Ann Arbor Area Chamber of Commerce

The Ann Arbor Chronicle (excerpt) regarding the Washtenaw County 2010/11 recommended budget & proposed Food Handler Education Program
By Mary Morgan
November 9, 2009

Washtenaw County Board of Commissioners (Nov. 4, 2009): After removing a major item from their agenda – the 2010/2011 budget – county commissioners spent the bulk of their Nov. 4 meeting listening to presentations, reports, and a public hearing. . . . Commissioners also heard concerns from local restaurant owners and managers – including Ken Weber of Weber’s Restaurant & Hotel, and Rick Strutz of Zingerman’s Deli – during a public hearing on a proposed new food safety training program.

But First, What About the Budget?

The county administration and commissioners have been working on the 2010 and 2011 budget for about a year, addressing how to deal with a projected $30 million deficit over that two-year period. Bob Guenzel, the county administrator, made his budget recommendations at the board’s Sept. 16 meeting, and the board was expected to make its initial vote at the Ways & Means Committee portion of the Nov. 4 meeting, with a final vote at their regular board meeting on Nov. 18.

However, at the beginning of last Wednesday’s meeting, Conan Smith – who chairs the Ways & Means Committee, on which all commissioners serve – announced that the budget agenda item would be pulled. They needed to address a handful of issues that would result in a more “fulsome” budget resolution, he said, to be brought back at the Nov. 18 meeting.

Later in the meeting, commissioner Kristin Judge asked the board to have a discussion about retirement benefits, noting that earlier in the year it had been mentioned as one of the options to explore in addressing the budget deficit. She wanted to know what other commissioners thought.

Guenzel acknowledged that it had been one of many items mentioned early in the budget process, but that it was a very sensitive area and he had decided not to include it in his budget recommendations. There were some legal issues involved, he said, without elaborating. Also, he said he’d made a commitment to a group representing the county’s retirees, who wanted to be involved in whatever discussions were held. Guenzel said he was hoping to regroup with the board after the beginning of the year to have a discussion about retirement benefits, but didn’t feel they had time to do it before the budget needed to be passed.

Ann Arbor Chamber Weighs In

Since the Nov. 4 meeting, the Ann Arbor Area Chamber of Commerce has issued a position statement on the county budget. While praising the administration’s ability to deal with the deficit and commending employees for making concessions, the chamber’s statement cited several areas of concern going forward:

We remain concerned, however, that all County employees continue to receive defined benefit retirement plans. As experience has shown, future liabilities associated with such plans are unsustainable. The time is ripe to explore alternatives, to shift to defined contribution plans akin to those of the private sector.

We are aware that the Board of Commissioners recently chose to levy a 0.04-mill tax to fund economic development and agricultural activities within the County. We insist that no general fund revenues be used to supplement these monies while this tax remains in effect.

As the County moves forward, we urge it to focus on funding its core, mandated functions and, in order to maximize that funding, to continue to seek efficiencies in service delivery. For instance, the County should continue to pursue successful partnerships and shared/regionalized services with the 28 local units of government within its boundaries. There is needless redundancy and duplication; there are economies of scale yet to be realized. The County and City of Ann Arbor data center merger circa March 2009 is a prime example of the success to be had.

We also urge the County to continue to plan in light of uncertain economic times ahead. For example, in this budget cycle outside agency contributions were restored, to a certain extent, contrary to the County Administrator’s recommendations. Should such contributions need to be revisited in future budget cycles, contingency plans should already be in place. . . .

Food Handler Education Program

The commission is considering a new food handler education program for restaurant workers and others in the food services industry. It would require workers to go through a training program to obtain a food safety card every two years.

Several people spoke during Wednesday’s public hearing on the topic – all but one of them questioning the need for such a program.

