chair Conan Smith is CEO of the alliance. The board voted to join the energy office at its March 17, 2010 meeting. Smith abstained from that vote. He was absent from the Aug. 3 meeting.

Sam Offen, director of the alliance’s Southeast Michigan regional energy program, attended Wednesday’s meeting but did not address the board. Offen, an Ann Arbor resident, also serves on the Ann Arbor park advisory commission and is a board member of the Leslie Science and Nature Center.

Regional Energy Office: Public Hearing

One person – Thomas Partridge – spoke during a public hearing about the interlocal agreement. He began by asking for clarification about the hearing’s topic. He said it was incumbent upon the board to publicize the hearing more broadly and to ensure that adequate background material is provided. He asked that funding for energy and energy conservation be directed to help the county’s most disadvantaged residents, and called for a resolution that asked public utilities like DTE to stop discriminatory billing practices against the disadvantaged. No one should have to go without heat or air conditioning, he said.

Outcome: Without discussion, commissioners unanimously approved the interlocal agreement with the Southeast Michigan Regional Energy Office Community Alliance as part of their consent agenda.

Public Hearings Scheduled for Millages

The board scheduled two public hearings for its Sept. 7 meeting that related to countywide millages.

The hearings are intended to get feedback from the public on a millage levied under the Veterans Relief Fund Act, and a millage collected under Public Act 88 to be used for economic development purposes.

The veterans relief millage would not exceed 1/40th of a mill, to be levied in December 2011 for use during the calendar year 2012. It’s estimated to bring in $344,486 and would be used to provide services for indigent veterans in Washtenaw County.

The Public Act 88 millage of 0.05 mill would generate an estimated $688,913 annually and would cost homeowners $5 for every $100,000 of their homes’ taxable value. [The Act 88 millage is currently levied at 0.043 mills.]

According to a staff memo, the county could assign some of the funds “to a non-profit organization which is engaged in the purpose of advertising the advantages of and encouraging trade within the County.” In previous years, Act 88 revenues have been used to fund the economic development agency Ann Arbor SPARK and other groups.

Outcome: The board set public hearings for its Sept. 7 meeting to get input on the veterans relief and Act 88 millages.

Grant for Sheriff’s Office

Commissioners were asked to vote on a resolution authorizing the Washtenaw County sheriff’s office to apply for a Edward Byrne Memorial Justice Assistance grant. The $42,587 grant would be awarded by the U.S. Dept. of Justice’s Bureau of Justice Assistance. The funds would be used to support the sheriff’s community outreach program, according to a staff memo. Specifically, the grant would fund a part-time community engagement coordinator and two of the program’s five peer outreach workers.

Commissioners also set a public hearing for Sept. 7 to get input on how the grant will be used. The U.S. Dept. of Justice requires a public hearing before awarding these grants, to get input about projects or programs that might be funded by the money.

Sheriff Jerry Clayton and Greg Dill, director of administrative services for the sheriff’s office, attended Wednesday’s meeting but did not address the board.

A final vote is expected at the next board meeting on Sept. 7.

Outcome: Commissioners gave initial approval to apply for the Edward Byrne Memorial Justice Assistance grant, and set a Sept. 7 public hearing for how the grant will be used. There was no discussion on this item.

Misc. Communications, Public Commentary

In addition to the public hearing mentioned earlier in this report, Thomas Partridge of Ann Arbor spoke during each of the four opportunities for public commentary. He was the only person to speak during public commentary at Wednesday’s meeting. Describing himself as a Democrat and an advocate for the disadvantaged, Partridge said the budget discussion for the next fiscal year was a moral, ethical and civil rights subject, not just a financial one. He advocated for accessible and affordable health care, transportation, housing and education for all, but especially for the disadvantaged, including senior citizens and the poor.

He said that although he was an early supporter of Barack Obama in the 2008 presidential race, he’s been very disappointed in Obama’s performance and he called for other Democratic candidates to come forward to run for president in 2012.

Partridge also expressed concern about tactics the county administration is using to get employees to accept cutbacks – he did not give details, but said he’d been talking earlier in the meeting with a county employee who’s a member of the AFSCME union. Commissioners should be working to raise revenues so that the county can employ enough workers to adequately deliver services to residents, he said.

Partridge also called for changes that would make the county administrator an elected position. [That job is currently a hire made by the board of commissioners.] The officers of the board should also be chosen by the electorate, he said. [All commissioners are elected positions, but commissioners then elect officers for the board, ways & means committee, and working sessions.] Partridge also said that the speaking turn for commissioners should be limited in the same way that time for public commentary is limited. [Speakers during public commentary are limited to three minutes during each turn at the ways & means committee meeting, and five minutes during the regular board meeting.]

Misc: Communications: Congratulations to Jason Brooks

Commissioner Yousef Rabhi thanked Jason Brooks for his impressive service. Brooks, a deputy county clerk, attends all public meetings of the board and handles many of the board’s procedural logistics, including taking minutes of the meetings.

From left: Deputy county clerk Jason Brooks, commissioner Yousef Rabhi (D-District 11), and corporation counsel Curtis Hedger. In mid-August, Brooks will be taking a new job as management analyst in the county administrator’s office.

Rabhi noted that Brooks hadn’t missed a meeting since 2006. He also congratulated Brooks on recently receiving The Ann Arbor Chronicle’s Bezonki award. [Brooks and deputy county clerk Matt Yankee were joint recipients of a Bezonki, recognizing their service in the public sector. More details about award winners will be provided in the September 2011 Chronicle monthly milestone column.]

Rabhi said he looked forward to working with Brooks in the future. In mid-August, Brooks will take a new job as management analyst in the county administrator’s office, replacing Joanna Bidlack, who left that position earlier this year. County administrator Verna McDaniel said she’ll be working with county clerk Larry Kestenbaum on the transition.

Brooks received a round of applause from commissioners.

Misc. Communications: Working Sessions

Rabhi, who chairs the board’s working sessions, noted that commissioners had canceled their Aug. 4 working session, “so don’t come – nobody will be here.” However, he reminded his colleagues that they had added five working sessions focused on the 2012-2013 budget, and the next one is set for Thursday, Aug. 18. The topic will be the consolidation of dispatch operations between the county and the city of Ann Arbor.

