Officials eye 40-year plan to pay for new jail

Members of the Isabella County Finance and Administration committee looked at a 40-year plan to pay off the new jail that will involves revenue from wind turbines and a restructuring of the county’s $15.5 million retirement liability.

It does not involve asking voters in the county to support it through higher property taxes, instead financing the combined $2.9 million in annual costs through the budgeting process. For Fiscal Year 2021, Isabella County’s general fund budget is $21 million and $34 million overall.

The plan, presented to the committee Tuesday morning by administration accountant Steve Kirinovik, is based on the fact that while the taxable value of the turbines will depreciate, the amount the county will owe in retirement costs will also decrease, while assuming the countywill make roughly the same payments towards both.

By 2026, the $1.5million the county will pay on the jail project each year will be higher than what the countywill bring in through turbine revenue, but by 2028 the amount the county owes in retirement will be lower than the $1.4 million dedicated per year from the general fund to pay it.

Revenue from the turbines is expected to peak in Fiscal Year 2022 at $2 million and start steadily declining there until 2031 where it will bottom out at $720,000.

Isabella County will pay approximately $2million per year from fiscal years 2022-2027 in retirement liabilities, before that amount is cut in more than half to $784,000 in 2028. In 2036, the county’s obligations are expected to take another steep dive to $27,500, with the county planning to continue budgeting another $1.4 million.

The framework is based on transferring sur

plus funds from the county’s delinquent tax revolving fund during two separate periods, $1.3 million from 2025-26, with approximately $1 million in 2026 alone; and another $1 million from 2030-35, starting with $115,000 the first year and rising steadily to $223,000 the last.

County Treasurer Steve Pickens has sued the county board over its use of money in the DTRF, saying that the county board isn’t empowered by state law to declare a surplus and that he hasn’t declared a surplus with the money.

Last September, Pickens told commissioners that the county could face unknown liabilities in the DTRF should an Oakland County property owner win in a lawsuit against Oakland County over proceeds of his property that the county foreclosed on due to unpaid property taxes.

The Michigan Supreme Court ruled in the property owner’s favor in July, and Pickens filed his lawsuit three days later.

Physical work on the jail hasn’t started yet, with the timetable for it pushed back by COVID-19. The project management team has identified a property suitable for the new jail and sheriff’s office and also large enough to accommodate moving the county trial court and administration buildings to a unified campus, but haven’t closed on it yet.

The county is also planning to use $1 million in wind turbine tax revenue to balance the FY 2021 budget, but could replace those with money the county has already spent on planning and preparations, which is expected to get reimbursed when a finance plan is finalized.

Isabella County is currently carrying no debt. It paid its last obligations off last October.