Kyle Mazurek: Mazurek, vice president of government affairs for the Ann Arbor Area Chamber of Commerce, said the chamber had several concerns about the proposed program. He wondered whether the program was intended primarily to generate revenues for the county. Fees should be used only to cover the costs of administering the program, he said. Mazurek asked whether there was a documented need for the program, and said he’d heard from many in the industry who don’t believe there is. Finally, he said there was some question about who would pay for the fee, and that conventional wisdom held that it would be the employees who’d bear the cost. The chamber would be looking into this further, he said.

Ken Weber: Weber, president of Weber’s Restaurant & Hotel, began by praising the county health department, saying that the staff worked well with local restaurants. He said he believed in the importance of raising the level of sanitation, but wondered whether the new program would achieve that goal. It was his understanding that there’d be no test for people who took the training, for example, so there’d be no way to know if they’d paid attention and learned anything. Weber also said that the program would create a bad situation for his employees, because he’d have to let them go if they didn’t have a food safety card. Finally, he didn’t think it was fair to require that experienced, long-time employees go through the same program as 17-year-old kids. Ultimately, it didn’t seem like the program would achieve the results they were looking for, Weber said.

Kevin Gudejko: Gudejko is director of operations for Main Street Ventures, which owns several restaurants in Ann Arbor, including Gratzi and the Chop House. He noted that current regulations require one manager at each food establishment to be certified in food safety – it’s a struggle to meet that requirement, he said, and many restaurants in the county haven’t done it. The program could also be a barrier to employment for people having to pay the $15 fee to get the food safety card. It would create a competitive disadvantage for Washtenaw County businesses, he said, since potential employees might choose to seek jobs in neighboring counties, where no such regulations exist. Finally, Gudejko said he was concerned about language barriers – one of their employees is from Jordan and is struggling to complete the certification class.

Patrick McDevitt: McDevitt is general manager of Mancino’s Pizza & Grinders in Saline. He also mentioned the county’s requirement that at least one manager be certified in food safety. Through that process, he noted, managers are taught about foodborne illnesses and other safety issues, so that they in turn can teach their employees. Why require that managers get certified, he said, then essentially say that their training isn’t good enough to teach employees?

Rick Strutz: A managing partner at Zingerman’s Deli, Strutz said he didn’t know of many things more important than food safety. He thanked the public health staff for their work on the H1N1 vaccines – that virus affects the food business in a big way, he noted – and said it was a department that genuinely wanted to make things better. While agreeing with the goal of better food safety, Strutz said this wasn’t the proper path. Zingerman’s already requires that employees take a class on food safety and pass a test – they’re taken off the schedule until they can pass it, he said. Yet with 500 employees, it’s difficult to keep track of who’s taken the test, to schedule times for the class, and to find people to translate the tests, which are frequently updated. About 10,000 people countywide would be required to get the food safety card, and Strutz wondered how the county would be able to regulate that program effectively. He noted that Zingerman’s had spent about $30,000 to send its managers to be certified in f
ood safety, as required by the county. But that certification program – a much smaller one than what’s being proposed – isn’t being regulated, he said. Strutz also suggested that if the county were merely interested in generating revenue, they should consider simply increasing the restaurant licensing fee instead.

Andy Deloney: Deloney is vice president of public affairs for the Michigan Restaurant Association. He came at the urging of several association members in the county, and asked commissioners to consider their concerns. The restaurant industry is one of the largest employers of young people, and he was concerned that this program simply added to the cost of operations while providing little public health benefit. Deloney told commissioners that they were in good hands – of the 54 county health departments in the state, Washtenaw County’s is highly regarded, he said. . . .

Commissioners’ response

Kristin Judge, the Pittsfield Township commissioner who is championing this program, thanked the food proprietors for coming to the public hearing, but said that she had a different perspective because of her own personal experience. She got training through a similar program when she was a waitress in Arizona years ago, and learned valuable information that helped her at work. This wasn’t about generating revenue, she said. A lot of restaurants in Washtenaw County weren’t doing as good of a job as those represented at the public hearing, she said, and there was still a lot of education needed in the local food industry. As for the $15 fee, it was the equivalent of a tip on a $100 tab, she said, and wouldn’t be a burden. She told the restaurant managers that because it was new, they might not yet understand the value of the program.