Misc. Communications: Stuff the Bus

McDaniel highlighted the 2011 Stuff the Bus event, a United Way fundraiser that this year will run from Aug. 15-19. It will be held from 9 a.m. to 3:30 p.m. each day in the parking lot of the Target at 3749 Carpenter Road. The public is asked to donate new school supplies – backpacks, pencils, notepads, binders, crayons, glue and other items – that will be distributed to children in need throughout the county in grades K-5. Participating school districts include Ypsilanti, Willow Run, Chelsea, Manchester, Whitmore Lake and Lincoln Consolidated schools.

Closed Session

The board ended its meeting by voting to go into closed executive session for the purpose of discussing the confidential opinion of legal counsel and the settlement of pending litigation. The specific topic wasn’t revealed, but the session appeared to have been a contentious one. Leah Gunn left early and several commissioners later reported that the discussion had been heated.

Present: Barbara Levin Bergman, Leah Gunn, Ronnie Peterson, Alicia Ping, Wes Prater, Yousef Rabhi, Rob Turner, and Dan Smith.

Absent: Kristin Judge, Rolland Sizemore Jr., Conan Smith.

Next regular board meeting: Wednesday, Sept. 7, 2011 at 6:30 p.m. at the county administration building, 220 N. Main St. The Ways & Means Committee meets first, followed immediately by the regular board meeting. [confirm date] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public comment sessions are held at the beginning and end of each meeting.

Next working session: Thursday, Aug. 18, 2011 at 6:30 p.m. at the county administration building, 220 N. Main St. The working session will focus on the 2012-2013 budget.

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

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

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

Mary Jo Callan talks with Tony Van Derworp before the start of the July 6, 2011 Washtenaw County board of commissioners meeting. Callan is overseeing the consolidation of three county departments, including the economic development and energy department, which Van Derworp leads.

In the works for over a year, the consolidation would combine the office of community development, the economic development & energy department, and the employment training and community services (ETCS) department. The goal, according to county managers, is to cut costs by eliminating duplicated services in the face of declining revenues, while finding ways to deliver those services more efficiently to residents in need. The number of full-time employees in the merged departments would drop from 40 to 32, though most of those displaced workers will likely be moved to other county jobs. In total, about $500,000 in annual savings is expected from the merger.

While generally supportive of the change, several commissioners asked for additional details, and expressed frustration that they were provided new information – including a business plan – just hours before the meeting began. The proposal was originally on the agendas for initial approval at the Ways & Means committee meeting and final approval at the regular board meeting that same night, but commissioners decided to remove it from the board meeting agenda. They’ll likely consider it for a final vote at their Aug. 3 meeting. The consolidation will also be one of the topics at the July 11 Ann Arbor city council working session – the office of community development is a joint city/county unit.

Two other items that have received considerable – often contentious – discussion at previous meetings were passed with virtually no comment. Both relate to police services that are provided under contract to local municipalities by the sheriff’s office. On the first item, the county board approved the recommendation of a court-ordered facilitator in a lawsuit filed against the county in 2006 over the cost of police services. The recommendation states that Ypsilanti Township and Augusta Township should pay the county $749,427 for police services provided in 2006. The boards of those townships are expected to vote on the recommendation this week. If approved, it could lead to the closure of that legal battle.

On the second related item, the county board gave final approval to the price that municipalities will pay for a contract sheriff’s deputy through 2015. The price in 2012 – $150,594 – is unchanged from this year, but will rise in subsequent years by about 1% annually. The complex, politically-charged process of arriving at those figures 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.

Several other budget-related issues were addressed during the July 6 meeting, including initial approval to an agreement with the Michigan Nurses Association – Unit I, the union that represents 13 public health nurses and nurse coordinators in the county’s health services department. It’s the first of 15 union agreements being negotiated as part of the 2012 and 2013 budget cycle, and is expected to achieve an annual savings of $132,000. In total, the county hopes to see about $8 million in labor concessions for the two-year budget cycle, to help address a projected $17.5 million deficit.

Commissioners also voted to raise the fee for waiving the statutory three-day marriage license waiting period, increasing it from $5 to $50. County clerk Larry Kestenbaum, whose office processes marriage licenses, assured the board that the vast majority of applications are willing to wait the three days, and won’t incur this additional cost for expediting the process. Conan Smith joked that he had hoped Kestenbaum would come forward with a package discount deal – for marriage licenses and concealed weapons permits.

Police Services Lawsuit

In a step that could lead to ending a lawsuit filed against the county in 2006, the Washtenaw County board of commissioners voted to approve the recommendation of a court-ordered facilitator. The recommendation sets $749,427 as the amount owed by Ypsilanti Township and August Township to the county for police services provided in 2006. That was the year those townships, along with Salem Township, filed a lawsuit against the county over the price of contract deputies. Salem Township reached a settlement with the county in 2010.

The bulk of the recommended payment – $732,927 – will come from Ypsilanti Township, which had contracted for 44 sheriff deputies in 2006. In addition to approval from the county board, the recommendation would also need to be voted on by the boards of both townships. Those meetings are expected to occur next week. [Previous Chronicle coverage: "Vote Coming on Police Services Lawsuit"]

County representatives previously indicated they were seeking around $2 million. The county is not seeking payment for its legal expenses related to the lawsuit, which are estimated to be just over $1 million.

Police Services Lawsuit: Commissioner Comments

Conan Smith, the board’s chair, was the only commissioner to comment on this agenda item. He said he was grateful the county is settling this issue, which he noted had caused a lot of consternation and contention between the county and these contracting units. He expressed gratitude to everyone who came to the table and helped make this closure possible. It sets them on the right path for negotiations over police services contracts and future partnerships, he concluded.

Outcome: Commissioners unanimously approved the recommendation of a court-ordered facilitator at both their Ways & Means committee meeting and their regular board meeting.

