News photo by Kayla Wikaryasz On July 14, Chelsea McConnell, from Straley, Lamp & Kraenzlein in Alpena, is seen presenting the 2025 audit to Alpena County commissioners at the Finance, Ways, and Means committee meeting this month.

ALPENA — In the last two years, Alpena County’s finances have stabilized, according to its latest audit, despite years of large budget deficits and shrinking savings.

At the Alpena County Finance, Ways, and Means committee meeting on July 14, Alpena County commissioners were told that the county finances were headed in a positive direction.

Chelsea McConnell, from Straley, Lamp & Kraenzlein in Alpena, presented the county’s audit to the commissioners on July 14. She reported that the county’s fund balance, which is its savings, and the expenditure percentage threshold was approximately 38% of budgeted expenses at the end of December.

In October, the board adopted a new policy that adjusted the percentage threshold that would require layoffs of county employees. Prior to the policy change, the county’s savings could not dip below 24.97% of budgeted expenses before part-time employees were laid-off. Likewise, the county’s savings could not dip below 19.97% before full-time employees were laid-off.

Those numbers changed to 25% and 20%, respectively.

In October, County Administrator Jesse Osmer reported that the threshold was above 27% of savings to operating costs. He projected the county to end at about 30% of savings by the end of the year.

The general fund’s fund balance ended 2025 with a balance of almost $4.5 million, which was an increase of $208,000 from 2024. About 11% were funds committed to specific purposes and about 89% were funds unassigned. The unassigned funds increased by $229,000 from 2024.

According to McConnell, the Government Finance Officer’s Association (GFOA) recommends a minimum of two months of regular general fund operating revenues or expenditures in the unassigned fund balance. As of Dec. 31, the county had 123 days of expenditures in unassigned fund balance, meeting the minimum GFOA recommendation and increasing the amount 15 days from 2024.

McConnell said that the status of the county’s savings is a positive indication that the county is headed in the right direction for financial stability.

“I think that it shows that you’re budgeting well, you are controlling those costs, and it seems that you’re on a good path, increasing that fund balance,” she said.

Though the general fund is on the upswing, revenue decreased from 2024 to 2025 by about $22.5 million. McConnell explained that the decrease in capital grants was likely the cause because the county finished the airport runway rehabilitation project in 2025.

“That’s really a natural decline,” she explained. “There was the runway project that had been going on … What happened there was you had a ton of grant revenue that was being recorded. You didn’t have any expenses because you’re capitalizing that asset and then that will be depreciated over the estimated useful life.”

Expenses also increased by about $2.2 million. McConnell said that this was mostly caused by an increase in public works, resulting from the runway being placed into service. There was also an additional contractual amount paid out for ambulance services equipment during 2025.

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