ALPENA — For the last several fiscal years the Alpena County Board of Commissioners has crafted conservative budgets where revenues were budgeted significantly lower than they turned out to be at the end of the fiscal year and expenses higher than what they actually were.

Doing so doesn’t paint an accurate picture that shows the county having a large deficit for much of the year, only to have a surplus, often more than $100,000, at the end of it.

At Wednesday’s commissioner’s workshop, Treasurer Kim Ludlow presented the board options on how to more accurately set the budget, so that it shows a more realistic snapshot of what the county’s financial condition is.

She told the commissioners they can continue to do the budget as they do now, by having each department do a budget and then wrapping them up in the full general fund budget, or rely on a five year average of revenues and expenses for all the departments. In the end the commissioners decided to use a combination of both, which Ludlow said was probably the right move.

“I think the departments have to be involved because nobody knows their offices better than they do and what the expenses and revenues should be fore them,” she said. “Using a five-year average is good for about 50% of the budget, but there are things that it won’t help with, such as grants, payroll and healthcare and union contracts.”

Ludlow said for the last several years deficits as large as over $500,000 have been projected due to revenues and expenses being budgeted conservatively. At the end of those years they have ended with gains.

The county is able to run a deficit budget because it has that amount in fund balance to make up the difference at the end of the year if need be. This year the budget is for more than $9 million, with a touch over $4 million in savings.

This fiscal year, which runs from Jan. 1 through Dec. 31, started with about a $700,000 deficit. Ludlow said a little of that has been erased just past the midway point of the budget and it is still too early to tell if the entire deficit can be made up.

“As conservative as the budget is, that is a large amount,” she said.

Some of the reasons expenses have come in so far under what was budgeted is because of departments not filling positions when they have approval to do so. Ludlow said once hiring is approved, the wage and other costs are budgeted for. If the hire doesn’t happen, it leads to much less money being spent at the end of the year.

It will be only a few weeks before work begins on the 2020 budget begins. Ludlow said the departments will begin putting their budgets together in September and submit them to the board the following month. Then the commissioners will host several workshops to review the five-year averages and put all the pieces of general fund together.

The new budget goes on display in November and adopted at its regular meeting at the end of that month.

Steve Schulwitz can be reached at 989-358-5689 at sschulwitz@thealpenanews.com. Follow him on Twitter @ss_alpenanews.com.