ALPENA — One other giant funds shortfall looms for Alpena County for the 2023 fiscal 12 months, and, like its present funds, the Alpena County Board of Commissioners might depend on a portion of the $5.5 million it acquired from the American Rescue Plan Act to decrease it.
It is going to be as much as the board of commissioners to decrease bills with the intention to higher align the county’s prices and income.
How the county will handle giant funds deficits when the ARPA funds are gone has but to be decided, but when the deficit development continues, the board could also be pressured to additional dip into its fund steadiness.
County Administrator Mary Catherine Hannah stated the county is wholesome financially, however stated funds are being propped up considerably with cash from the federal authorities and different non-traditional revenues.
She stated steps are already being taken to chop bills, which incorporates higher sustaining amenities and tools. Hannah stated it’s crucial to look forward a number of years to attempt to challenge what revenues and bills could also be, so a plan may be carried out earlier than the ARPA cash and different funding sources the county now receives briefly dries up.
“Lengthy-term forecasting and long-range planning is vital to creating good fiscal choices,” Hannah stated. “If we are able to forecast out two, three, 4 years, and get a deal with on when these further funds rub out and our piggy financial institution runs dry. That helps us to pay attention to what we are able to do within the meantime to arrange for it.”
In line with Treasurer Kim Ludlow, the final fund funds shortfall for this 12 months is about $1.2 million and is anticipated to balloon to about $1.6 million. She stated $500,000 might be shaved off the shortfall earlier than the tip of the 12 months, if spending is restricted.
The commissioners are additionally contemplating utilizing $800,000 in stimulus funds to drive the shortfall decrease.
Ludlow stated that might possible go away a funds shortfall between $300,000 and $400,000. She stated the ARPA cash solely helps forestall the inevitable — having to make giant cuts when the stimulus cash is exhausted and the funds shortfall is giant.
Ludlow stated if the county begins to make use of $800,000 a 12 months from its financial savings — prefer it presently does with ARPA funds to offset deficits — after the stimulus funds are gone, the financial savings will drop shortly.
She stated if monetary points aren’t addressed quickly, the county might be on the mercy of the state authorities for assist.
“When that emergency cash is gone, our fund steadiness can solely drop so low after which the state will are available and take over for us,” Ludlow stated. “What are the commissioners going to do when the ARPA cash runs out?
The commissioners have thought of looking for a small millage to make up for the income the county loses from the Headlee Rollback, which may imply about $700,000 in extra tax cash for the county.
That’s nonetheless lower than what the county presently makes use of in ARPA funds to maintain the deficit as small as attainable.
Headlee requires a neighborhood unit of presidency to scale back its millage when annual development on present property is larger than the speed of inflation. As a consequence, the native unit’s millage fee will get “rolled again” in order that the ensuing development in property tax income — community-wide — is not more than the speed of inflation.
A Headlee override is a vote by electors to return the millage to the quantity initially licensed through constitution, state statute, or a vote of the folks and is important to counteract the consequences of the “Headlee Rollback.”
Ludlow stated if the voters go the next tax to make up for what’s misplaced from Headlee, the county gained’t be a lot better off if cuts aren’t additionally made.
Hannah stated the county is dealing with the identical points as households and companies nationwide — prices are going up and income is shrinking. She stated if extra income streams aren’t discovered, cuts in providers could also be within the playing cards.
Hannah stated legislation enforcement and lowered hours of operation might be thought of examples of potential cuts — however solely as a final resort.
“We’re statutorily required to offer a jail, however we are able to get round that with contracting, which is how a few of our neighboring counties have completed it,” she stated. “The draw back of it’s downsizing the variety of deputies and highway patrol. That’s not an incredible choice, and we don’t prefer it, however it’s one thing that must be mentioned.”
Hannah stated if a tax hike is on a future poll, in the end voters will resolve the destiny of what the county can and might’t afford.
“If the residents of the group will not be keen to extend the revenues for the county, then now we have to consider how we lower bills and that’s going to be folks and providers,” she stated.
Ludlow stated division heads are sorting via the prices and revenues and can current them to Hannah. In the end although, will probably be as much as the board of commissioners to resolve what, if any cuts are made, and what cash will likely be spent on subsequent 12 months.
The primary funds workshop for the county is slated for Oct. 11.
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