Local in Ann Arbor

How a resolution passed by the City Council could endanger needed funding for the mentally ill of Washtenaw County.

Those of us of the wonkish persuasion are always serious, often dogged, and probably viewed by others as rather dull in our insistence on correctness and data.  We are not usually the ones to be seen at the front of the crowd, waving a sign around.  But occasionally there comes a moment so potent in its wrongness that we can progress to that state known as “hair on fire”.  This has been characterized as ”in a state of extreme agitation,” one stage above ”wild-eyed” and just below ”freaked out, totally out of control.”  My hair on fire moment came on Friday night (June 30), when I learned (via a tweet from Council member and candidate Chip Smith) that the Council would consider a resolution to reallocate funds from a County millage that has not yet been approved by the Board of Commissioners, has not appeared on the ballot, has not been endorsed by the voters, and in which funds would be used for a different purpose than the millage proposal states.

The resolution (item DC-3) was sponsored by Mayor Christopher Taylor and three of his “faction”, CM Zach Ackerman, CM Chip Smith, and CM Jason Frenzel.  All except for Taylor are up for re-election this fall.  All have primary opponents.  This is an especially consequential election because the winners will serve for a full three years (the City Charter was recently changed to designate four-year terms, but this is staggered to eliminate the odd-year elections). Monday (July 3) came and the Council approved the resolution by what is coming to be the expected balance of votes, 8-3. (In other words, the Taylor faction vs. the Eaton faction; or, if you prefer, the Council Party vs. the Neighborhoods.)  In simplest terms, the resolution states that the City of Ann Arbor will take money collected by the County for mental health purposes and “repurpose” it to pet projects of Taylor and his followers, namely pedestrian safety, affordable housing, and climate change.

ADDENDUM: Here is an excerpt from the resolution.  The resolution refers throughout to a “General Fund Rebate”, which is not indicated by the County ballot language and for which there is no provision.

Resolved, THAT if the Board of Commissioners puts the Millage on the November 2017 ballot, City Council intends to consider a General Fund Rebate Use Policy Resolution, which resolution would in further detail state Council’s intent to use the General Fund Rebate for the duration of the Millage in the following amounts, for the following purposes:

•                     20% to improve Pedestrian Safety (e.g., Enforcement Augmentation, Crosswalk Improvements, RRFBs, Streetlights) (operating & capital)

•                     40% to effect the goals of the Affordable Housing Needs Assessment (a/k/a Washtenaw County Housing Affordability and Economic Equity Analysis) and to increase Workforce Housing (operating & capital) with guidance by the Housing and Human Services Advisory Board

•                     40% to effect the goals of Ann Arbor’s Climate Action Plan (operating & capital)

It is so obviously political posturing that it hardly seems worth mentioning.  Or, it is a sincere difference of opinion on priorities, which is even more concerning.

ADDENDUM: In terms of priorities, the following excerpt from the resolution is puzzling.  Are they encouraging the County to look elsewhere if more money is needed for mental health?

Resolved, THAT mental health services and public safety are fundamental community needs and if the Board of Commissioners determines that there are insufficient resources to sustainably address these needs in a manner that meets community aspiration, City Council encourages them to seek additional funds.

The County Burden

The background to this event and the reasons I find it so outrageous lie in the role that County government plays in Michigan.  As a former County Commissioner, I’m very aware that County government takes care of many housekeeping tasks that affect us all, often without much fanfare.  Most of these are what are known as “mandates”, namely responsibilities decreed by state law.  Ann Arbor residents who don’t get out much are often unaware of County activities, since they are just the machinery that runs in the background.  One good example is community mental health services.  Counties have historically been responsible for all aspects of public health, including environmental health, medical issues (for example, communicable diseases and other general public health hazards), and mental health.  These are truly “global”, or in this case, county-wide services and are utilized at different levels by different localities, but they are all critical to a healthy county community.

Mental health services in Washtenaw County have gone through quite a number of different arrangements.  At one time it was simply a County department.  Then it got picked up by the UM health system as part of Medicaid-funded services.   There was something called the WCHO (Washtenaw County Health Organization) that more or less foundered under some administrative challenges.  (The actual patient contact was through County employees, in CSTS [Community Support and Treatment Services], under contract with the WCHO).  Meanwhile, the State of Michigan has been cutting funding for community mental health services.  In 2016, the Board of Commissioners reached an agreement with the unionized employees of the newly formed Community Mental Health (CMH) by providing some bridge funding from the general fund reserves. But the money problems continue.  As a recent report in the Ann Arbor News notes, the opioid crisis has magnified the problem.  But what doesn’t help is that the State of Michigan is proposing to turn mental health services over to private enterprise, and limit it to Medicaid recipients.

