TRAVERSE CITY — The Grand Traverse County Commission is expected to approve a $51 million revised budget for 2025 at Wednesday morning’s 9 a.m. regular meeting – just 14 days before the state-mandated deadline.
If a balanced budget is not passed, the county will “not able to incur expenses, pay bills, or conduct any other general business involving the expenditure of funds,” according to the Michigan Department of Treasurer.
Delays or half measures aren’t allowed, either. State law does not “allow for a ‘continuation budget’ from the last budget or any other alternative to a full budget.”
If the budget isn’t approved Wednesday, the board will have to meet again in special session either before or after the Christmas holiday.
PROGRESS MADE
County Administrator Nate Alger has presented details of the proposed budget to the board several times this fall, with each iteration coming closer to a final plan.
For example, the latest budget version includes funding for a discharge planning officer for the Sheriff’s Office and treatment court coordinator for the 86th District Court, as requested by the board on Dec. 4. Alger is recommending that the county use opioid lawsuit settlement funds to pay for the treatment court coordinator.
As in recent years, the proposed 2025 budget uses a conservative approach for projected revenues and expenditures instead of depending on “wishful thinking” for extra funding.
The estimated 6.3-percent increase over the 2024 budget is largely due to higher costs for personnel, health insurance and projected capital expenditures.
The biggest slice of the $51-million budget is earmarked for public safety, which is expected to receive $22.5 million. Required transfers between funds is second at $20.8 million and general government is third at $10.4 million. The fourth-largest allocation, $3.4 million, is for judicial costs.
The majority of the county’s general fund comes primarily from taxes (including five millages), which total $35 million. Other sources include charges for services, fees, interests, government grants and contributions from local units, such as townships and villages.
Several other county entities receive funding from outside the general fund via their own millages, fees and government grants. Those include the road commission, many health department programs and the Traverse Area District Library.
Another $300,000 of the 2025 budget is earmarked for retiree health liability payments. The budget also accounts for cost-of-living (COLA) adjustments for employees as required by earlier labor negotiations.
The new budget also calls for 13 vehicles, mostly replacements, for the following departments: eight for the Sheriff’s Office, four for the health department, and one for the facilities department.
To maintain healthy pension funding, the 2025 budget allocates $3.9 million for pension bond debt service and an additional $799,000 for an “actuarily determined” payment to the Michigan Employee Retirement System.
BOND RATING ISSUE
One of the most common ways for a county to borrow money is by issuing bonds.
Recently, some area residents have aired concerns about a proposed $60-million bond issue for a major terminal expansion at Cherry Capital Airport.
If approved, that bond money would be combined with other grants and funding sources to pay for an 80,000-square foot terminal expansion at Cherry Capital Airport. The two-year project is estimated to cost about $112.8 million, with a start date in 2026, according to industry analysts.
Although the county isn’t issuing the bonds itself, it has pledged its “full faith and credit” toward the repayment of those bonds – if and when they are finally issued.
That pledge could raise some financial risks for Grand Traverse County, according to an analysis by local resident Bruce Moore.
For example, if the airport authority’s revenue isn’t sufficient to pay for the bond debt over time, the county could be “on the hook” for the difference in a legal case.
Others argue that the airport authority has plenty of income to meet its debt service needs in the future.
On Dec. 11, the county board went into a closed session to discuss a financial and legal analysis of the TVC bond proposal, which was subject to confidential “attorney-client privilege.” Details of that conversation were not made public and no action was taken.
Meanwhile, the county’s bond rating continues to be strong. Bond-rating agency Standard and Poor’s increased the GTC bond rating this year to AA+, a score that signifies “very low credit risk” and “a strong capacity to repay its debts.”
State law limits county debt to 10 percent of its state equalized value (SEV) for all taxable properties within that county. The total SEV for Grand Traverse County is about $11.7 billion. That means the 10-percent debt ceiling is about $1.2 billion.
In contrast, the current debt on the county’s books is $74.1 million, according to Alger’s board report.
IN OTHER ACTION
On Wednesday, the board is expected to review an update on “Project Alpha,” a plan to build a new 911 dispatch center, tower and storage facility at the county’s LaFranier Road campus.
It will also hold a follow-up discussion about a revised compensation plan for county commissioners and other county officials.
In addition, board members are expected to approve citizen appointments to various county commissions, authorities and boards. They will also review proposed questions for an upcoming countywide survey and hear an update on the construction of the new Senior Center.
A $290,000 request for new tasers from the Sheriff’s Office is also on Wednesday’s agenda.
The money for that purchase, if approved, would come from available 2024 fund balances, according to a memo by Sheriff’s Capt. Brandon Brinks.
Finally, the board is scheduled to recognize the contributions of outgoing board Vice Chair Brad Jewett and retiring Register of Deeds Peggy Haines.