In this Chronicle file photo from May 2010, Bill Reynolds, right, talks with Washtenaw County commissioner Wes Prater. Reynolds was interviewing for the deputy county administrator job – he was hired for that position in June 2010, but has been on medical leave since April. He recently resigned, effective June 17.

Two other departures were announced at the June 1 board of commissioners meeting and June 2 working session: Joanna Bidlack, who has served as support staff for the board for several years; and Anya Dale, with the county’s economic development and energy department, who has been taking the lead in a Washtenaw Avenue corridor improvement project.

Dale has accepted a job at the University of Michigan’s Office of Campus Sustainability. She also serves as a board member of the Ann Arbor Transportation Authority (AATA) – that position is appointed by the city of Ann Arbor’s mayor, and Dale says she plans to remain on the AATA board. Bidlack, who recently completed a master’s degree at Eastern Michigan University, has taken a job at General Electric’s operation in Van Buren Township.

Reynolds, who was hired as the county’s No. 2 administrator a year ago, began paid medical leave in early April, citing post-military issues. [He was hired at a salary of $138,000.] On Tuesday, county administrator Verna McDaniel told The Chronicle that Reynolds turned in his resignation in late May, effective June 17. He has been interviewing for county administrator jobs elsewhere, and had been one of three finalists for the county administrator job in St. Croix County, Wisc. When The Chronicle has pressed for additional details about Reynolds’ leave of absence, county officials have characterized it as a personnel matter and declined further comment.

The staff changes come a year after the May 2010 retirement of county administrator Bob Guenzel, who had worked for the county for 37 years. Now under the leadership of McDaniel – herself a long-time county employee – the county is also addressing a roughly $17 million deficit for 2012 and 2013, and is undertaking some departmental reorganizations in part as a response to declining property tax revenues. The county employs 1,331 people, including elected officials and 1,090 employees who are represented by unions.

In interviews this week with The Chronicle, both McDaniel and Conan Smith – chair of the board of commissioners – said this kind of turnover has been anticipated, in light of the county’s financial situation and the overall economy. There’s an understanding among employees that the workforce will be shrinking, Smith said, and that if someone finds an opportunity elsewhere, they’re taking it.

McDaniel said there is no mass exodus of employees, but acknowledged that there will be additional departures – including retirements – before the end of the year. She’s developing recommendations regarding her administrative team, in light of the recent departures, and plans to update the board at their Thursday, June 16 working session.

Transition from the Top Down

Smith said he wasn’t overly concerned with the transition. It’s to be expected in the current economic climate. He noted that the county is taking a double hit – with the retirement of long-time, experienced employees with deep institutional knowledge, and the departure of young talent that might, under different conditions, be expected to stay and eventually take leadership roles within county government.

In addition to Guenzel, two other top county managers retired about a year ago. Peter Ballios, the county’s finance director, and Trenda Rusher, director of the county’s large employment training and community services department (ETCS), retired at the end of 2009. Rusher had been with the county nearly 30 years, while Ballios had logged more than 37 years as a county employee.

All three of those positions were filled with internal promotions. McDaniel, who’d been deputy administrator under Guenzel and before that was executive director of human resources, was the only candidate interviewed for county administrator, and was promoted in May 2010.

Ballios was replaced by Kelly Belknap, who was promoted to finance director in August 2010. She is now serving as interim deputy county administrator.

While the retirements of Guenzel, Ballios and Rusher were anticipated, more recent departures are coming from the county’s younger managers and staff, and are likely tied – at least in part – to the county’s financial uncertainty and expected reorganization.

In addition to Bidlack and Dale, other recently announced departures include:

• James McFarlane, who led the county’s information technology department, has taken a job in Lansing, where he’ll work for the state’s department of technology, management and budget. One of the top executives in that department – David Behen, the state’s chief information officer – is himself a former Washtenaw deputy county administrator, who left that job in 2009. McFarlane’s last day with the county was June 10.
• Jennifer Watson, the county’s budget manager, has resigned to take a finance job with the University of Michigan – her last day is June 24. Watson’s job at the county was being eliminated as part of a reorganization in the financial department.
• Diana Torres-Burgos, the county’s public health medical director, is leaving later this month – at their June 1 meeting, the county board approved hiring her replacement, Monique Reeves.
• Dave Wilson, who works in the information technology department and has been with the county more than 30 years, is retiring this month.

McDaniel praised the employees who are leaving, including Reynolds, describing them as high-performing, highly marketable individuals. County employees know that the organization is working to align expenditures with revenues, she said, which means there will be a retooling of departments and jobs. As opportunities arise elsewhere, McDaniel said she doesn’t blame people for taking advantage of them. In several cases, they’ll be making significantly more than the county is paying, she said.

Reynolds had been hired with the expectation that he’d play a major role in developing the budget and in working with labor. McDaniel said he laid some solid groundwork before leaving, just as the formal budget process got underway. Belknap took over as interim and “we didn’t skip a beat,” McDaniel said. They’ve planned expedited labor negotiations, and nine meetings are planned with union leaders in the coming weeks, she said, most of them full-day discussions.

The county has targeted $8 million in labor concessions to address the projected 2012-2013 deficit. They’re on course to wrap up union talks by mid-July, McDaniel said. Caryette Fenner – president of the AFSCME local 2733, the largest union representing county employees – could not be reached for comment for this report.

