Following an Executive Committee meeting Wednesday morning, the St. Joseph County Board of Commissioners held a workshop to start planning the 2021 fiscal year budget. For the last several years, the county has operated under a balanced budget, but only by making up shortfalls through drawdowns from the Delinquent Tax Fund (DTF). This year, possible revenue impacts from the ongoing pandemic and a slowed economy brought the imbalance to the front of many of the commission’s conversations about money.
Although pandemic revenue impacts are currently not as severe as first anticipated and have been offset by Federal and state pandemic relief grants, It has had an impact, which Finance Director Angie Steinman said she expects to have tabulated by the next budget workshop. Commissioners nonetheless discussed ways to reduce spending to a point that it would be no longer necessary to draw from the DTF for a balanced budget. The DTF accrues a balance each year from property tax fines and foreclosure sales.
A measure approved by the County Commission this summer would have reduced county employee hours from 40 per week to 35. Steinman said the measure would have helped significantly for the remainder of this year, and County Administrator Teresa Doehring said if it had been adopted for the entirety of 2021, it would have produced a savings of nearly $500,000.
However, at a regular commission meeting last week, Doehring said the American Federation of State, County, and Municipal Employees (AFSCME) bargaining unit representing the county’s largest group of court employees has rejected the arrangement. Doehring did not say what issues led to the rejection.
Instead, commissioners and administrative staff are looking at other measures to fund ongoing operations and pay for needed purchases and projects. Doehring said the county faces a potential shortfall of roughly $990,000. Most departments, she said, already “run very thin,” and are very fiscally responsible. At the very minimum, Doehring said $300,000 cuts are needed for 2021, and $300,000 more following that in order to help spread out the operational impacts of such reductions.
Planning for the 2021 among staff started in July, Doehring said. Several factors are at play and under consideration. Steinman said a 2016 change in how the state calculates personal property taxes has impacted how the counties receive revenues from that source. She recommended planning conservatively for that projected income figure. Doehring suggested leaving the figure out entirely until it becomes clear what the county can expect to receive. An increase on the hard-cap maximums on insurance costs has also come with a price tag.
Steinman said the various departments have requested a approximate total of $769,000 in capital requests for 2021. Some of these requests can be funded from other sources that do not impact the general fund, such as grants or dedicated tax funds. Other capital expenditures and earmarks are subject to revision, such as the Critical Road and Bridge fund, which has historically stood at $200,000 but which commissioners discussed reducing to $50,000 for 2021 on Wednesday.
At issue for the road and bridge fund is a project by the St. Joseph County Road Commission (SJCRC) to rehabilitate the historic Langley Covered Bridge, a regional icon and landmark, in 2023. The project is estimated to cost $1.6 million, and grant funds, an appropriation from the state, and a contribution from SJCRC’s own funds will provide all but $200,000 to the project. SJCRC is seeking local commitments to make up the remainder. County Commission Chair Dennis Allen said a group of township supervisors is willing to contribute toward a significant part of the difference.
Also under consideration is whether to fill some critical capacity positions that have gone unfilled during the ongoing hiring freeze. These include positions in the courts, the Sheriff’s Department, the Prosecutor’s Office, the Treasurer’s Office and the Clerk and Register of Deeds’ Office.
An early retirement incentive program approved for continuation last month will help close the general fund shortfall. In exchange for agreeing to retire during 2021, eligible employees will receive a buyout along with a more generous extension of benefits than they would otherwise get. So far, Doehring said four employees have opted to accept the offer, and she expects more to take it before the acceptance deadline of December 31. “Four retirements is huge in getting us where we need to be,” Doehring said.
However, Doehring said the remaining, necessary cuts are still significant. sContinuing to make up the difference from the DTF would have negative impacts on that fund, Doehring said. In more robust periods, the DTF has been available as a rainy-day fund and a potential source for capital projects. Seeking additional direction, Doehring asked commissioners Wednesday, “where do we go from here?”
Unless commissioners choose to dig into non-essential services, Doehring said the county could be stuck. Commissioners asked Doehring what she might consider to be non-essential. Doehring said some animal control services, the Michigan State University Extension Program, the Sheriff’s Department Road Patrol service, some veterans programs, and others could all see cuts. Doehring said it is often the case that more citizens use non-essential services than essential ones, but “it is our job to let you know what we’re looking at. We need your suggestions.”
All five commissioners, including Allen Balog, Kathy Pangle, Dan Czajkowski, Ken Malone and Commission Chair Dennis Allen variously expressed frustration with the courts for their rejection of budget control measures and gratitude at other departments for operating with reduced staff. Balog said the commission has spent significant money over the last ten years on court security and technology. “If you don’t do 35 hours, there will be permanent layoffs,” Balog said. Other departments, including that of Sheriff and the County Clerk and Register of Deeds, have operated at already-reduced capacity due to an ongoing hiring freeze.
Permitting the department heads some flexibility in determining how to make a budget reduction could provide some flexibility and a way forward, Doehring said. At the conclusion of Wednesday’s workshop, commissioners instructed Doehring and Steinman to explore the prospect of a five percent, across-the-board budget reduction for all departments. “Say, ‘this is what you’ve got,’” Pangle said. “Let the departments tell us where they would take out five percent,” Allen said.
Despite the commissioners’ efforts to steer toward a budget that does not dip into the DTF, Doehring also said a year’s budget often is “never as bad as you think it’s going to be” when a budget is first established, since over the course of the year, departments often seek ways to realize additional cost savings on their own, and revenue sources can become available during the year, even when they are not apparent at the beginning.
The budget conversation will continue at another workshop, which is scheduled to follow the next Executive Committee meeting. That meeting has been rescheduled for 8 a.m. on Tuesday, November 10 to avoid a conflict with Veterans’ Day on the following day.
Expenditures for 2020
In the meantime, during the Executive Committee meeting, commissioners received reports and discussed several proposed expenditures under this year’s budget. Four court positions, including a Friend of the Court, an associated clerk and caseworker, and a judicial secretary for Judge Jeffrey Middleton, are open. Because they are all funded from outside sources, Doehring said they do not require a hiring freeze exception but were brought before commissioners so they would be aware.
At next week’s regular County Commission meeting, commissioners will vote on a proposed expenditure of $53,000 with Tower Pinkster Design Services for the renovation of the Courts Building, which is an annex to the county courthouse. Doehring and Steinman said a USDA Rural Loan program is the best available potential funds source for the renovation, but in order to begin the application process, additional design services are necessary. The expenditure up for consideration next week would fund those additional design services, getting the project to about the halfway point of the design phase.
In Other County Commission Executive Committee Business:
- Grant Administrator James Hissong said the Michigan State Police has awarded the Sheriff’s Office $80,000 to support Jail Divergent Services, which seeks alternatives to incarceration for certain offenders in cooperation with the county’s Community Mental Health agency and other partners.
- Commissioners will vote next week on an Indigent Defense Agreement for 2021, which comes with a two percent increase over this year’s agreement but does not draw from the general fund.
- Also up for a vote next week is an approval of an annual contract for 2021 with Canteen Food Service for county jail meal programs. That program will also see a small increase, partly due to pandemic-related costs, but Undersheriff Jason Bingaman said the program may be partly offset by pandemic relief grant funds.
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.