County approves ballot language to release hospital funds

Millage funds frozen after sale of hospital

ALPENA -- On Tuesday at a regular full board meeting of the Alpena County Board of Commissioners, the board approved ballot language for a proposal that could release about $20,452 from a hospital millage that funded the Alpena Regional Medical Center (ARMC) before it was sold to MyMichigan Health in 2016.

The county approved the $125 million sale with a 7-1 vote in 2016 despite public concern of the transition. Of the 125 million, $17 million was allotted to pay off bonds held by the county for the hospital. Another $30-60 million was put towards funding pension obligations, which were only about 70 percent funded, at the time of the sale. The balance, between $48 and $78 million, was planned to be held in escrow for future investment at ARMC.

Since the sale, MyMichigan has made infrastructure improvements to the existing facility and added additions to meet the needs of the community.

County Administrator Jesse Osmer told board members that the funds from the sale have been frozen since the sale of the hospital. The money collected from a millage must be used for the intended purpose. The funds in question were collected within the period in time when ARMC was being sold and transitioned to MyMichigan Health's ownership.

"During sale of the hospital, there was still millage money coming in," Osmer said. "So at the conclusion of the sale, we were still getting payments coming in. It’s illegal to pass those payments on to a private entity so they couldn’t be passed on to the hospital at that point in closing because they’re a private entity, tax dollars can’t go to that directly."

The millage was first passed in 2007 for ten years. At the sale of ARMC in 2016, the hope was that lifting the millage burden off of residents would alleviate the tax burden.

Osmer explained that the money can't be returned and at this point, the board can't use the money for anything else, which includes donating the money back to the hospital.

"We can't return the money," he said. "We can’t use the money for any other reason."

He stated that the only way to release the funds is to put it on a ballot and let registered voters of Alpena County decide if the funds can be released. If voters pass the proposal, the intention is to move the $20,452 to the general fund.

"The only way to actually get this taken care of is to actually put it before the voters were requested for them to allow us to move money from that line item into the general fund," he said.

"We can't even invest it," Osmer added. "It's just sitting dormant in this line item frozen and not being able to be used for anything. So our attorneys worked with us to create ballot language that would free that up."

The proposal will be on the Nov. 3 election.

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