ALPENA -The Alpena County Board of Commissioners is pinching pennies and making cuts, but it isn't going to be enough to avoid beginning 2014 with a large budget deficit. It appears the county still hasn't reached the point where layoffs need to take place.
During a budget workshop Thursday the commissioners combed through line items, funds and possible cuts in an attempt to reduce the amount it will begin in the red, but when the meeting ended it appeared unless something drastic occurs - the county will begin next year with a $378,943 deficit.
The budget, which runs from Jan.1 to Dec. 31, is $8,804,895, but it could change slightly as there is still about a month and a half remaining in 2013.
Treasurer Kim Ludlow said there is $2,724,583 in unreserved funds, which is about 30.9 percent of the budget. The county has a policy that if the percentage dips to 24.97, automatic cuts take effect, including hour reductions and layoffs.
Although it appears job loss has been avoided temporarily, the estimates for the 2015 budget look even more alarming than next year's. Ludlow said her figures point to a 26 percent to begin, which is dangerously close to the automatic cuts taking place.
Ludlow proposed a new policy that would allow her to take some revenue, and instead of depositing it into reserve funds, deposit it instead to unrestricted funds, which aren't earmarked. If the 2015 year begins at 26 percent, the county would have only about a $130,000 cash cushion to prevent it from dropping to 24.97 percent.
Commissioner Lyle VanWormer said it was only a month ago it appeared the county would finish 2013 with a surplus and there would be a significant amount of money carried over to begin 2014. A large, unexpected expense from the child care fund for children in treatment centers, however, ate most of the available money the county had. VanWormer said it is still unknown what the cost of child care will be in 2014 and because of that planning a new budget is difficult.
"We have no choice but to start with a deficit. There was no way to cut ourselves out of this one," VanWormer said. "This year was one of the years it got us, but we have to move forward and hope we have things in place so we can handle what has happened to us."
Although none of the cuts proposed involved layoffs or cuts to hours, raises and adjusting the payscale were denied. The county also is going to put off hiring a full-time employee in the IT department, which could leave it short handed. VanWormer said he can't rule out drastic measures, like layoffs, in the future.
The commissioners also had to sort through a wish list that each of them submitted, as well as the department heads. With a spending freeze in effect there was very little approved and most of those were approved before the child care fund issues.
The commissioners also denied a salary increase for the housing commission, and themselves, and a request of $16,700 from the Huron Undercover Narcotics Team was not approved. A request from probate court for a new microfiche reading machine as denied, as well as new identification badges for the employees and a "leak" study for the airport.
The commissioner approved spending $7,280 for a fire alarm system for Plaza Pool, because it is mandated by state regulations, and new scanners for the clerk's office and calculators for the treasurer's office.
Ludlow said the county's auditors believe it would be wise to strengthen the unrestricted funds, so the money can be maneuvered and spent as needed and not regulated by earmarks, so the commissioners will have to act on that proposal before voting on the new budget.
"Policy now says at the end of each year, any unrestricted reserve balance over 24.97 percent, should be put into specific reserve accounts," Ludlow said. "The auditor would like to see the unrestricted balance be increased to 40 percent."
The proposed budget will now move to the county's finance committee, where changes could be made, then it will go on display. It will return to the finance committee for approval and then the full board for a public hearing and final approval.
Steve Schulwitz can be reached via email at email@example.com or by phone at 358-5689. Follow Steve on Twitter ss_alpenanews. Read his blog, Upon Further Review ... at www.thealpenanews.com