Police Services Pricing

On the agenda was a resolution giving final approval to the price that municipalities will pay for a contract sheriff’s deputy through 2015. The police services steering committee recommended setting the price in 2012 for a police services unit (PSU) at $150,594. Initial approval by the county board had been given at its June 1 meeting.

Commissioner Alicia Ping talks with sheriff Jerry Clayton in the lobby of the county administration building prior to the start of the July 6 county board meeting.

The price in 2012 will remain unchanged from the 2011 rate of $150,594, which was a 4% increase over 2010 rates. In each of the following three years, the price per PSU increases about 1%: to $152,100 in 2013; $153,621 in 2014; and $155,157 in 2015.

In late 2010, the committee brought forward a recommendation to the board that set the cost of providing a PSU at $176,108. At its Dec. 1 meeting, the county board voted to accept that amount, with the understanding that commissioners would need to make a much harder decision – about the price that the county would charge for a PSU – at a later date. The difference between the cost of a PSU and the amount charged – roughly $25,500, based on current figures – would be covered by the county.

Sheriff Jerry Clayton attended Wednesday’s meeting, but there was no discussion on this item and commissioners did not ask him to answer any questions about this recommendation. The board had been briefed by Clayton at a May 19 working session.

Outcome: Commissioners voted unanimously to give final approval to the price that municipalities will pay for a contract sheriff’s deputy through 2015.

Departmental Merger: Community & Economic Development

A major consolidation of three county departments – the office of community development, the economic development & energy department, and the employment training and community services (ETCS) department – was given initial approval by the board of commissioners at their July 6 meeting. A final vote is expected at the board’s Aug. 3 meeting. The changes would take effect on Jan. 1, 2012. [.pdf draft budget summary] [.pdf draft business plan]

If the reorganization gets final approval, Mary Jo Callan, director of the office of community development, will lead the new office of community & economic development. The goal is to cut costs by eliminating duplicated services in the face of declining revenues, while finding ways to deliver those services more efficiently to residents. The new department is expected to have a non-general fund budget of about $14.7 million – when federal stimulus funds were available, the three departments had been bringing in about $29 million in non-general fund revenue. In addition, about $1.66 million would be allocated to the merged department from the county’s general fund.

Several personnel changes are part of the restructuring, which would eliminate 11 positions and create 3 jobs – for a net loss of 8 jobs. In addition, there would be 20 job reclassifications, 5 title changes and 1 position held vacant.

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

Departmental Merger: Public Commentary

Andy LaBarre, vice president of government relations for the Ann Arbor/Ypsilanti Regional Chamber of Commerce, spoke in support of the proposed reorganization.

Greg Dill, left, talks with Andy LaBarre, vice president of government relations for the Ann Arbor/Ypsilanti Regional Chamber of Commerce. Dill is director of administrative services for the sheriff's office.

Consolidating these departments makes great sense, he said, and will help the county better serve its citizens. It holds promise as a model for other communities, schools and local governments to set aside traditional structures in the interest of the community as a whole.

The chamber did something similar in 2010, when the Ann Arbor and Ypsilanti chambers merged into one regional entity, LaBarre said. Members and leaders of the chambers understood that it was time to reduce costs and maximize benefits by embracing regionalism and consolidation. “That time is still before us,” he said.

In particular, the merger of these three county departments will create a stronger, more efficient approach to regional economic development, LaBarre said. The chamber applauds the move and looks forward to partnering with the new office, he concluded.

Departmental Merger: Commissioner Discussion

Commissioners had several questions about this proposal. It was originally on the agendas for initial approval at the Ways & Means committee meeting and final approval at the regular board meeting that same night, but commissioners decided to remove it from the board meeting. They’ll likely consider it for a final time at their Aug. 3 meeting.

Wes Prater began the discussion by noting that commissioners had received new material just that afternoon. There was a lot of information, he said, and he had a lot of questions about it. He clarified that there would be a net loss of eight jobs after the consolidation.

Mary Jo Callan acknowledged that the information has been a moving target. The employee count will drop from 40.35 full-time equivalents (FTEs) to 32.1 FTEs.

Prater also asked for details on the span of control – the number of supervisors and the positions they oversee – that would result after the consolidation is completed.

Kristin Judge asked about the line item for in-kind contributions. It went from about $1 million last year to only about $63,000 this year – why did it drop? Kelly Belknap, the county’s finance director and interim deputy administrator, said that in-kind contributions refer to county money or staff time that’s required as matching funds for federal grants. For 2010, all of the information is finalized. This year, information is still incomplete because the year hasn’t ended – they’ll have the final numbers after the 2011 audit, she said. And for 2012, the county still doesn’t know what grants they’ll be awarded.

Judge then asked for clarification about the total savings that were expected to result from the consolidation – it wasn’t clear from the materials they’d been provided, she said. Belknap reported that staff estimated about $500,000 in savings, from reducing general fund allocations to the new department, and requesting higher cost allocation plan (CAP) dollars from grant funds. [CAP refers to the amount charged to each department for things like the county attorney, information technology and administration.]

Judge said that for her to support this proposal on the final vote in August, she needed a much greater level of detail. She also asked about the proposed job reclassifications, wondering why it seemed that they were all going up a pay grade or more. Diane Heidt, the county’s human resources and labor relations director, explained that several jobs were being reclassified from non-union to union positions, and the pay grades weren’t equivalent. For example, a pay grade of 15 for a union job might equate to a pay grade of 8 for a non-union position.

After confirming that the board wouldn’t be taking a final vote that night, Ronnie Peterson then spoke at length about his concerns related to the consolidation, but said he’d save most of his questions for the August meeting. He said his statements weren’t directed at the current managers, but rather at the way the departments have evolved over many years.

From left: Caryette Fenner, president of the AFSCME local 2733, the largest union representing county employees; Nancy Heine, president of AFSCME Local 3052; and county commissioner Ronnie Peterson.

He said he believes they lost the war on poverty long ago, and that’s especially true on the east side of the county. [Peterson represents District 6, covering Ypsilanti and part of Ypsilanti Township.] Given the decline of the auto industry, the east side is struggling, Peterson said. That’s why he’s committed to the Eastern Leaders Group, which advocates for economic development, and why he supported the Act 88 millage that funds ELG and Ann Arbor SPARK, the area’s economic development agency. The eastern part of the county needs jobs and neighborhood stabilization, Peterson said. “We don’t need more cheese and butter lines.”

