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ALPENA — As budget workshops are slated to begin, the Alpena County Board of Commissioners currently stares at a projected budget shortfall of about $1.7 million.

County administrators, however, believe last-minute revenue and money that goes unspent between now and Dec. 31 can significantly decrease how far in the red the budget goes.

Whatever the final deficit total, it is likely the county will count on using a portion of its $4.7 million it has in savings.

The county’s budget runs from Jan. 1 through Dec. 31.

County Treasurer Kim Ludlow said the county has projected large budget shortfalls in the past, and, even though the current one appears high now, she said there is hope that the deficit can be trimmed to about $500,000.

She said the commissioners have utilized $300,000 of the $5.5 million it received from the federal American Rescue Plan Act to help lower the shortfall. Increased property tax income from higher property values and other revenue increases will also help narrow the gap between revenues and expenses.

County Administrator Mary Catherine Hannah said there are still almost three full months left in the year, and the current budget is still in flux. She said, like in years past, it is very possible the county can significantly shrink its budget shortfall before the end of the year, but, if unexpected expenses arrive, the deficit could be larger than ideal.

“Right now, I honestly don’t think I can really tell you where we are going to come in,” she said. “I think we have a couple of positive factors playing for us on the revenue side, which is tax values have increased, it doesn’t appear we’ll run into a Headlee rollback, and we have additional state revenue sharing. Those aren’t big increases, but they are meaningful. I would say about a half a million dollars in additional revenue.”

Headlee refers to a state law that requires a local unit of government to reduce its property tax rate when annual growth on existing property is greater than the rate of inflation. As a consequence, the local unit’s property tax rate gets “rolled back” so the resulting growth in property tax revenue — community-wide — is no more than the rate of inflation.

The county has pretty much extinguished all of its ARPA funds and can rely little on those dollars to shrink any shortfall. For a couple years, the commissioners injected $800,000 from the federal stimulus funds to lower the shortfall, and used $300,000 this year. Hannah said the commissioners being mindful of spending and lowering the unfunded liability the county has for retirement benefits will also help lower expenses for the 2024 budget.

For years, the county had needed to make payments into the Municipal Employees’ Retirement System that neared $1 million annually.

Hannah said the county’s retirement obligation is about 64% funded, thanks to new union agreements that closed defined benefit programs to new employees.

“That helped to cut our liability payment by about $150,000, which is enough to cover the raises in the contracts,” Hannah said. “I am pleased the payment has come down and we are doing what we need to do.”

Department heads have been working on their individual budgets and county board budget workshops will commence soon. Hannah said there could be cuts on the table, but the county is mandated by the state to provide specific services and staffing, so some services can’t be tweaked too much.

She said cutting things like maintenance would not be wise, because critical infrastructure would suffer and be more costly to repair or replace down the road.