So here is where we are.  We have a number of desperately mentally ill people in our county (many of them in urban areas and some of the same people who populate our homeless shelters).  It is the County’s responsibility to take care of their needs, if anyone will. Who else is there?

But as the need grows, the money available shrinks.  Thus, the desperate move to try to persuade countywide voters to vote for a millage in these tax-averse times.

Enter the Sheriff

An additional item on the proposed millage would provide money to the Sheriff’s Department for deputy service.  This might seem odd.  We’re talking about mental health, and suddenly you want to pay for more police?  But as the well-respected Sheriff Jerry Clayton made clear to the Commissioners, county deputies are an essential part of the mental health response system.  Who do you call if someone is “acting out” or seems to have suffered some sort of catastrophic collapse?  You call 911.  The dispatchers are likely to send a deputy (or Ann Arbor or other police) if any kind of violence is indicated.  But, as Clayton persuasively made the case, the current system of paying for those deputies is not working very well now.  It relies partly on County general funds (also limited) and on local government funds (for deputies under contract).  Everyone is short. Thus, the County Administrator, Gregory Dill, said in a recent memo (as quoted by the Ann Arbor News)

Moving forward, it is apparent to all stakeholders (Sheriff’s Office, county administration, and contracting partners) that the current financial architecture is not sustainable beyond the proposed contractual agreement through 2021.

The matter of paying for the Sheriff’s deputies has a troubled recent history.  I reviewed it in this post from 2013, which is now out of date. There has been some softening around the edges since Clayton took charge.  But basically, the outsize need for deputies in Ypsilanti Township (who use these deputies as their police force) has unbalanced that budget.  Deputies in general are supposed to respond to calls where needed, but we can’t expect Ypsilanti Township to pay for mental health issues throughout the urban area of the county.  Yet, cities such as Ann Arbor (who have their own police forces) pay for the Sheriff’s services through the County general tax millage, and thus are subsidizing Ypsilanti Township.  This has caused a conflict in the past.  Doubtless, this was what Commissioner Conan Smith was thinking with his comment at an April 21 BOC meeting, as reported by the Ann Arbor News.

Commissioner Conan Smith, D-Ann Arbor, suggested Thursday night there could be fairness issues raised with a countywide tax for public safety, as some urban communities with their own police departments might feel it would disproportionately benefit other communities in the county.

Smith did, however, follow this with another reflection.

Though, Smith said, if it is a countywide tax to support both public safety and mental health, then maybe it would balance out, as the mental health services might be largely going to people in urban communities.

A Calculated Millage Proposal

It seems likely that it was those regional equity calculations that led the BOC (at their Ways & Means meeting of June 7, 2017) to approve (tentatively) a draft ballot language that granted Ann Arbor a piece of the revenue from a mental health funding issue.

They had a model to follow.  The voters of Washtenaw County enthusiastically endorsed a millage intended to fix county roads on November 8, 2016.  This in spite of the fact that roads also have a rural/urban split in taxation.  Rural areas (including villages) of Washtenaw County are serviced by the Washtenaw County Road Commission (WCRC).  That funding comes directly from the State of Michigan.  Cities like Ann Arbor also receive state funding, but on a different line item, and are responsible for their own road work.  So how to pass a millage to fix roads across the county without running into the problem of Ann Arbor paying for roads in Lima Township?  Here is the ballot language adopted:

Shall the limitation on the amount of taxes which may be imposed each year for all purposes on real and tangible personal property in Washtenaw County, Michigan be increased as provided in Section 6, Article IX of the Michigan Constitution and the Board of Commissioners of the County be authorized to levy a tax not to exceed one half of one mill ($0.50 per $1,000 of state taxable valuation) for a period of four (4) years, beginning with the December 1, 2016 tax levy (which will generate estimated revenues of $7,302,408 in the first year), to provide funding to the Washtenaw County Road Commission, Washtenaw County Parks and Recreation Commission, and the various cities, villages, and townships of Washtenaw County to maintain, construct, resurface, reconstruct, or preserve roads, bike lanes, streets, and paths in Washtenaw County?