McDaniel said the organization, including labor, needs to get in front of changes that are occurring at the state level, which will impact the county. Specifically, she cited proposed 80/20 legislation that has already been approved by the Michigan state Senate, and is being considered by the House – it would essentially require public employees to pay 20% of their health care costs effective Jan. 1, 2012. The county is also trying to ensure it won’t hit any of the financial triggers that would result in the state appointing an emergency financial manager to take over. Other counties are facing deeper revenue declines, McDaniel noted, but Washtenaw County needs to work hard to make sure its financial situation is stable.

Rolland Sizemore Jr., former board chair who’s now chair of the board’s ways and means committee, told The Chronicle he believes that the budget process is going better this time than in 2009. [The county plans its budget in two-year cycles.] He said he isn’t concerned about the recent departures, adding it provides an opportunity for others in the organizations to advance, or brings in new people who’ll contribute a fresh perspective.

Sizemore also pointed out that even if people weren’t leaving, the organization would be changing anyway, as the result of significant reorganizations that are underway. Another $8 million in savings is expected from departmental reductions and consolidations.

Reorganizations: Community Development, Health Services

Additional departures will result from the reorganization of three county departments into a new office of community & economic development. The merger involves the office of community development (OCD), ETCS (the employment training and community services department) and the economic development & energy department.

At their May 5 working session, county commissioners were briefed by Mary Jo Callan, the current OCD director who is expected to lead the new office. She told the board that the goal is to provide a more coherent approach to the broad spectrum of community development, from providing for basic needs to helping people get jobs. Callan also said the move is intended to cut costs and eliminate duplication of efforts, while making it easier for residents to get the services they need.

In total, the departments employ nearly 60 people with a combined budget of about $16 million. While the leaders of ETCS and the economic development & energy department – Patricia Denig and Tony VanDerworp – are expected to take management jobs in the newly formed unit, other staff cuts are expected to result from the change.

County board chair Conan Smith said 10 positions will likely be eliminated after the reorganization. The job loss would likely have been more draconian without the consolidation of these departments, Smith said. If left as a standalone entity, for example, the economic development and energy department – with a staff of four, including Dale – would almost certainly have been eliminated, he said. Now, it’s likely they’ll find positions for those staff members within the combined department.

The board is expected to consider a proposal for initial approval of the merger at its July 6 meeting. The proposal had been planned for the board’s June 1 meeting, but it was postponed to allow for more talks with union leaders.

Another major restructuring is in the works for the Washtenaw Community Health Organization (WCHO), the Washtenaw Health Plan and the county’s Community Support & Treatment Services (CSTS) department. There are many overlapping services among those three entities, Smith said, and WCHO is “driving the boat” on the proposed reorganization. WCHO is a partnership between the county and the University of Michigan that provides services for people with developmental disabilities, emotional problems, mental illness or substance abuse.

The end result of the restructuring, Smith said, will likely be diminished responsibilities for CSTS. Because WCHO is formed through an intergovernmental agreement, the changes are being negotiated among partners – there are many moving parts, he said. The board will be updated on the consolidation at its July 7 working session.

Looking Ahead

Smith there are several things the county might do to make it more attractive for its younger workforce to stay.

For example, the county has taken a fairly traditional approach to setting compensation, with a bias toward rewarding longevity. Smith cited a change in the last budget cycle, when the county increased the number of years it takes before employees are vested in the pension plan. Employees are vested after eight years of service. However, Smith said that in general, the average job tenure for the “Millennial Generation” – also known as Generation Y, now in their 20s and 30s – is around six years. In that context, it’s hard for some young employees to see their place within the county government, he said.

One possibility would be to somehow increase the portability of retirement benefits, Smith said. Right now, the Municipal Employees’ Retirement System (MERS) is portable if you move to certain other government entities – but not if you take a job in the private sector or at non-MERS institutions like the University of Michigan. That’s one place to look for reform, Smith said.

The county’s overall benefits structure is another area that might be addressed, Smith said. Now, non-union compensation is typically based on what’s negotiated with the unions – though non-union workers have no say in the negotiations, he noted. [Of the employees mentioned earlier in the article, only Dale and Wilson were represented by a union: AFSCME Local 2733 – Unit A.]

Professional development is another area to consider, he said. Because of budget constraints, spending on staff training and conferences has been cut back dramatically over the past few years. Although Smith noted that there’s a culture of providing leadership opportunities at the county, that needs to be highlighted and institutionalized, he said. Younger employees want to be engaged and part of the decision-making process, Smith said, and they need opportunities to do that.

Saying that Smith’s ideas are worth exploring, McDaniel acknowledged the need to ensure that the county attract and retain the best possible talent, including people with a passion for public service.  More leadership opportunities within the county will emerge soon, she said – it’s expected that additional retirements will be announced later this year.

“This is a time of change, and we must embrace it,” McDaniel said. Observing that it sounds cliché, she added: ”We have to reinvent government.”

Smith said McDaniel has done an impressive job at a difficult time, going through this transition with fewer financial resources and less institutional expertise, because of retirements. Dealing with the projected $17.5 million deficit requires fundamental change, he said, and will make many people unhappy, upset and confused. “It’s going to be a bumpy ride, unfortunately.”

There’s also a cultural change underway, Smith noted. In the past, Guenzel would develop a budget with his staff and present it to the board in the fall. Now, the board has changed the rules of the game, he said, and is asking for more input in the budget process. Smith said that creates more stress and work for the administration during a time of upheaval. In addition to board budget retreats held earlier this year, they’ve recently scheduled five new working sessions focused on the budget: on June 16, July 21, Aug. 18, Sept. 15 and Oct. 13.

“Times are different now,” Smith said. “We’re adjusting to a new reality.”

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