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HARRISON – Five-to-three was the 2020 Budget vote cast by the Clare County Board of Commissioners at its Sept. 18 meeting. The motion was presented by David Hoefling (R-District 6) and seconded by Jeff Haskell (R-District 7). Dissenting votes were cast by vice chairperson Dale Majewski (D-District 1) and Samantha Pitchford (R-District 2).
Administrator Tracy Byard has repeatedly defined the county’s budget as a snapshot of what will be spent by the county “if” all the projected revenues come in, and “if” all the expenses match what is projected. Obviously, those are fluid elements and the board must be a bit fluid in its handling of that ebb and flow.
At this moment in time, the budget of projected revenues and projected expenses were equally balanced at $38,823,906 in/out, a General Fund Budget of $13,206,598. Administrator Byard said that left an $800,000 General Fund balance, with $100,000 in Contingency. That balance, however, most likely will be affected by more mandated expenditures to the county Probate Fund and Child Fund – some $77,000 of which were approved by the commissioners in that same meeting. And so, the water treading has already begun.
The BOC has been wrestling with its budget woes for a long time, in what would seem an ever-lengthening spiral: failing to anticipate shortfalls and growing its deficit spending. With declining revenues and increasing expenses, and a legal requirement to balance its budget annually, the county has found itself having to delve into its General Fund to make up the difference. This has resulted in an ever-diminishing fund balance – diminishing to the point that the state already had notified the county that it needed to increase that balance.
At a previous BOC meeting, Majewski pointed out that the board’s failure to adhere strictly to its own policies had resulted in a roughly $250,000 shortfall in meeting the county’s 2019 expenses, and another $250,000 difference between its projected revenues and expenses in the 2020 budget. Much financial shifting, slicing and dicing – and some hitching hopes to anticipated grant monies – has the current budget balanced. Unfortunately, some of that financial juggling has meant dipping deeper down into the county’s General Fund pocket, leaving a balance even lower than the 2019 balance that spurred a recent warning from the Michigan Department of Treasury. It was reported in the previous week’s Budget Appeals meeting that the state sent Clare County a letter stating the county’s fund balance is dangerously low, and that the state would “come in and take over” if the BOC doesn’t bring that balance up.
In the face of that, the BOC boldly moved to reinstate Middle Michigan Development Corp., contingent on MMDC receiving a grant which would defray the county’s MMDC cost, with MMDC to move any funding overage into the county’s coffers to fund technology costs.
Of course, it doesn’t help that the state has been reducing revenue sharing while seeming to continually increase unfunded mandates, resulting in expenses which must be borne by local entities with no accompanying increase in funds. Coupled with the Headlee Amendment which curtails the county’s ability to raise property taxes, the county has been left with a dependence on new construction and new businesses coming into the county to generate new revenue.
The other side of the coin is expenses, and in Clare County government the lion’s share of those [roughly 80%] is employee related: wages, health insurance, mandated family leave, vacation pay, workman’s compensation costs, etc. Some speak of the county as having too many employees, but the fact is that personnel numbers have been static since 2017. And it’s not that those workers are getting exorbitant wage increases; in fact, Clare County is regularly losing well-trained, capable workers to other counties who are willing/able to pay more. That is excruciatingly obvious in the Clare County Sheriff Department, which has come to be known as a training ground for neighboring departments.
Majewski strongly suggested the BOC stay on top of the revenue/expenses by pursuing a monthly review, a “State of the County.” Chairperson Jack Kleinhardt agreed, as did Byard, that such review could become part of the regular agenda.
Thus, recognizing the necessity of employees to keep the county running, the board unanimously voted to approve Wage Compensation Resolution No. 19-16, establishing Fiscal Year 2020 compensation.
The county’s debt is not all about people, though. It also means paying down the Clare County Building renovation/utilities upgrade debt, along with all the month-to-month equipment, infrastructure and maintenance expenses that come with running the county’s departments and courts.
The BOC also heard from Carl Parks, county assessor, regarding the Little Tobacco Drain. He informed that the anticipated FEMA grant would be forthcoming, which will enable the purchase of parcels and demolition of homes in the flood plain. Majewski inquired about how much of the county’s loan had been spent thus far, and it was learned the cost to-date has been $1 million, and of the original loan some $7,000 to $10,000 remains. The balance was spent on engineering costs.
Parks sought and received BOC approval of Resolution 19-17, pledging full faith and credit to the Little Tobacco Intercounty Drain Note not to exceed $250,000 in addition to amounts previously borrowed and that may be issued as part of a note issued to refinance the prior notes, pursuant to Section 434 of the of Act 40, Public Acts of Michigan, 1956. The cost for this project is being split between Clare County (70%) and Isabella County (30%).
Clare County Treasurer Jenny Beemer-Fritzinger informed that the total loan was for $1.25 million and that the last interest payment was just less than $18,000. In her Treasurer’s Report later in the meeting, Beemer-Fritzinger shared the Annual Report of Balance in Land Sale Proceeds Accounts. This report showed transferrable monies of $178,248; of that $100,000 is held in reserve against potential claims currently unknown, leaving $78,248 available to transfer to the General Fund.
Beemer-Fritzinger also reported on the Clare County Penal Fines which are designated to the county through traffic violation penalties. She reported $216,000 was paid out to libraries this year. Beemer-Fritzinger also noted that the two counties which have not assigned their designated fees to a library are Sheridan, which has $128,842.22 in escrow and Arthur, which has $53,370.77 in escrow. That $133,294.80 total has accrued since 2005/2006 and can be used for no other purpose than to benefit libraries, and by extension the communities the libraries serve. For Sheridan and Arthur townships, in this case, a bird in the hand is worth exactly nothing.