So, as explained on the WCRC web page, those taxes collected from cities were passed along to the city in question for repair of roads in their own jurisdiction.  But the County kept a leash on those funds.  Notice the wording in the ballot language?  “provide funding…various cities…to maintain, construct, resurface (etc.).  In other words, the taxes collected were clearly going to go to roads.  Further, every road in Ann Arbor that is reconstructed using these County taxes has a sign letting us know that our “taxes are at work”.

Here is the actual text of the language in the tentative mental health item.

Shall the limitations on the total amount of taxes which may be levied against taxable property within Washtenaw County, Michigan, as provided for by Section 6 of Article IX of the Michigan Constitution of 1963, be increased up to the amount of $1.00 per thousand dollars of taxable valuation (1.0 mills) for a period of ten years, 2018 through 2027 inclusive, which shall raise in the first year an estimated $15,433,608.00 which shall be used as follows: 37% of the total millage shall be allocated to the Washtenaw County Community Mental Health Department (whether constituted as an agency or an authority) to be used for mental health crisis, stabilization and prevention efforts and to prevent unnecessary incarceration of individuals with mental health needs; 38% of the total millage shall be allocated to the Washtenaw County Sheriff to ensure continued operations and greater cooperation with the mental health community; and 25% of the total millage shall be allocated to those jurisdictions within the County which maintain their own police force (Ann Arbor, Chelsea, Milan, Saline, Ypsilanti, Pittsfield Township and Northfield Township) at a rate proportionate to their respective taxable values?

There is a major error here.  Notice: the first two items say specifically that mental health is the point of the levy.  But the last item simply allocates a portion of the millage to several local jurisdictions, including Ann Arbor, without a specified use.  It appears on the face of it that this allocation is being made with no strings attached.  It must have been this wording that caused City Councilmembers who have an election looming to race to pick up the goodies like kids at a parade.  The effect is to ask County voters to approve a tax on their property that will partly be translated into a free gift – or, as the Taylor group are wont to call it, a “rebate”- to Ann Arbor and other cities.  But this does not advance a solution to the need, which is mental health funding.  Clearly, the BOC needs to repair this language before final approval.

So some will say (and have said): Why is this bad?  Why can’t Ann Arbor use the money as they see fit?  Several reasons.

• By rushing this declaration, there has been no time or opportunity to review priorities for the City.  We all like pedestrian safety and affordable housing and decry global warming.  But most budgetary decisions are made with some definite plans specified for how the money will be used.  That is the job of the City Administrator.  Then the Council gets to debate those uses of the money vs. others.  In this case, there is, for example, no actual plan to advance affordable housing, unless it is simply thrown into the huge deficit created by the Housing Commission’s ambitious plans. (This will not help everyone’s wish for affordable workforce housing, a.k.a. lower rents for young professionals.)  Would it simply go into an account to be drawn on later for unknown projects?
• There is a question whether the County can legally ask voters to approve taxes for unspecified purposes.  There are laws and rules regulating ballot language, and they are pretty strict.  You can’t say “give me money for roads” and then spend the cash on fixing up your IT system.  Just specifying that money will go to various jurisdictions is not likely enough.
• There are state law limitations on general fund appropriations, with caps on what local governments can assess in a “general ad valorem property tax”   (yes, it’s complicated).  This has been raised as a possible obstacle by a couple of local lawyers, including CM Jack Eaton, who asked this question of the City Administrator during the Council meeting of July 3. “Does the transfer of this county tax from tax levies on Ann Arbor residents with the subsequent pass through to the City have the effect of exceeding the City Charter limit on millage assessed for general government purposes?” ( The answer was that not enough was known about the County measure yet.)

Most of all, this action by the City Council and the unanswered questions it leaves is likely to be destructive to the success of the millage proposal itself.  Will the voters of Ann Arbor approve it?  It is so fuzzy that it would be difficult to explain.  Measures that are too complicated and too poorly explained have a bad history at the ballot box.