Commission Jeff Irwin said he knew that several people who wanted to speak about their concerns at the hearing had to leave before it was held, because of the late hour. [The public hearing occurred toward the end of the board meeting, around 8:30 p.m.] There’s a high failure rate in the restaurant business, he said, and adding one more regulation was something the board should think about carefully. He asked whether this requirement would demonstrably improve food safety in Washtenaw County – was it the right tool? He wasn’t convinced that it was. A better approach would be to work on strict yet consistent enforcement of the county’s current regulations, Irwin said. He hoped the board didn’t want to move forward at breakneck speed – it would affect a lot of people, and many don’t even know it’s being considered.

Commissioner Mark Ouimet said that he consulted with his daughter, who manages several high-end restaurants. She told him that government ordinances don’t affect how they do business or how they set their standards, which are high. He said he wouldn’t be supporting this program.

Rolland Sizemore Jr., the board’s chair, said he’d talked with waitstaff in several small restaurants – they’d told him the proposed program was a good idea, but he wasn’t so sure. He wanted to see more dialogue between the health department and restaurants of all sizes. Sizemore also wasn’t comfortable with the fee, saying that the economy was bad, especially for people who were just entering the workforce. He said there was no need for the board to be in a hurry about this.

Responding to her colleagues’ comments, Judge said that it’s a public health issue. Until all restaurants in the county get perfect inspection scores, they need to do more. She said she’d try to get data about the effectiveness of programs like this, and report back to the board. . . .

Position Statement: Washtenaw County 2010/11 Recommended Budget
Friday, November 6, 2009

The Ann Arbor Area Chamber of Commerce has conducted a review of the Washtenaw County 2010/11 recommended budget.  We commend County officials and staff for successfully addressing a seemingly insurmountable $30 million budget deficit largely through organizational restructuring and budget reductions, as opposed to seeking tax increases.  

We also commend County officials and staff for wisely redressing the present budget deficit incrementally, in 2 phases, and for exercising sound financial planning by continuing to budget in 2-year cycles.

We recognize that difficult employee concessions, both union and nonunion alike, were sorely needed to balance this budget.  We commend these public servants for their shared sacrifice, be it through relinquishment of a previously promised salary increase or acceptance of a salary decrease.

We remain concerned, however, that all County employees continue to receive defined benefit retirement plans.  As experience has shown, future liabilities associated with such plans are unsustainable.  The time is ripe to explore alternatives, to shift to defined contribution plans akin to those of the private sector.

We are aware that the Board of Commissioners recently chose to levy a 0.04-mill tax to fund economic development and agricultural activities within the County.  We insist that no general fund revenues be used to supplement these monies while this tax remains in effect.

As the County moves forward, we urge it to focus on funding its core, mandated functions and, in order to maximize that funding, to continue to seek efficiencies in service delivery.  For instance, the County should continue to pursue successful partnerships and shared/regionalized services with the 28 local units of government within its boundaries.  There is needless redundancy and duplication; there are economies of scale yet to be realized.  The County and City of Ann Arbor data center merger circa March 2009 is a prime example of the success to be had.

We also urge the County to continue to plan in light of uncertain economic times ahead.  For example, in this budget cycle outside agency contributions were restored, to a certain extent, contrary to the County Administrator’s recommendations.  Should such contributions need to be revisited in future budget cycles, contingency plans should already be in place.

At the outset of this budgeting process, County officials and staff engaged the business community.  We encourage them to do so in the future, and with greater frequency should the need arise.  As structural reforms aimed at greater government efficiency are sought, be they here in Washtenaw County or in Lansing, we are here to lend our voice in support.

Note: Our review and analysis would not be possible without the assistance of Washtenaw County Administration.  In particular, we kindly thank County Administrator Bob Guenzel for his time and assistance.

For additional information, please contact Kyle Mazurek, v.p. of government affairs, at 734.214.0101.