It’s time to devote energy and resources to fighting poverty, Peterson said. No one has spoken about how funding will be allocated to do that, as a result of this consolidation, he added. He requested more details about how program activities would be funded, and said he appreciated that the final vote would be delayed until August.

Alicia Ping asked why the line item for supplies went from $542,040 in 2010 to $43,390 in the 2012 budget. Callan explained that the 2010 amount had been misclassified – about $500,000 of that amount should have been listed in the line item for the senior nutrition program, not supplies.

Ping also said she had a difficult time seeing where the savings would come from in this reorganization. Belknap told commissioners that the finance staff would provide a detailed supplemental budget that reflects those savings. Callan added that they have the information – commissioners had received detailed budget documents earlier this year. It just wasn’t in the summary that commissioners received for Wednesday’s meeting.

Callan also noted, in response to a question from Judge, that about 90% of the positions in the merged departments would not be funded out of the county’s general fund. Rather, those jobs would be supported through grant funding. Judge asked for a breakdown of how many positions would be supported through the general fund compared to non-general fund positions.

Dan Smith requested a better explanation about how the organizational savings would be achieved, and suggested also providing an organization chart for commissioners.

Rolland Sizemore Jr. said he strongly suggested that Callan meet with individual commissioners between now and Aug. 3 to address their questions. Commissioners agreed to email all their questions to the county administrative staff, and answers would be sent out to the entire board.

Outcome: Commissioners gave initial approval to the reorganization, with a final vote expected at their Aug. 3 meeting.

Nurses Union Agreement

Commissioners held an executive session early in their meeting to discuss a collective bargaining agreement. When they emerged, they added a supplemental agenda item to give initial approval to an agreement with the Michigan Nurses Association – Unit I. The agreement covers the period from July 1, 2011 through Dec. 31, 2013.

The agreement affects 13 public health nurses and nurse coordinators in the county’s health services department. It’s the first of 15 union agreements being negotiated as part of the 2012 and 2013 budget cycle, and is expected to achieve an annual savings of $132,000. In total, the county hopes to see about $8 million in labor concessions for the two-year budget cycle, to help address a projected $17.5 million deficit. [There are 17 unions representing the county workforce. In January 2011, the county reached agreements with two other unions – the Police Officers Association of Michigan (POAM) and the Command Officers Association of Michigan (COAM) – for a four-year period through 2014.]

According to terms of the agreement with the nurses union, union members will not receive across-the-board pay raises in 2012 or 2013. However, if eligible, they will continue to receive automatic “step” increases that are part of all union contracts. [On an employee’s anniversary date – typically the date of their hire – they get an automatic increase to the next step in the salary grade.]

The nurses will bear a greater share of health care expenses, pension contributions and retiree health care contributions. Details include:

• Co-pays will increase. For example, co-pays for emergency room visits will increase from $50 to $250. An office visit co-pay will be $40.
• Union members will now pay deductibles, and a percentage of the cost of their medical expenses, up to an annual maximum. Prescription drug co-pays will also be increased under the new agreement.
• As of Jan. 1, 2012, all employees under this contract will contribute 8.5% to the Washtenaw County Employees’ Retirement System (WCERS), a defined benefit plan. [In defined benefit plans, retirees receive a set amount per month during their retirement.] They previously contributed 7.5%.
• Union members will begin contributing 0.5% toward their retiree healthcare. They previously did not make contributions.
• The number of annual “banked leave” days – similar to unpaid furlough days – will increase from 6 to 12.
• Longevity pay will be eliminated for new hires after Jan. 1, 2012. Longevity pay is a benefit provided to union employees based on years of service with the organization (generally after 5 years of service). Employees would receive between 3%-9% of their prior year’s wages, paid out either in a lump sum payment or bi-weekly throughout the year.

In addition, tuition reimbursement and the “excessive vacation payout” program will be eliminated as of Jan. 1, 2012.

The contract includes a “me too” clause that would provide parity if another union contract is negotiated for higher wages or benefits. There’s also a “reopener” contingency – if the county sees at least a 2% revenue gain by the end of 2012, the contract could be reopened to consider wage increases.

Outcome: Commissioners unanimously voted to give initial approval to the collective bargaining agreement with the Michigan Nurses Association – Unit I. The board is expected to take a final vote on the agreement at its Aug. 3 meeting.

Trial Court Renovations

The board was asked to approve a resolution authorizing up to $1 million for the next phase of the Washtenaw County trial court consolidation of services at the downtown courthouse facility, where the juvenile court recently relocated.

Phase two entails renovation of the first floor of the courthouse. Commissioners had previously received a detailed briefing on this project from Donald Shelton, chief judge of the Washtenew County trial court, at their Jan. 19, 2011 board meeting. The downtown courthouse is located at the corner of Huron and Main.

Trail Court Renovations: Commissioner Discussion

Dan Smith asked for more details about a line item of $100,000 for furniture and equipment.

Dave Shirley, the county’s facilities manager, said existing furniture from the Platt Road location is being used as much as possible. But some items are needed – such as filing cabinets – due to the different configuration of the downtown courthouse. They’ll also need additional chairs, since the Platt Road facility didn’t get the ergonomic furniture upgrade that the rest of the county facilities received a few years ago.

D. Smith asked whether they could buy gently-used furniture, and Shirley said the county did that as much as possible.

Outcome: Commissioners voted to approve up to $1 million for the next phase of the Washtenaw County trial court consolidation.

Marriage License Waiting Period Waiver Fee

The board was asked to approve a $50 fee for waiving the statutory three-day marriage license waiting period. According to a staff memo, the current waiver fee of $5 does not cover the costs of the Washtenaw County Clerk and Register of Deeds in “interrupting other services to immediately fulfill a marriage license waiver request.”

County clerk Larry Kestenbaum attended Wednesday’s meeting and told commissioners that the $5 fee is too nominal – some counties charge as much as $100, he said. It would also apply to only a few applications. “This fee would only affect people who are in a hurry.”

