Traverse City Record-Eagle

December 4, 2013

GT County board rejects 2014 budget

BY MICHAEL WALTON
mwalton@record-eagle.com

— TRAVERSE CITY — Grand Traverse County remains without a 2014 budget.

Board members last week voted to change county policy in order to use about $1 million in fund balance to shore up the 2014 budget, but several commissioners reversed course during a committee meeting tonight. They admonished the fund balance proposal with an adage that has come up continually during the board's protracted discussions over the $1.5 million deficit in next year's budget.

"Talk about kicking the can down the road," Commissioner Sonny Wheelock said. "Spending fund balance on the 2014 budget is kicking the can down the road."

Commissioners rejected the fund balance budget fix in a 4-to-3 vote. Commissioner Larry Inman, who supported the measure, warned other board members they now have little time to find a way to balance the county's 2014 books before year's end as required by state law.

"If we don't have (a budget), that potentially could throw in a number of concerns with the state of Michigan regarding our ability with financial matters," Inman said. "The last thing we need to have is an emergency manager assigned to us because we can't balance a budget."

Board members began looking at various deficit remedies months ago. Almost everything considered so far came up again tonight.

County Administrator Dave Benda called a proposed line-by-line review of the budget by commissioners to prioritize services and find inefficiencies a "great exercise." But Benda said following through on cuts is never easy.

"I can find a lot of places to cut and do things differently in the county budget," he said. "The question is do you have the political will to do it."

Benda in October suggested the commission eliminate several positions within the sheriff's department to make up a sizable chunk of the deficit. The idea got little play from board members, some of who instead targeted the parks department for major personnel cuts.

Several residents spoke against cuts to either department during the meeting tonight.

Benda, county Finance Director Dean Bott and some commissioners have pointed to a $46-million pension bonding proposal as the best solution to the county's financial woes.

The county's annual unfunded pension payments are projected to rise from almost $4 million to more than $6 million by 2024, then begin a quick decline. Bonding would set those payments at about $3.5 million a year for 20 years, and would reduce the 2014 payment to about $2.4 million.

Public opinion on the bonding proposal as expressed during the meeting tonight was split. Many commissioners worry the bonding plan is based on unrealistic market returns and interest rate projections, and could end up costing taxpayers more money in the long run.

Others like Wheelock and board Chair Herb Lemcool support pension bonding. Wheelock said last week he respects the expertise of Benda, Bott and other authorities who favor the bonding plan. Wheelock also questioned if commissioners who oppose pension bonds understand the severity of the future budget cuts that will likely be needed if county officials don't stabilize pension payments.

"Those cuts will be very, very deep," Wheelock said during the committee meeting. "And people are going to be unhappy when we start making those cuts."

The county board will discuss the budget again at a committee meeting on Dec. 11.