Ann Arbor Chamber Announces Results of Survey and Roundtable Discussions on Proposed City Income Tax
Friday, August 14

The Ann Arbor Area Chamber of Commerce recently conducted a member-wide survey and 2 roundtable discussions on the proposed Ann Arbor city income tax. The measure, if enacted, would tax residents and businesses at a rate of 1 percent, and non-residents at a rate of 0.5 percent.

Of the approximately 300 members surveyed, 57 percent indicated that a city income tax would affect their decision to work at a place of employment in Ann Arbor; 62 percent indicated that such a tax would impact their decision to operate or expand their business in Ann Arbor.

Queried whether they would support creation of a city income tax, 74 percent of respondents indicated that they would not.

Survey results mirror comments received by Chamber staff at 2 roundtable discussions, at which attendees expressed apprehension, questioning the timing, wisdom and underlying assumptions of the proposed tax.

“We felt it was critical for the business community to weigh in on such an important tax issue. We hope that City Council, despite delaying consideration of this matter, sees how critical this issue is to Chamber members and the vitality of Ann Arbor’s business community,” said John Petz, chair of the Chamber’s public policy committee.

For additional information, please contact Kyle Mazurek, v.p. of government affairs, at 734.214.0101.

The Ann Arbor Area Chamber of Commerce is a 1,200-member community non-profit organization that actively facilitates, educates, and advocates on behalf of its members through our services and programs. Chamber member offerings include numerous networking opportunities and events, educational seminars, leadership development, member-to-member discounts and access to health insurance.

Proposed City Income Tax Survey
Friday, August 7

Business Advocacy on the City of Ann Arbor's Proposed City Income Tax

The Ann Arbor Area Chamber of Commerce is gathering information from Chamber members regarding a proposed Ann Arbor City Income Tax. To further facilitate this effort we are conducting a membership-wide survey. The purpose of the survey is to measure businesses opinions on this issue. Please take a few minutes to answer the following 9 question survey.

take the survey

Further information is available on the proposed City Income Tax. The City contracted Plante & Moran to study the feasibility of a City Income Tax (click here to review the study). The City of Ann Arbor also has a FAQ sheet available for review.

Position Statement to Ann Arbor City Council in Opposition to R4C and R2A Zoning District Development Moratorium
Wednesday, August 5

The Ann Arbor Area Chamber of Commerce and its 1,200 member organizations oppose the proposed R4C and R2A zoning district development moratorium scheduled for your consideration on the evening of Thursday, August 6.

In a down economy, when Ann Arbor can ill afford to stymie economic activity, this measure does precisely that by halting development and construction and associated job creation. It may also adversely impact the property values of affected properties by creating uncertainty and limiting development rights. Further property value declines may result in less property tax revenue to the City.

This drastic, atypical measure has significant implications for individuals and families seeking adequate and affordable downtown area housing. This, in turn, has ramifications for downtown area businesses which now more than ever require greater downtown area density to remain viable.

What is perhaps most alarming about the proposed moratorium is that it is politically motivated. It is clearly in direct response to several specific pending developments already months if not years in the works. It represents an attempt to circumvent standard site planning and development review processes.

If passed, this moratorium raises serious due process concerns as it relates to already pending developments. Site planning and development rules are made to be followed. These rules are delineated, in part, for fairness sake. To change these rules after the fact is fundamentally unfair, both in a pragmatic and perhaps legal sense. To do so also sends the wrong message to others seeking to do business in Ann Arbor.

For these reasons, we oppose the proposed moratorium.

Ann Arbor Area Chamber of Commerce
Position Statement: Ann Arbor Public Schools FY09/10 Proposed Budget
Wednesday, June 3 

The Ann Arbor Area Chamber of Commerce has conducted a review of the Ann Arbor Public Schools (AAPS) FY09/10 proposed budget. We commend the district’s efforts in preparing a budget that enables it to continue to provide quality education that our community expects.

We believe that AAPS is a critical community asset, contributing substantially to the Ann Arbor area’s high quality of life. This, in turn, draws talent to the area, which is of obvious and significant benefit to the business community.

