The St. Joseph County Board of Commissioners voted to accept and file a 2019 Fiscal Year audit report after an extensive review by Joe Verlin of Gabridge & Co. Tuesday. 

Verlin cited a smooth audit process, saying he and his colleagues have “rendered a clean opinion,” conferring their highest-level opinion of analysis. “It should always be the county’s goal to have a clean opinion,” Verlin said, “but certainly it does mean something to achieve that.”

Assets exceeded liabilities for 2019 by $28,070,339 at year’s end, or $9.1 million excluding fixed assets like buildings. Finance Director Angie Steinman noted this position included $6 million set aside for tax settlements, saying she “didn’t want anybody to think that our new ‘available to spend’ was $9 million.” Verlin clarified the standards he must comply with prevented him from separating those numbers. The county’s net position decreased by $162,618 due to expenses exceeding revenues, but Verlin noted being so close to breaking even was a “significant improvement” over 2018 reports. 

Governmental funds, which includes the general fund but excludes long-term liabilities like the pension fund, had balances totaling $7.47 million, a $2.76 million decrease from 2018. Verlin noted this was mostly intentional due to various capital projects funded by leftover 2018 bond proceeds. “The funds were there for that purpose,” Verlin said, noting later that without these projects, the fund balance would have actually risen.

The unassigned fund balance, which excludes designated funds, was $3,835,940. “That’s really the best representation of the total funds available as of December 31, 2019 to cover the costs of running the county,” Verlin said, noting the county is 22 percent funded, with an increase from 2018. 

“That is certainly nice progress,” Verlin said. “Not too much, not too little, that’s a very stable financial position.”

Verlin emphasized that the county ‘s pension funds benefited from strong investment performance, which dropped deferred losses from $4.2 million to about $800,000. Pension liabilities also decreased from $7,030,692 to $5,112,847 over the course of the year. The net effect has been to increase the funding percentage from 84 percent to 89.4 percent. 

However, Verlin also noted while pension investments are projected to cover liabilities at current rates, this was subject to change, and the Michigan Employees Retirement System board was considering a rate decrease. If rates of return were to drop to 7 percent, the county would have to come up with $5 million over the next 20 years to compensate. Verlin noted this number could end up being higher or lower.

Revenue increased from about $3 million to $4.1 million from a park millage and an increase in the Central Dispatch millage rate, which raised property tax revenues from $12.2 to $12.8 million. Operating grants and contributions increased from about $7.6 million to about $9.2 million, mainly from personal property tax reimbursements by the Local Community Stabilization Authority. These helped offset net revenue decreases. The 2018 decrease was $3.2 million, compared to a $160,000 decrease in 2019. “We don’t necessarily like to see (any) decrease in that position,” Verlin said, “but there certainly was a drastic improvement.” 

Verlin noted the county’s internal financial controls were strong, suitably designed, and very effective, and the overall clean report would support continuation of the county’s AA rating. Commissioner Kathy Pangle thanked Verlin and noted the financial improvements. “It looks better than when I came on,” Pangle said. Commissioner Allen Balog thanked Steinman and others for helping with the audit. 

Commissioner Daniel Czajkowski said, “We just need to keep a sharp eye on things, especially with what we’re going through right now. Everyone knows there’s a lot of questions out there, and I think we need to stay conservative.” 

In later comments on fiscal impacts of COVID-19, Czajkowski said, “we’re not going to fall off a cliff in 2020, but the bigger challenge will be in 2021.” 

GOFF PROVIDES COVID UPDATE

Emergency Services Director Erin Goff reported that Tuesday saw 10 new reported cases of COVID-19 in St. Joseph County, bringing total cases to 186, including three deaths. Goff said some new executive orders from Gov. Gretchen Whitmer pertain locally. Order 2020-118 provides for a temporary prohibition on evictions. Order 2020-120 authorizes return of overnight camps to operation, though Goff noted most camps are still planning their reopening policies and procedures. Order 2020-123 extends and enhances safety protections for long-term care facilities, which are heavily impacted by the virus. 

Commissioner Dennis Allen inquired whether recent flood damage was significant enough to establish eligibility for outside aid. Goff reported that none of the flooding or damage hit the necessary threshold.

DISPATCH EQUIPMENT GRANT AUTHORIZED

The commissioners approved a budget amendment authorizing the grant-funded purchase of new dispatch call center communications equipment. The St. Joseph County Sheriff’s Department was recently awarded a grant in the amount of $51,494 toward the equipment. Allen noted that the county’s required match of $2,710.25 was already available in existing budget appropriations.

COUNTY BUILDINGS OPEN

County Administrator Teresa Doehring reported that as of Tuesday, county buildings are open, calling the situation “so far, so good.” Doehring noted capacity is still limited, that some offices are open by appointment, and business is still being conducted remotely where possible. Staff and visitor temperatures are taken upon entry to the Courthouse and Courts buildings, and other social distancing measures are in place.

COURTHOUSE WORK CONTINUES

Building and Grounds Director Tim Hochstetler provided an update on recent work by ABM Industries. “They have been doing a lot behind the scenes,” Hochstetler said, noting that despite COVID-19 delays, much had been accomplished on the courthouse. Hochstetler hopes to have work done by the end of July. “We are just waiting on light fixtures, but it’s pretty much complete,” Hochstetler said. Regarding new exterior lighting, he encouraged the commissioners to “come by at night. It really looks good.”

VETERANS TO RECEIVE NEW SERVICES IN STURGIS

Commissioner Kathy Pangle reported on new developments in veterans support. Two veterans are receiving service dogs. Grants recently awarded through St. John’s Church in Sturgis would provide for new housing, as well as an office for a therapist from the veterans’ center in South Bend. She noted Three Rivers already has an office, and that “it’s beautiful.” Pangle said beehives were recently purchased to produce honey for a veterans’ services fundraiser.

COMMISSIONERS RECOGNIZE STAFF

In closing remarks Tuesday, commissioners and department leaders recognized county staff for keeping operations running smoothly during the pandemic. Commissioner Ken Malone noted it was good to have “qualified people in all the right positions.” Cjakowski agreed, saying “during challenges, good work really shows through.” Pangle echoed the others, saying “we have everyone in the right positions doing the right thing.”

Dave Vago is a writer and columnist for Watershed Voice. A Philadelphia native with roots in Three Rivers, Vago is a planning consultant to history and community development organizations and is the former Executive Director of the Three Rivers DDA/Main Street program.