Marriage License Waiting Period Waiver Fee: Commissioner Discussion

Barbara Bergman wondered why they weren’t raising the fee to $100 as well. Kestenbaum told her that his staff originally recommended an increase to $25, but he was proposing $50. The amount is in the purview of the county board to set, he noted, adding that he wouldn’t object to a $100 fee.

Bergman moved to amend the resolution to increase the amount to $100, but the motion died for lack of a second.

County prosecuting attorney Brian Mackie, left, talks with county clerk Larry Kestenbaum during a break at the July 6 board of commissioners meeting.

Rolland Sizemore Jr. said he wouldn’t support raising the fee to $100 because getting married “is supposed to be one of the happiest times in your life.” It already cost a lot of money to get married, and the county shouldn’t add to that.

Ronnie Peterson noted that it cost a lot of money to be born, get married and “certainly to die.” He recommended approving Kestenbaum’s original suggestion of $50, which Peterson said was respectful of the current economic conditions. It makes a statement about providing the expedited service at a cost that was somewhat uncomfortable, he said, but not too much.

Conan Smith began his comments by joking that he had hoped Kestenbaum would come forward with a package discount deal – for marriage licenses and concealed weapons permits. He then noted that this was actually an important increase, and not arbitrary. As the county reduces its staff and asks employees to adhere to their work plan, that approach gets compromised by last-minute requests, he said. It complicates the staff’s work. The increase is a disincentive for citizens to make such requests, and results in helping employees be as efficient as possible. Smith said he also appreciated that the standard fee for the three-day processing is unchanged.

Kestenbaum observed that processing a marriage license requires great attention to detail. All of the information must be correct: “It is not a frivolous thing at all.” C. Smith noted that it would be unfortunate if the paperwork resulted in someone inadvertently marrying the wrong person. “That’s not our problem,” Kestenbaum quipped.

Wes Prater also supported the increase to $50, saying that people spend much more than that on other parts of their wedding.

Dan Smith confirmed that the standard fee – to process the license in three days – hasn’t changed. Kestenbaum explained that more than 95% of the licenses are handled this way. Normally, he added, a wedding involves planning, and getting a license is part of that.

D. Smith then asked a series of questions to elicit more details about the process, prompting Sizemore to say, “You’re asking a lot of questions – is there something we don’t know?” [Smith is single.]

Alicia Ping asked how much the standard license costs. It’s $30, Kestenbaum said – an amount set by state statute that’s been unchanged for more than 40 years.

Ping disagreed with Prater and others, and felt that for many people, $50 was a lot of money. However, she said she understood that $5 was too low.

Outcome: Commissioners unanimously approved increasing the fee for expediting the marriage license processing to $50.

Drain Projects in Ann Arbor

Initial approval for five projects planned by the county’s water resources commissioner had been given at the board’s June 1 meeting. On Wednesday, the projects were before the board for final approval.

The projects, which require the county to back bond payments totaling up to $6.54 million, are all located in Ann Arbor: (1) Allen Creek drain cistern installation, downspout disconnection and tree planting – up to $330,000; (2) County Farm drain stream bank stabilization – up to $1.2 million; (3) Malletts Creek drain/Burns Park porous alley; Malletts Creek cistern installation, downspout disconnection, and tree planting; and Malletts Creek stream bank stabilization – up to $3.48 million; (4) Swift Run cistern installation, downspout disconnection, and tree planting – up to $75,000; and (5) Traver Creek cistern installation, downspout disconnection, and tree planting; and Traver Creek stream bank stabilization – up to $780,000.

Outcome: Commissioners voted to approve the drain projects in Ann Arbor, without comment.

Hearing Set on Agreement with Energy Office

Commissioners were asked to set a public hearing for its Aug. 3 meeting regarding a proposed interlocal agreement with the Southeast Michigan Energy Office Community Alliance (SEMRO). The Ferndale-based nonprofit (SEMRO) provides technical services to the county in identifying and implementing federal Energy Efficiency and Conservation Block Grant projects.

The energy office is a division of the Michigan Suburbs Alliance. County commissioner and board chair Conan Smith is CEO of the alliance. The board voted initially to join the energy office at its March 17, 2010 meeting. Smith abstained from that vote.

Outcome: Without comment, the board voted to set a hearing on Aug. 3 regarding an interlocal agreement with SEMRO.

Proclamation on National Training Institute Week

On the agenda was an item proclaiming July 30 through Aug. 5, 2011 as National Training Institute Week in Washtenaw County. The proclamation recognized the estimated $5 million economic impact of the National Joint Apprenticeship and Training Committee (NJATC) for the Electrical Industry – its annual training week brings about 2,000 people to this area. [See 2009 Chronicle coverage: "Electricians Juice Up Ann Arbor"]

The proclamation was introduced and read by commissioner Rob Turner, who was instrumental in convincing the NJATC to move its annual training week to this area. Turner described how he had worked with Greg Stephens, business manager for the International Brotherhood of Electrical Workers (IBEW) Local 252, and others to convince NJATC to hold its training in Washtenaw County, and how the community has reached out to make the NJATC members feel welcome.

Wes Prater added that credit goes to the Ann Arbor and Ypsilanti convention and visitor bureaus too.

Outcome: The proclamation declaring July 30-Aug. 5, 2011 as National Training Institute Week in Washtenaw County was passed unanimously.

Appointments

Commissioners unanimously approved the appointment of Scott Menzel to the Washtenaw County Workforce Development Board to represent the educational sector for a term expiring Dec. 31, 2012. Menzel is the new superintendent for the Washtenaw Intermediate School District. Commissioner Dan Smith commented that he knew Menzel when Menzel was superintendent of the Whitmore Lake school district, and Smith was glad that he’s brought his skills to WISD.

The board also appointed Robert Gray as a representative of the general public to the Washtenaw County Health Code Appeals Board/Public Health Advisory Committee for a five-year term, expiring Dec. 31, 2015.

Nominations for appointments to county boards and commissions are made by the board chair, Conan Smith, but require approval by the board of commissioners.

