The Washtenaw County Board of Commissioners voted on Wednesday to authorize the county's membership in the newly formed Southeast Michigan Regional Energy Office.

Commissioner Conan Smith, chairman of the county's Ways and Means Committee, excused himself from voting to avoid the appearance of a conflict of interest.

Washtenaw County Commissioner Conan Smith directs Wednesday's Ways and Means Committee meeting at which commissioners voted on a contract with his firm.

Ryan J. Stanton | AnnArbor.com

Smith is the executive director of the Michigan Suburbs Alliance, a Ferndale-based nonprofit agency that works with metropolitan Detroit suburbs on regional cooperation initiatives. Under the contract approved Wednesday, Smith's firm will be paid $76,690 by the county and will head up the new Regional Energy Office.

The office is expected to use state and federal grants dollars to assist member communities like Washtenaw County with technical consultant services, residential and commercial energy audits, and other energy-saving incentives and programs.

The $76,690 from Washtenaw County is part of $766,900 in Energy Efficiency and Conservation Block Grant dollars the county received from the U.S. Department of Energy. That money is being spent between now and September 2012 on a wide range of energy efficiency projects throughout the county, including the creation of the Regional Energy Office - a partnership of SEMCOG, the Michigan Suburbs Alliance and the WARM Training Center.

County administrators looked into whether the contract with Smith's firm would be a conflict of interest and stated Wednesday it would not violate state law. Michigan Public Act 317 of 1968 allows contracts to be approved by a public body provided that the public official involved discloses any direct or indirect personal benefits arising from the contract, abstains from voting on the contract, and the contract is approved by a two-thirds vote of remaining board members.

Commissioners voted 10-0 on the agreement during Wednesday's Ways and Means Committee meeting with Smith abstaining. Upon final approval at the full board meeting that immediately followed, the vote was 9-0, as Commissioner Ken Schwartz, D-2nd District, was not at his seat when the vote was recorded.

Smith, D-10th District, publicly disclosed his position with the Michigan Suburbs Alliance at a meeting on March 3. He said he does not stand to gain personally from the county’s membership in the Regional Energy Office but still wanted to avoid the appearance of any impropriety.

"The Regional Energy Office is a coalition of local governments doing energy work. We are just the fiduciary agency for that work," Smith said of his firm. "So we hold that money. How that money is spent is determined by a separate board of directors. I am not their employee or anything like that. We're basically acting as a bank."

Smith said there are 19 cities in Southeast Michigan ranging from Farmington Hills and Ann Arbor to smaller communities like Ferndale and Ypsilanti that are members in the new office.

The office is up and running already with 3.5 full-time employees assigned to it. It has $3 million in backing from the Suburbs Alliance in the form of a Michigan Public Service Commission grant and about $700,000 worth of energy efficiency grants from the state of Michigan for cities in the energy office.

Smith is the husband of state Rep. Rebekah Warren, D-Ann Arbor, who has been an advocate for clean energy programs.

Sam Offen, an employee of the Suburbs Alliance, has been appointed to serve as executive director of the new energy office. Offen is the former general manager of student publications at the University of Michigan and serves on various committees in Ann Arbor city government, including the Parks Advisory Commission, Library Lot Request for Proposals Review Committee and the Leslie Science & Nature Center Board of Directors.

Smith noted that only about $200,000 in city money is going into the Regional Energy Office, while the Suburbs Alliance is bringing $3 million to the table.

The office's work is being done in three phases.

"The first phase is sort of research and education and that's been completed over the last year and a half," Smith said. "The second phase is working with municipal entities on their own assets, so fixing city halls and DPW yards and whatnot. The third phase will be getting into community-based work and we expect the energy office will delve into that in the next year or so."

Smith helped announce back in November that about $2.5 million in federal grant money was on its way to Washtenaw County to fund new energy efficient initiatives, including a high-visibility solar energy demonstration project. About $1.24 million of the money allocated by the U.S. Department of Energy went to the city of Ann Arbor, while $484,400 went to Ypsilanti Township. Another $766,900 is being spent at the discretion of the Washtenaw County Board of Commissioners.

County officials said early on they panned to put $76,690 toward the creation of a Southeast Michigan Energy Office. County officials stated in November that the office's services would include tracking energy savings, energy audits, Department of Energy reporting and grant compliance assistance, grant writing and other technical assistance.

Another $242,500 of the county's allocation will be used on various retrofitting projects in county facilities. That includes T8 light retrofits and adding occupancy sensors to storerooms, mechanical rooms and restrooms. It also includes installing new LED lights, additional insulation, and solar hot water heating systems, including at the county jail.

County officials predict that $400,000 in energy savings will be realized over 10 years from the improvements. The payback rate per project ranges from 4 to 13 years.

One of the biggest projects is a solar energy demonstration. County officials plan to spend $115,000 on installing a 12-kilowatt solar energy system on a county facility. Another $57,710 is expected to be spent on developing a Washtenaw County energy policy and strategy. Another $275,000 is earmarked to start a revolving loan fund for residential, commercial and institutional building retrofits.

Overall, the initiative is intended to reduce carbon dioxide emissions and realize energy savings at county facilities, as well as some residential and commercial facilities.

Fellow commissioners offered thanks to Smith on Wednesday for his efforts to help with the clean energy initiatives.

Ryan J. Stanton covers government for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.