March 2009 Townhall Questions and Comments

Below are questions and comments from the March 2009 Town Hall Meetings. You can find more about the meeting, including a details agenda on the  March 2009 Town Hall Sessions page.

Financial State of the County Overview

• How many employees?
  According to most recent figures there are 1413.19 FTE (Full Time Equivalent) with 81 position vacancies
• Are increases in personnel services assuming flat or increased salaries? 
  Increases in personnel services assumes increases. 
• Where do we stand in terms of foreclosures relative to other counties? Washtenaw County is about the same proportionally.
• What is SEV? What is taxable? What is CPI?
  Please see the Glossary for definitions.   Also see this explanation from the Treasurer.
• Do these numbers include the non-general fund depts.?
  This series of 9 town hall
  meetings included over
  over 250 employee participants.
  
  No C just General Fund Departments and appropriations from the General Fund to Non General Fund departments.
• Will 318 jobs cover it into the future?
  318 FTE is the way we've translated the $26M shortfall into positions. We don't expect that the 2010/2011 budget will require 318 position cuts because we are employing many different strategies. However, we don't know that $26M will be the end of the adjustments we need to make. We could see (and are predicting) declines in revenue in 2012 and 2013.
• What about the deficit for this year?
  $1.2M is the current estimate.
• What if we pass a balanced budget and still end up spending more than we have?
  County governments, unlike the federal government, cannot have operating deficits. Every budget needs to be balanced at the end of a fiscal year. There are reserves to protect against that.  We will do everything in our power to avoid that. We work closely with departments to monitor expenditures and revenues. Most reserves are just that, reserved for a specific purpose. It is also important to keep general reserves at particular levels to maintain our bond rating. 
• Any limit on how fast taxes can go down?
  The Headlee Amendment and Proposal A both have the effect of limiting how fast taxes on a particular property or across the board can increase. However, there is no limit on how fast property taxes can decrease. 
• Is there any way to increase our revenue?
  We cant raise tax millage, the stimulus will help a little bit, Medicaid dollars that go to the state will trickle down into some of our health programs. 
• Have you identified county budget dollars that are used to leverage federal, or other dollars?
  Yes. The Board is very interested in understanding how our dollars leverage dollars from other organizations.
• Can we sell bonds and get through this by borrowing?
  We don't think that borrowing money to pay for operating expenses is sound fiscal policy.

• How do you project to 2013?

  It is difficult, if not impossible to predict what will happen several years out. The further out, the more guessing. But so far there aren't signs that we've reached the bottom.

• What do I tell my neighbors C are we out of money?
  We wont/can't go out of business. We will continue to receive revenue and we must conduct mandated services.

• Do people know what they are doing when they fight their way down in assessments. Dont fight your assessment!
  It is unfortunate that assessments are going down and that people are fighting to pay less taxes and that that is bad for us revenue-wise. However, taxpayers have their own financial burdens and shouldn't pay more than they owe in taxes.

How Will We Balance the Budget?

• Is reduction in the workforce the only way that this is happening?
  Balancing this budget will require revenue generation and/or savings from multiple areas. Please see Budget Balancing Options for 2010-2011 for a listing of the categories or 'buckets' that are being considered.

Stimulus

• Stimulus money?
  We have just received $3M to Community Development for neighborhood stabilization. But that money is for a specific purpose and for a specific time period. We are trying to be creative, but for the most part, this kind of funding doesn't help our general fund bottom line.

Retirement

• Value of the pot of retirement money that went to WCERS C what happened to that and how does that impact us?
  We expect to have new information from an actuarial report in June. The actuarial report will look at the assets (value of investments) and liabilities (potential payout over time) in WCERS and tell us where we stand.

Universities and other Local Governments

• Does 2010/11 include Pfizer?
  Yes, we have estimated the reduction in real estate taxes. Pfizer is also appealing the property assessment which might additionally lower the tax revenue from those properties.
• Would a city income tax help?
  County governments in Michigan cannot levy income taxes. Cities can and Ann Arbor and Ypsilanti have considered it from time to time.

• What are other counties doing?
  We are looking at what others are doing in terms of employee compensation, programs, levels of funding, etc...  In terms of the size of our challenge, counties to the east of us are experiencing similar situations. In the rest of the state, many counties didn't see the size of the bubble that we did in the real estate market. Their revenue didn't spike, and it won't drop as dramatically either.

• Can we get money out of Pfizer?
  That would be nice, but no. They will pay the amount of taxes that they owe, but other than that we can't get more.

• Parks & Recreation has their own millage. Is there a way of sharing cost with them?
  Parks & Recreation pays for the services provided through the Cost Allocation Plan (CAP). That is all that they can contribute. Their funds are very targeted.

