ALPENA — Alpena County commissioners on Friday voted on sweeping changes to the county’s pension programs and health care coverage for employees.

The county is staring at a nearly $1 million deficit on its nearly $10 million budget heading into the new year. Making up that deficit will come at the expense of non-union employees, department heads, and elected officials across the board.

The mood of some of those employees and commissioners at Friday’s meeting appeared somber.

The Board of Commissioners voted to opt out of Public Act 152, so the county can establish health care contribution amounts from the workers. It then passed a motion to make available a health plan from Priority Health in which the county will deposit $1,000 into each employee’s account after the first of the year, and promised to match any employee contribution up to $800 for the balance of the year.

The county will continue to offer dental and vision coverage, but employees will be responsible to pay 100% of the cost for themselves and families.

Former commissioner Mark Hall, who is now the county’s emergency services coordinator and 911 director, said he knows firsthand how difficult those types of decisions are, but urged the board to explain the often confusing terminology and potential fallout from the changes in simple terms.

“There are a lot of items on this agenda that are very personal,” Hall said. “I don’t think anything gets more personal than health care, retirement, and possibly pay. As you make these decisions, I would hope that you disclose how it will affect the employees so they can go back and explain to their significant others what has changed in their household budgets.”

Some of the biggest changes approved Friday are to the employee retirement funds.

The county intends to freeze pensions and lump all hourly, salary, and elected officials into a new, 401(k)-style direct-contribution plan. That means any employee who is currently 100% vested in their retirement plan will be able to keep what has been saved, but must work for years to become 100% vested in the new account.

Commissioner Marty Thomson said a lot of thought was put into the decisions made Friday, and, as the pension obligation increases and the budget shrinks, action needs to be taken now instead of later, when the alternative moves could be more severe.

“We have spent five weeks in budget talks, and the moves we are making we hope will eliminate future costs for the county and these are the only places where we have a chance to try to get this budget as close to balanced as we can,” Thomson said.

Governments across the country have faced ever-higher yearly pension costs as retirees live and pull retirement benefits longer. Alpena County’s pensions are currently 62% funded, according to the latest actuarial report from the Municipal Employees Retirement System of Michigan. That means that, if all current and future retirees were to claim benefits today, the county could only cover about three out of every five of them.

The less-funded a pension plan, the higher the annual payments to catch up.

The county on Friday also OK’d $1,100 for a study of MERS projections, and Alpena County Sheriff’s Office Deputy Mike Lash questioned why the commissioners took action before the results of that study.

“You should set up a committee and be meeting with people,” Lash said. “You are doing it with health care. Why aren’t you doing it here?”

Sheriff Steve Kieliszewski said the moves made by the board have already lowered employee morale.

“The biggest fear for them right now is the unknown, and there was a lot of decisions that were made today that really haven’t been discussed the employees,” Kieliszewski said. “They have no idea what is going on and some are wondering if they are going to have to find a second job.”

Thomson said the commissioners know the importance of the employees and realize the hard work they do and the dedication they have for their jobs.

“Our employees are our most valuable and greatest asset,” he said. “Unfortunately, they are also our biggest cost.”

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