In light of current and foreseeable future financial constraints, we urge the district to continue to focus on its core mission of education, scrutinizing all other activities and functions, particularly those occurring outside of the classroom. We also urge the district to exercise caution with regard to certain budget assumptions. Of particular concern are enrollment projection and union contract negotiation forecasts. In terms of future union contract negotiations, we urge the district to ensure that union health care and retirement benefit costs are consistent with those of the private sector.

Several policy opportunities necessary to continued provision of quality education are as follows:

• We urge AAPS to continue to focus on its core mission of education by further exploring opportunities to outsource non-core functions, such as custodial and transportation, and by continuing to work collaboratively with other area school districts, the Washtenaw Intermediate School District and area colleges and universities. AAPS is to be commended for recent collaborative purchasing within the areas of technology, bus and bus parts.

• In order to reduce transportation costs and potentially increase communitywide levels of service, we urge AAPS to continue to work cooperatively with the Ann Arbor Transit Authority and University of Michigan transportation systems, exploring collaborative opportunities as they pertain to such things as shared maintenance and bussing routes.

• We recognize that many AAPS expenses are mandated or fixed by state law and that AAPS is thus unable to effect certain desired internal reforms absent state-level legislative change. Of particular note in this regard are reforms to and cost improvements on employee/retiree benefits. We continue to urge AAPS to actively engage the Ann Arbor area business community to aid in effecting such change, thus removing statutory impediments to reform and cost reduction.

Note: Our review and analysis would not be possible without the assistance of AAPS staff. In particular, we kindly thank Todd Roberts, Superintendent and Robert Allen, Deputy Superintendent for Operations, for their time and assistance.

The mission of the Ann Arbor Area Chamber of Commerce is to support our members by promoting commerce in the greater Ann Arbor area through business advocacy and leadership in economic, political and educational development.

Ann Arbor Area Chamber of Commerce
Position Statement: City of Ann Arbor FY10 Proposed Budget
Monday, May 4

Given the challenging economic times and their apparent impact on municipal budgets principally due to declining property tax revenues, City staff and elected officials are in the unenviable position of having to make difficult decisions regarding numerous competing interests.  But challenge breeds opportunity – opportunity to meaningfully reform municipal government to better ensure its affordability and sustainability moving forward, with the goal, in part, of creating a much more hospitable business climate, resulting in an expanded tax base.

While the Chamber generally supports the City’s proposed budget, we are disappointed that several of our historical concerns remain largely unaddressed.  For instance, employee benefits continues to be a problem warranting dramatic change, both in terms of employee/retiree defined benefit pension plans and health care costs.  They are unsustainable, long-term taxpayer liabilities that channel scarce resources away from other intended uses.  They should be brought in line with private sector practices.  The time is ripe to shift to less costly and more predictable defined contribution plans, and to shift a greater share of health care costs to employees/retirees by, for example, increasing copayments and premium contributions.

In reviewing the FY10 proposed budget, a number of additional concerns have arisen as well.  They are as follows:

•   The Chamber, representing many commercial property owners and managers, believes that commercial property values have fallen further than the City has forecasted.  Even conservative estimates have placed the decline at between 10 to 20 percent.  Therefore, the Chamber is concerned that the City’s commercial property tax revenue projections are overly optimistic and in need of refinement.  This belief also suggests that the number of commercial property tax appeals to the Michigan Tax Tribunal will be greater than anticipated, such that commercial property tax revenue shortfalls directly attributable to this fiscal year will continue to be felt in the years to come as the tax appeals process plays out.  This potentiality will only be exacerbated by the Tax Tribunal’s multi-year tax appeals backlog.  There is thus a need to exercise caution now.

•   The Chamber objects to the proposal to eliminate downtown area foot and bicycle police patrols.  We believe that their presence is indispensable to crime deterrence, and necessary to afford citizens and visitors a feeling of comfort while patronizing downtown area establishments.  Such patrols provide an essential service to downtown area businesses, of substantially greater value than vehicular police patrols alone.  The City has consistently stated the critical role of a vibrant downtown.  We believe this proposal is inconsistent with that objective.