• What about the redundancy of local governments and at the state capital?
  There is legislation that would restructure local government in Michigan pending at the state legislature. We don't expect that legislation to pass. We also are confident in the partnerships we have with local governments in Washtenaw County. 
• What about local units services?
  We have engaged in services to local units of government on a fee basis for technology and human resources support. For the most part, it helps local governements get access to a broader array of services for a lower cost than they could get by hiring someone. For the county, we have done it on a cost recovery basis, so it isn't bringing in significant money for our general fund.
• In projections, are we going to increase expenditures in the partnerships?
  No.
• Can the city of Ann Arbor help us?
  They are in a little better shape because their tax base is better off than the rest of the county and we are working together on partnerships, primarily around the data center.

• What are other counties doing and how bad are their deficits? Ottawa, Kent, Ingham, Kalamazoo. They are projecting smaller deficits. Why are we so far out?
  Some of the comparables didnt see revenue rise as high and as fast and arent falling as fast.

• Are the universities investing in any significant way?
  The universities are investing in infrastructure and programs. These investments are good for the long term health of our community in terms of making it an attractive place to live and atracting people (taxpayers). However, the universities don't invest in services that the county provides, so there isn't much possibility there.

• Stem cell research $$ - will that help?
  Stem cell research money will help in the indirect way that university investments do. The UM has made tremendous investments in life sciences and the researchers and support staff that come to our community to do this work will need places to live and because they need places to live, they will pay real estate tax (either directly or indirectly).

Public Safety & Justice

• Does the deficit include staffing the new jail?
  Yes. The projections include $1M for staffing the new jail. We are in conversation with Sheriff Clayton about that staffing level. We are also considering whether or not we can afford to open the new section of the jail. As painful as that is to even consider.
• IS sheriff off limits?
  Police service has a contract that we have to support through 2010. The Sheriff is working to reduce costs associated with overtime and we are working cooperatively around scenarios for opening and staffing the jail.

Update on Labor C update of union C any way to get access yet.

Overview/Brainstorm of Potential Solutions

Buildings

• Building Footprint C can we consolidate our buildings?
  We are looking at several options around that. Zeeb Road is no longer filled to capacity. The 15th District Court will move out of the downtown Ann Arbor courthouse when their new building is completed in 2010. The buildings on the Platt Road campus are not in very good shape. We will be developing options around these buildings. Closing buildings can reduce operating costs which can result in structural or ongoing savings, which we are looking for. Selling buildings results in one time revenue, which can help as well.
• Is there going to be vacant space and are we going to combine?
  We have too much space, but it isnt in the right place. Zeeb, Courthouse with 15th district court leaving. Relocate off of Platt Rd and sell. Were being aggressive. But the market isnt good right now for selling.
• Get out of Platt Rd C it is an energy hog.
  

  We've wanted to sell Platt Rd. for awhile. But now is not a good time to sell real estate.

Employee Compensation and Benefits

• What about the 4 day work week?
  This is still under consideration by the Employeee Compensation and Benefits Group.

• What is the Willis Group proposal?
  The Willis Group are HR and benefits consultants who made a proposal several years ago to run our benefits programs.

• Can employee buy extra time off at open enrollment time?
  Not at this time.
• What about buyouts?
  Buyouts are not likely at this time. The County is not in a position to offer buyouts.

• Will there be $$ figures associated with these options?
  Yes, thats coming up soon C there is a Labor Management Team and an Employee Compensation & Benefits workgroup that is working on costing these out and trying to come up with a collection of things that will have significant savings. This information will be presented to the board at its April 1 Ways and Means Meeting. We will be making the parts of this public that aren't subject to collective bargaining.

• Can I go down to 80% and not have it impact my retirement?
  This is part of what is subject to collective bargaining, so we can't discuss this now.
• Lots of talk about E C & B. Adjustments. Classifications. Do non-union employees adopt the same benefits?
  This is generally true. Salary schedules are are unique to union and non-union. 
• Is someone going to happen with non-union as well as union?
  We have heard this message loud and clear.
• I was at a County meeting and all employees were non-county residents?
  We will find out how many employees are not county residents. Several local jurisdictions had residency requirements for employees and most of those have been done away with due to constitutional and other issues. How much does each repossession cost the county? (value goes down, impact on neighborhood,

• What if 318 people came and wanted to retire, would that be a good thing?
  Good and bad. It would be 318 people who would be off the payroll. It would be 318 more people collecting retirement out of WCERS and VEBA which aren't in an overfunded position. It would be 318 fewer people who contribute to the VEBA and WCERS. And it would not be strategic as you don't know which departments these theoretical people would come from.
• My whole staff is union C how will the negotiation proceed? Union by union, or across the board for all?
  By law, we have to go union by union, but we also want continuity especially for benefits. Several of the unions are coming together to discuss options, which would be helpful.