Misc. Communications

There are several opportunities for commissioners and the administration to share information during the meeting, as well as four slots for public commentary.

County administrator Verna McDaniel told commissioners that she’d be working with staff to develop a pro-active plan in light of state legislation that will end cash assistance to welfare beneficiaries who’ve been receiving aid for more than 48 months. About 900 people will be affected in Washtenaw County, she said. They’re working with Cynthia Maritato, director of the state Department of Human Services – and former director of the Washtenaw County department of human services – to see who will be affected by this law. She hopes to bring a plan to the board in early September.

Conan Smith noted that Nelson Meade, one of the founders of the county’s parks & recreation commission who has served on that commission for more than 35 years, is being honored at the national level as a public official of the year. Smith said it was a well-earned honor, and gave a “hearty congratulations” to Meade for his service.

Kristin Judge congratulated the county’s information technology department, noting that they had moved up from 8th place to 4th place in a national ranking of county IT departments. The ranking is from the 2011 Digital Counties Survey, conducted by the Center for Digital Government and the National Association of Counties (NACo). [The award will be presented on July 16 at the NACo annual conference in Portland, Oregon. Judge, a member of NACo's justice and public safety steering committee, will be accepting the award on behalf of the county.]

Misc. Communications: Public Commentary

Thomas Partridge spoke during the four opportunities available for public commentary. He called for the board to add an agenda item that would address the impact of Republican Gov. Rick Snyder’s budget, and urged commissioners to support a recall effort of Snyder, his administration and Republican legislators. It’s the only responsible thing to do for anyone who advocates for the disadvantaged and disenfranchised citizens, he said.

Partridge also called for reforms and changes to county government, and advocated for having an elected county administrator. [The Washtenaw County administrator is a position appointed by the board of commissioners.] Partridge objected to the redistricting decision earlier this year that resulted in decreasing the number of districts represented on the board from 11 to 9 – a change that will take effect for the 2012 election. He said it might be necessary to pursue legal action on this issue, and he urged commissioners to ask the county’s corporation counsel to look into the matter.

Public Commentary: Commissioner Response

Following Partridge’s first public commentary, Barbara Bergman – a Democrat from Ann Arbor – said that Republicans and Democrats on the board worked together, with the goal of bettering services for the county’s residents. They aren’t there to take political stances, she said, and it’s not their business to pass resolutions criticizing or supporting one political party or individual. [Partridge walked out of the boardroom midway through Bergman's remarks, and returned when she finished talking.]

Regarding Partridge’s comments about redistricting, Conan Smith pointed out that Brian Mackie was in the audience – and that Mackie, the county’s prosecuting attorney, was one of the five members of the apportionment commission. [As part of a mandated redistricting process keyed to the U.S. census results, the apportionment commission voted in May to adopt the 9-district plan.] Smith, a Democrat, said the commission had met frequently, and those meetings were public. The maps were displayed prominently in advance, he said, and the process had been extremely accessible. They did the job they were charged to do, Smith said, in a manner that comported with the law. He would not recommend that they encourage the county’s corporation counsel to get involved.

Dan Smith, one of three Republican county commissioners, also weighed in. He noted that he was the only county commissioner who attended every meeting of the apportionment commission. He agreed with Conan Smith that the process was handled properly, saying he saw no inappropriate actions.

[The Chronicle attended several meetings of the apportionment commission. The final plan that was adopted had been posted for public view shortly before the commission's final meeting. From coverage of the commission's final meeting on May 11:

The final vote was for a 9-district plan drafted by county prosecuting attorney Brian Mackie and revised with input from other Democrats on the apportionment commission, including [county clerk Larry] Kestenbaum and county treasurer Catherine McClary. It gained unanimous support from the full commission. [.pdf file of adopted 9-district county map]

Redistricting occurs every 10 years, based on population changes determined by the U.S. census. Until this week, only two plans had been offered: one for 9 districts, another for 12. However, just hours before Wednesday’s 5:30 p.m. meeting, several new plans were submitted for consideration. In total, 11 plans were considered by the commission – for 5, 6, 8, 9, 10, 11, 12, and 21 districts. One resident during public commentary said he’d attended several previous meeting, and that it was shocking to arrive and see so many new plans on the day of the final vote.

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

Absent: Yousef Rabhi

Next regular board meeting: Wednesday, Aug. 3, 2011 at 6:30 p.m. at the county administration building, 220 N. Main St. The Ways & Means Committee meets first, followed immediately by the regular board meeting. [confirm date] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public comment sessions are held at the beginning and end of each meeting. In addition, the board will hold a July 21 working session on the 2012-2013 budget, starting at 6:30 p.m. in the same location.

Next working session: Thursday, July 21, 2011 at 6:30 p.m. at the county administration building, 220 N. Main St. The working session will focus on the 2012-2013 budget.

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

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

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

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

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

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

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

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

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

Consolidation of Departments

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

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

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

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

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

Callan then gave an overview of each current department:

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

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

Consolidation of Departments: What’s the Plan?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Consolidation of Departments: Commissioner Comments, Questions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Brownfields and Packard Square

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

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

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

Absent: Leah Gunn, Rolland Sizemore Jr.

The housing commission is responsible for 355 public housing units spread over 18 sites – or around 50% of the affordable housing stock in the city – plus 1,300 Section 8 vouchers for a three-county area.

Kerry Laycock, the consultant who gave the city council a presentation on the reorganization of the housing commission, gave a slide presentation from the podium using this laptop computer. (Photos by the writer.)

Keys to the reorganization are beefing up the Section 8 program with a dedicated financial analyst and a program manager, and redefining roles of the executive director and deputy director, as well as outsourcing maintenance of the housing units.

Outsourcing maintenance will reduce the housing commission staff by six people – two temporary employees plus four union workers.

Alan Levy, who chairs the housing commission board, told councilmembers that the reorganization had already been approved by a 3-2 vote of the housing commission’s board at a special meeting held on Jan. 6, 2010.

The two dissenting votes, Levy said, were in overall support of the plan, but had reservations about the union employees whose positions with the housing commission would be eliminated.