•   With specific reference to City budget assumptions regarding continued $2 million per year accelerated parking lease payments from the Ann Arbor Downtown Development Authority to the City, the Chamber is concerned about the DDA’s autonomy and independence.  The Chamber questions the propriety of continually seeking monies from the DDA to cover various City operating expenses, and believes the independence of the DDA must be maintained to achieve its stated mission.

•   The Chamber is cognizant of the fact that the proposed budget envisions numerous fee increases as well as the outright establishment of new fees.  Of particular concern in this regard is the proposed water utility 4 percent Safety Services fee.  The Chamber would like to reemphasize its longstanding position that fees should be based on demonstrated need as defined by actual cost of providing service.  They should not be utilized for revenue generation purposes, or to alleviate General Fund pressures through fund transfers.  In those instances when demand for service declines yielding a corresponding decline in service fee revenue, structural reform of the service providing unit is the preferred method of redressing the inadequacy in service fee generated operating funds (i.e., relative to a fee increase).

•   While laudable in its objective, the Chamber is concerned that costs associated with the police early retirement program will place the City General Fund reserve target range of 12 to 15 percent at risk, and that this may adversely impact the City’s bond rating.

•   With regard to the proposed reduction in Community Standards officers theoretically resulting in diminished ticketing capacity and a corresponding decline in ticketing revenue, the Chamber questions whether greater weight in the budgeting process should be given to such officers’ personnel costs relative to revenue generation.  Additionally, the Chamber believes that such officers serve other important purposes as well: Through visibility they deter crime; through enforcement they ensure parking meter turn-over which increases visitor volumes; and their presence enables the City’s sworn police officers to concentrate on other areas of law enforcement.

By definition a budget is composed of revenue and expenditures.  The Chamber believes that the City is well positioned to realize significant revenue generation through policies promoting the sale of City owned land, as well as greater private development. 

In this regard, the Chamber believes that the City should aggressively encourage private development to grow its tax base, particularly in the radial downtown area and not just within the DDA District.  Such encouragement could come in the form of pragmatic, apolitical changes to existing planning documents and zoning ordinances, or through professionally overseen, expedient sales of City owned properties ripe for development (such as the former YMCA site) to private developers.  Such sales should occur on an ongoing basis at then-fair market value and not be time contingent on perceived high/low market value points.

The Chamber would also like to commend City staff and elected officials on a number of recent successes:

•   Acknowledged should be the Leslie Science and Nature Center nearing, with the ultimate goal of achieving, financial independence.  Now the Chamber urges the City to use this success as a blueprint for other such similar successes. 

•   Acknowledged should be further reductions in City staffing levels. Now the Chamber urges the City to find ways to reduce increasing personnel costs. 

•   Acknowledged should be intergovernmental collaborative undertakings, such as the Washtenaw County and City of Ann Arbor data center consolidation at Ann Arbor City Hall, an effective means of maximizing taxpayer dollars and managing both jurisdictions’ escalating technology costs.  Now the Chamber urges the City to continue to find new and innovative ways to reduce costs through collaborative efforts with other municipalities, but relative to years past with a greater sense of urgency ultimately yielding tangible results.

•   Acknowledged should be the improved quality and transparency of proposed budget data and information.  Now the Chamber, with recognition of City charter limitations, urges City staff and elected officials to explore opportunities for earlier public presentation of the proposed budget thus affording greater public scrutiny and dialogue with regard to it.

Historical Note: On an annual basis since 1998, the Chamber has been reviewing and commenting on City proposed budgets.  Our review and analysis would not be possible without the assistance of City staff. In particular, we kindly thank Roger Fraser, City Administrator, and Tom Crawford, City Chief Financial Officer, for their time and assistance.

The mission of the Ann Arbor Area Chamber of Commerce is to support our members by promoting commerce in the greater Ann Arbor area through business advocacy and leadership in economic, political and educational development.

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