Department Specific and Scenarios: 5%,10%,20%

• How are the department level cuts going to be carried out?
  Department heads are identifying 2010\11 Planning Process Base Budget Development.
• How can we be sure that eliminating a non-mandated service will not mean that the community doesnt get the service?
  We can't. In many cases, we are last resort, the safety net, all commissioners are very concerned about the safety net services whether mandated or non-mandated. Our safety net services are even more in demand now.
• CSTS: if reductions are too great, you could lose benefits at the state. Balance hospitalization rates and have a boomerang in expenses.
  We have 36 departments. How do we do it fairly if funding models are different? 5,10,20 is a way to identify that. Also, we need to balance that against the money were spending to receive funding.
• I read mandated/non-mandated and it all looks non mandated. It all looks mandated. And what isnt mandated looks like it is independently funded.
  It is a conundrum And demand is up, too. Our staff and our Board of Commissioners face a difficult challenge.
• Weve added a bunch of positions in our department. Why are we adding positions?
  You have to take funding source into account. Some of the positions are Medicaid funded at a particular level. Some have been created to take advantage of new billable services to consumers.
  Fellow Employee says: Im sure that the positions were created because they were funded based on need and funding. Get right credentialed people to pull down more money from medicare and take the burden off of other staff.
• Can we use a Zoomerang survey to rank these things for employee compensation?
  The County cant do it. Gathering input from membership is what the unions are charged with doing. However, we could do it in partnership or support the union in doing it.
• Are the 5%,10%,20% scenarios for 2009 or for 2010?
  2010. But they arent really across the board cuts. We want to be more strategic than that. However, each department using the same tool and presenting scenarios in the same format provides information that can be used in making decisions. Remember, with these scenarios, even if every department came up with 20% in adjustments, that gets $13M General Fund dollars, which is only half of what we need. So the scenarios are just one of many strategies that are in place.
• Can we invest in 2009, then save in 2010?
  Yes. If any structural adjustments made in 2009 will help 2010.
• How much is 5 days without pay? What if we give this up, will we still use our jobs? What about the Cell phones, the cars, the new blackberries are going out? What happens with the old ones. Need to get the word out on whats happening in 08/09. If all 1300 come up with 5 days, is that enough?
  These are great suggestions and many are on the list of things to consider. Others are not, so thanks.
• Weve cut positions; weve cut interns, now there is a neighboring department that is hiring? Is everyone on board with this? Is there a difference between elected vs appointed?
  This is a great question and it can cause confusion. It is important to keep in mind that many of our departments have different sources of funding, so while we're short on general fund dollars, we may be getting more in medicaid or stimulus. We do try to treat elected and appointed the same way, but we also want to treat departments uniquely.
• Will the county be getting money from the stimulus?
  The county community will get money: road, transportation, broadbandbut there wont be much help for the general fund issues. We will see some trickle down from Medicaid to CSTS.  Schools will get some, city of Ann Arbor but we dont see any money coming in that will solve our problems.
• How much would the ATB cuts cover if you got the entire 20%?
  About $13M, which is about half of the projected shortfall. We do not expect to be able to capture 20% across the board, and that isn't the point of the exercise.

 Next Steps & Timeline

• Is there a timeline for working with union folks?
  Please wait till after the first Board Meeting in April. We will need to work with both the board and our union partners to establish a timeline.

• What is the timeframe?
  We need to balance speed, the need to do something soon with the need to do things right. We need to have a balance.
• Will some of these changes happen in 09?
  Yes. There is a projected 1.2M shortfall in 2009.

• So you are saying that even though it is 2010/2011, it looks like things will happen this year?
  RS: It will happen in 2009. But we need your help and ideas.

Comments

• Need to do something structural! This doesnt cover it.
• Concern about those who are most vulnerable in terms of mandated vs non-mandated. What is the human cost? I know that you value these services C sometimes things that you value you need to let go of. Were holding our breath.
• People are sitting on the edge of their seat wondering when it will come? Will we be hit in 2009, 2010, 2011?
  We have many challenges: urgency balanced with engagement and negotiation and departmental processes. The Board wants round 1 of recommendations in June. We want to predict conservatively, but we dont want to cut and then realize that we didnt have to cut as deeply. And we need to reduce work along with reducing employees because we don't want to put employees in unsustainable positions. There is no definite answer, but it is likely that some adjustments may come sooner rather than later.