Kerry Laycock, at the podium, gives the city council the grim verdict from a needs assessment he helped conduct of the Ann Arbor housing commission. Seated are Marge Novak, interim executive director of AAHC, and Alan Levy, chair of the AAHC board.

The need to reorganize, Levy told the council, was prompted by a difficult last few years dealing with personnel and staffing issues, as well as chronic underfunding of the U.S. Department of Housing and Urban Development (HUD).

What was the city council’s role in the reorganization? At its May 18, 2009 meeting, the city council had approved a contract with Schumaker & Company for $117,040 to perform a needs assessment for the housing commission. It’s the result of that recommendation that led to the adopted reorganization.

And for the next two years, the council may be asked to help bridge a $138,163 funding gap to help with the transition as the commission reorganizes.

Anecdotal Indicator of Public Housing Conditions

In the course of deliberations, mayor John Hieftje gave one anecdotal indicator that the housing commission was already beginning to turn the corner on some of its past difficulties.

He told his council colleagues that a couple of years ago, residents of Ann Arbor’s public housing had begun to visit his Friday open office hours to share complaints with him.

And Tony Derezinski (Ward 2), who serves as the council liaison to the city’s housing commission, described the housing commission’s situation during his most recent period of service as “a trying year.” He summarized it by saying, “It was a mess.”

However, Derezinski described the appointment of Marge Novak as interim executive director in May 2009 as “a godsend,” while emphasizing that the housing commission was still not “out of the woods.”

Hieftje said that six to nine months ago, the visits by public housing residents to his weekly office hour had stopped. Why had they shown up in the first place?

Problems with the Housing Commission

Kerry Laycock spoke on behalf of the consultant that had performed the needs assessment – Schumaker & Company. In the course of his presentation, he painted a picture that could fairly be described as grim.

That assessment had been based on staff interviews, community/stakeholder interviews, focus groups with public housing residents, financial analyses and benchmarking with other communities.

Measured against its mission statement, Laycock told the council, the housing commission was not doing that well. The commission’s mission statement reads [emphasis added for readability]:

Mission Statement

Ann Arbor Housing Commission (AAHC) seeks to provide desirable housing and related supportive services for low-income individuals and families on a transitional and/or permanent basis. AAHC will partner with housing and service providers to build healthy residential communities and promote an atmosphere of pride and responsibility.

But Laycock described a commission that provided desirable housing only in the sense that there were many people who needed a place to live and were signed up for a spot – the properties themselves, he said, were outdated and poorly maintained.

The supportive services provided were limited and not meeting the current needs of residents, he said. And he described the housing commission as a relatively isolated agency that had limited interaction with other community organizations and programs.

Some of the challenges faced by AAHC, Laycock acknowledged, were a result of an environment of relative instability caused by HUD. By its own measure, he said, HUD funds its programs at a level of 82% of what they need. The underfunding, plus the fact that funding decisions are made late in the year, had led to less-than-optimal operations by AAHC.

Given the unstable environment of HUD, Laycock said, it was important to secure additional funding, outside of HUD. Because AAHC had not done that, he continued, it was not able to make up for the HUD shortfall, nor provide support services needed by the residents of its housing, nor keep up on important maintenance and modernization of its housing stock. His presentation described the housing stock as amendable to better maintenance, but as outdated and inherently substandard.

Laycock described one approach to updating public housing as tearing it down and starting from scratch – an approach that had been taken in Grand Rapids, he said. However, Stephen Kunselman (Ward 3) drew out the fact that in Grand Rapids, the housing commission had been separated out from the city’s administration – something that Laycock’s analysis did not recommend. If anything, Laycock said, the AAHC should have a closer relationship with the city.

Adopted Solutions: Staffing and Maintenance

Laycock identified the key strategic objectives of 1) rehabilitating and redeveloping AAHC properties, 2) expanding funding to include non-HUD sources, 3) strengthening of support services, 4) improving management oversight and 5) improving internal efficiencies.

The reorganization adopted by the housing commission seeks to realize these objectives by redefining and adding administrative staff roles (a plus of two positions), while outsourcing maintenance of the properties (a minus of six positions).

Staff Roles

To understand the additions to the city housing commission staff that have been adopted, it’s useful to understand the distinction between the public housing versus the Section 8 part of the AAHC mission.

The low-income public housing component of the AAHC mission involves ownership, maintenance and management of places for people to live. The Section 8 housing choice voucher (HCV) program, on the other hand, is a voucher system – those who are served by the program receive a voucher that can be used to pay rent to a private landlord. In the Section 8 program, prospective tenants contact landlords directly, and landlords are supposed to screen tenants the same way they would those without vouchers.

The arithmetic of staff additions would add a financial analyst to the Section 8 program. Together with the upgrading to financial analyst of a current accounting clerk position for public housing, that would give each of the housing commission’s programs a financial analyst. Laycock described the advantage of the analyst over a clerk position: An analyst can interpret and summarize financial data and make recommendations – as opposed to a clerk, whose responsibility is more limited to recording and inputting data.

The second additional position would also go to support the Section 8 program in the form of a separate manager of that program.

Besides adding positions, the reorganization redefines the roles of staff, from site managers up to the executive director level. Site managers would no longer supervise maintenance staff – but they’d still have a relationship with the vendor for outsourced maintenance. The strategy will be to relieve these on-site managers of maintenance-employee supervision so that they can focus more squarely on meeting residents’ needs. That refocusing of task is reflected in a job title change from site manager to residency manager.

The executive director and the deputy director would be made regular full-time positions. The executive director will be less focused on operations than in the past, with a primary responsibility for strategic planning,  rehabilitation of existing housing, and development of new housing. The deputy director will split time between operations and grant writing. Winning grants is seen as key to bridging the HUD funding gap, as well as eventually covering the increased staffing costs of the reorganization.

Marge Novak, interim executive director of Ann Arbor's housing commission, explains to the city council that part of the goal of reorganization is to secure additional grant funding.

Optimism that there was grant money available that the AAHC commission was not currently exploiting – due to a lack of grant-writing resources – came from interim executive director of AAHC, Marge Novak. Sandi Smith (Ward 1) clarified with Novak that the AAHC was currently “leaving money on the table.”

