ALPENA — District Health Department No. 4’s (DHD4) misreporting from Fiscal Year 2023 and FY 2024 continues to cause financial challenges for the department.

The health department has worked the last few months to recover from FY 2024 losses. At Tuesday’s DHD4 meeting, current Financial Director Michelle Konwinski said the total loss from FY 2024 is actually $1.2 million.

In addition to the $1.2 million from FY 2024, Konwinski told The News that another $119,522 is owed to the state from FY 2023 due to the department not providing an allocation basis during a Michigan Department of Health and Human Services (MDHHS) audit.

Konwinski was hired as the department’s new finance director in July.

Konwinski told the board on Tuesday that since making the discovery, she has provided a correction plan detailing how the department will avoid a similar mistake in the future. The state has accepted the correction plan, but has yet to accept Konwinski’s request for an 18-month payback period.

“Just because it would help with the budget,” Konwinski said.

The state has yet to confirm or deny Konwinki’s request.

Though the loss from FY 2024 and the debt owed for FY 2023 has put financial pressure on the health department, they are facing more pressure to fulfill their obligations regarding their pension liabilities.

Konwinski told the board on Tuesday that their Municipal Employees’ Retirement System of Michigan (MERS) contributions will “not go down” in the future. Currently, the department is at 55% funded for their pension liabilities, and they need to be at 60% by 2028.

Konwinski told The News that their monthly payments for MERS amounts to just under $90,000.

Konwinski explained to the board the necessity to make consistent, large payments to MERS because they made a voluntary payment of an additional $200,000 in FY 2024, though it only moved their funded pension liabilities by 1%. All required payments, plus the voluntary payment, totalled $1.3 million for FY 2024.

“We have to move that bar 5%,” Konwinski said. “And to get to 60% by 2028 … I don’t expect that number to go down. It will probably go up.”

Konwinski added that “right now” the department can’t “afford to pay anything extra.”

At August’s meeting, Konwinski told the board the department’s intentions to ask for an additional 10% in appropriations to help cover the MERS payments. Board members were weary of addressing the increase prior to receiving a finalized audit.

“We wanted to address our board about the appropriations … one of the conditions was they wanted to have a good explanation for the financial situation,” Lucille Bray, Alpena County commissioner and DHD4 health board member, explained at Tuesday’s meeting.

Prior to Tuesday’s meeting, Konwinski met with Bray to review the department’s financial concerns in full.

“I’m good with going in and asking for approval of it,” Bray said, adding that she would like more financial information to be provided to the board.

In addition to Bray, Alpena County Commissioner John Kozlowski told The News that he is unsure Alpena County would be in favor of a 10% increase to appropriations as the county has “been working to keep our budget in line.”

“We had to cut things that have impacted programs for our taxpayers,” Kozlowski said. “I would like to hear more about DHD’s plan to correct their problems moving forward before I can support or consider assisting above what we are doing now.”

Montmorency County Commissioner Michelle LaRose told The News that the Montmorency Board of Commissioners had been approached about the 10% appropriations increase at their last meeting in August.

LaRose said the board was not comfortable committing to the increase then, so they have tabled it for future consideration. They have requested the department to disclose measures they are taking to reduce costs.

According to LaRose, Montmorency Board of Commissioners are currently working on their own budget and considering additional price increases in their community.

“We have some unknowns,” LaRose said, regarding Montmorency County’s own budget. “There is some uncertainty.”

Kayla Wikaryasz can be reached at 989-358-5688 or kwikaryasz@TheAlpenaNews.com.