But why should the voters in the rest of the County, especially outside the urban area (where neither the mental health services nor the expanded Sheriff’s deputy coverage are locally urgent) – when they are also told that Ann Arbor is going to cream off a substantial fraction of the proceeds for its own purposes, none of which are likely to sound very relevant to those “out-county” voters? After all, the residents of those small western townships and villages are already subsidizing Ypsilanti Township’s deputies and the County mental health services, though they likely use very little of them.  The urban area (especially Ann Arbor and Ypsilanti City and Township) probably is home to most patients with the CMH.  We’d hope that the voters outside the urban area would support needed mental health services county-wide.  But why would they vote to send Ann Arbor a check?

A Possible Resolution

What I’d like to see the BOC do is to separate the public safety piece and the mental health piece into two separate millages.  Each of them could be a smaller amount since the 25% designated as a giveaway could be left out.  This will perhaps make the Sheriff’s needs somewhat more vulnerable, but with a persuasive, well-defined use spelled out for the extra money, I would hope that we would all vote for it.

It seems likely that this will be addressed on July 12.  I hope that our County Commissioners will fix this.  It is important.

UPDATE: Commissioner Conan Smith kindly sent along a memo (Smith memo 06072017) that he had written to the BOC for the discussion on June 7 about the millage ballot item.   It has many recommendations for process, including this:

General Distribution
I believe the distribution should be articulated by policy so that agencies and partners have a reasonable expectation about funding and the Board of Commissioners maintains control of the funds. My preference is that this be described in broad strokes as follows:

•  37% to the Washtenaw County Community Health
•  40% to the Washtenaw County Sheriff’s Office
•  23% to Community Safety Net Grants

And the “Community Safety Net Grants” are defined in this way:

Community Safety Net Grants

•  Annually available by formula to communities that currently provide their own police subject to the objectives and criteria established by the Board of Commissioners (similar to JAG program funding)
•  Restricted to public safety and mental health activities
•  Requiring a “maintenance of effort” from local units to ensure our funds are enhancing, not replacing, locally generated revenue.

Now that makes sense.  I’d like to know who persuaded a majority of the BOC to make the last portion of the millage into a free gift to the City of Ann Arbor.  (Felicia Brabec was not present.)  It is hard not to suspect some political dealing.  I hope Cm Smith will give it another try.

SECOND UPDATE:   Some of the mystery as to the urgent need for cash that evidently precipitated this move can be gleaned from Environmental Commission minutes.  A request was forwarded from the Energy Commission to support their solar program.

Resolved, The Environmental Commission recommends that the City Administrator direct appropriate City staff to work with the Environmental Commission and Energy Commission on identifying potential alternative revenue sources that would generate $1-3 million dollars per year to support community energy and climate programs by August 1st, 2017 for presentation to City Council, and that the Solid Waste Fund support one half of one of these positions for work to improve waste diversion in multi-family rental housing and to expand organics collection;

This is from April minutes but the action date for Council is shown as 7/3/2017, which is when the resolution to take money from a county millage apparently looked like a good Hail Mary pass.

THIRD UPDATE: It appears that Conan Smith was simply playing me with all that additional conversation.  He was apparently the person who suggested the dodge in the first place.  Unfortunately, the BOC approved the language as stated, including the “rebates” to local units.  According to Mary Morgan of CivCity , the vote was 5/4 in favor, with “out-county” commissioners voting against it.

FOURTH UPDATE: Here is the Ann Arbor News report on the BOC vote and the revised millage issue.

FIFTH UPDATE: Here is the Final language – County mental health and public safety millage.

SIXTH UPDATE: The Ann Arbor News has an article on how the tax rebate would be spent. 

SEVENTH UPDATE:  Several citizens spoke at the August 2, 2017 Ways & Means meeting regarding the millage.  The minutes do not indicate the substance of their remarks.  Minutes indicate that Cmr. Alicia Ping stated she would consult the Attorney General about the language of the ballot proposal.

EIGHTH UPDATE: The September 6 Ways & Means agenda includes an ordinance to designate the spending of the millage money coming to the County.  Too bad they can’t designate the monies in the rebate. 

CONCLUDING UPDATE:  The measure was well received on the November 7, 2017 ballot.  As reported by the Ann Arbor News, it won by nearly a 2-1 margin.

ADDENDUM:  Here is a good review of the funding issue for statewide administration of community mental health, from Bridge Magazine.

NOTE: There is a follow-on post on this subject.  See When Can A Win be a Losing Proposition?

 

 

 

 

 

 

 

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