And winning grants was the answer to a question Carsten Hohnke (Ward 5) had about how much funding the city council might be asked to provide over time – operations were ongoing expenses every year, he cautioned. The city council’s prior commitment to the housing commission for FY 2010 and FY 2011 is $90,000, but the financial implications of the reorganization – adding people and expanding existing roles – will amount to $228,163.

In his comments, mayor John Hieftje characterized the strategy as spending a little money in the short term in order to get someone in place who can go after more money in the form of grants.

The options for addressing the $138,163 difference, Laycock said, included using AAHC reserves, looking at funds held by affiliated nonprofits, using in-kind services from the city of Ann Arbor, and the sale/lease of maintenance vehicles as a part of the outsourcing contract. But Laycock gave city councilmembers a heads-up on Monday night that the AAHC could be asking them for money from the Ann Arbor general fund as well. That’s why Hohnke wondered if the request would be one that was repeated into the future.

Laycock and Novak seemed confident that the investment in grant writing resources would pay off – any additional request from the city council would be confined to achieving the transition to the new, reorganized housing commission.

Alan Levy, chair of the Ann Arbor housing commission board, clarifies a point with Jayne Miller, community services area administrator. In the background is Joan Doughty, director of the Community Action Network (CAN).

Also a part of the transition strategy would be the addition of new positions as more funds become available. Jayne Miller, community services area administrator, told the council that the time frame for the transition to financial sustainability was expected to be about two years.

Maintenance Outsourcing

Also a part of the gradual approach to the transition is the change to outsourced maintenance. There are two temporary positions that would be eliminated as soon as an initial contract with a maintenance vendor is signed. But four other American Federation of State, County and Municipal Employees (AFSCME) union positions would be absorbed elsewhere in the city workforce as positions become available.

Another aspect of the gradualness of the transition is that an outside vendor for maintenance will first engage in a pilot project that encompasses work currently done by two temporary employees – at a single building or site. The outside vendor would then assume additional work as the AFSCME positions transition to other positions within the city.

In his presentation, Laycock characterized the move to outsourced maintenance as the most controversial aspect of the reorganization, but stressed that is was not a matter of chasing dollars – the idea is to provide better maintenance of the properties.

There would be a request for proposals (RFP) process for the outside maintenance vendor, Laycock said, and he saw that as an opportunity for partnering with other agencies. He did not elaborate on that, saying that he did not want that possibility to affect the RFP process.

Councilmember Questions on AAHC

Other commentary by councilmembers covered a range of topics.

Potential Partnerships

The relative isolation of the AAHC from other entities with complementary missions was identified as a problem in the operational needs assessment.

Carsten Hohnke (Ward 5) asks for clarification about the potential for partnerships by the housing commission with other agencies.

So Carsten Hohnke (Ward 5) asked where the potential for partnerships was. Interim executive director Marge Novak described how some collaborations already existed – with Peace Neighborhood Center and Community Action Network (CAN). Further, she described how the county’s Employment Training & Community Services (ETCS) department provided meals to two of the public housing locations – Miller Manor and Baker Commons.

Alan Levy, chair of the AAHC board, added later that there was a memorandum of understanding with the Interfaith Hospitality Network that allowed three referrals per year on a priority basis for the homeless, with no wait-listing required.

Wait-lists

From Mike Anglin (Ward 5) came a question about wait-list times. Novak said that for public housing, the wait-list was around 700 people and that there were a couple hundred on the wait-list for Section 8. The Section 8 wait-list, Novak told the council, had not been open “in years.” The public housing wait-list had been opened a few times over the last few years. [Currently, the city of Ann Arbor's website indicates that the wait-list for public housing is closed.]

The city council had been asked earlier in the fall to approve a measure that allocated funds on an emergency basis to provide housing vouchers for homeless families. At Monday’s working session, Sandi Smith (Ward 1) wanted to know if these were the same kind of vouchers. Novak said that those came through the office of city/county community development. But Section 8 did include family vouchers, Novak clarified.

Smith also wanted to know if the problem with Section 8 wait-listing was a lack of supply – are there enough landlords? Novak described the problem as the hundreds of people who are waiting for vouchers as the larger issue. She said there were around 1,000 landlords in the three-county area who had properties available.

How Does Ann Arbor and Its City Council Fit In?

From both Ward 3 council representatives – Christopher Taylor and Stephen Kunselman – came questions about the nature of the city’s relationship to the housing commission and the council’s role specifically. After hearing Laycock explain that the housing commission had adopted the reorganization and that the council did not need to approve it, Kunselman asked: “What is our responsibility?”

Jayne Miller, community services area administrator, clarified that there was no funding responsibility – HUD is the funding agency. However, Miller continued, the city council approved appointments to the housing commission’s board. Further, she said, the city council had invested considerable resources in its commitment to affordable housing, and the housing commission was responsible for around half of all affordable housing units in the city.

Taylor wondered what the structure of the housing commission was with respect to the city’s actual organization. Specifically, Taylor was interested in how the housing commission’s staff related to the city’s bargaining units. [In his presentation, Laycock had described how part of the reorganization plan entailed a recommendation to adopt a compensation policy that would put pay at 90% of the market midpoint.]

In responding to Taylor, Laycock clarified that housing commission staff were, in fact, city employees. As such, he said, every mandate for Ann Arbor city employees applies to them – with no independent ability to attach any funding to those mandates. The HUD program, which involves a federal department that relies on local authorities, which in turn provide oversight to additional entities, was characterized by Laycock as a prescription for confusion.

Taylor also picked up on a data point about Section 8 vouchers that emerged in the presentation: 70% of voucher recipients are non-Ann Arbor residents. Taylor wanted to know if the AAHC looked for funding from the communities where they do reside. The clarification was that HUD assigns areas of service to each authority and that the AAHC serves a three-county region.

Taylor also elicited the clarification that there is in some sense a “margin” of benefit provided by Section 8 to the public housing component of the AAHC. That is, funding for Section 8 administration helps cover costs associated with the public housing part of the AAHC.