COVID-19 provides financial boost to government
County Executive submits 2021 budgeet proposal to Board of Commissioners
The COVID-19 pandemic has had a surprisingly positive impact on Macomnb County’s finances due to a windfall of federal dollars and lower expenses in certain areas.
A $30 million combined benefit due to COVID-19 prompted County Executive Mark Hackel to propose spending $14.5 million to pay down debt and setting aside nearly $11 million for two specific capital projects and other possible needs, such as at the jail.
The proposals are part of the $274.5 million 2021 general-fund budget proposal recently submitted byHackel to the county Board of Commissioners. The budget is a $2.6 million — 1.2 percent — decrease from the budget adopted for this year.
The board must approve the spending plan by year’s end and will conduct individual department hearings over the next several weeks.
Under the proposal, the county
will increase its fund balance by $4.9 million to a about $68 million, keeping it at about 25 percent of the budget, with the help of COVID-19’s impact.
“It’s remarkable how much money we’re saving in operating costs this year,” county Finance Director Stephen Smigiel told The Macomb Daily. “It’s been a challenging year but financially positive, something we didn’t expect.”
Smigiel said the county was able to pump $18 million of federal CARES Act funds into the budget of the total of $152.5 million it received, under CARES rules.
The county also will see $12 million in savings this year because of decreased expenses. Savings has occurred at the county jail due to a severe drop in the incarcerated population and in lower utilities at county facilities as roughly threequarters of employees has been working from home during the pandemic response, among others.
Commissioner Harold Haugh, a Roseville Democrat, called the situation “great news” at the Oct. 6 meeting for Finance, Audit and Budget Committee, where the budget was formally submitted.
“It wasn’t what we were anticipating in the earlier part of the year with the COVID crisis taking place,” Haugh remarked.
Smigiel told commissioners at the meeting, which was held virtually, the county needs to take advantage of the situation.
“Something like this happens every 100 years or whatever, so we want to take advantage of it nowto pay down debt, put aside money” for capital projects, he said.
The $10.8million for capital spending would be earmarked for two projects in 2022: renovation of the Verkuilen Building on Dunham Road in Clinton Township. The county Health Department will move to the Verkuilen Building after state Health and Human Services workers move from there and the Majestic Center building on Van Dyke Avenue in Warren to a new facility on Gratiot Avenue near Hall Road next year, Smigiel said.
The county would then demolish the Health Department building located on the opposite side of Dunham from the Verkuilin near the jail.
The funds also would go toward improvements at the county Health Department Southeast Service Center on Harper Avenue north of 10 Mile Road in St. Clair Shores.
“These projects have been pushed back, pushed back and pushed back,” Smigiel told commissioners.
Since the projects wouldn’t take place until 2022, Smigiel added: “If something happened and we went into a deep recession or something, we could pull the money back and spend it on whatever we needed it for.”
Commissioner Veronica Klinefelt, chairwoman of the committee, called it “protection for the budget so we can do the repairs and not put our budget in a deficit position, so it’s not a surprise every year.”
The county also would put an $8.9 million allocation into capital projects due to several project, most notably $3.7 million next year for upgrades at the Sheriff’s Office Marine Division boathouse in Harrison Township.
Some of the new funds or those freed up due to the influx could be used for other needs, such as improvements at the jail, Smigiel said. Officials had planned to ask voters this year to approve a millage to build a new jail but that plan has been scrapped for the time being due to the pandemic’s impact on the jail population. Still, the jail, built piecemeal over the past 60 years, could need some significant work in the near future.
“We could use that money for unforeseen events, like repairs at the jail. We don’t know what will happen in the future at the jail,” he said.
The $14.5 million that wouldbe applied to the debt would accelerate the payoff of three bond issues, Smigiel said.
The money would pay off five years of payments of a total of $7.6 million left for bonds issued more than a decade ago for the 800-megahertz radio network, the final two years and $4.2 million for bonds issued for improvements at Martha T. Berry Medical Center and the youth home, and $2.3 million and the final four years of bonds issue for improvements in Public Works and the Clinton Township warehouse.
Smigiel said the early payoffs will save about $450,000 in interest payments as well as get the debt off the books.
The county currently has total debt $336.6 million, with $248.5 million in principal and $88.1 million in interest. Next year’s total payments are currently set at $26.6million, withall that debt paid off in 2035 with an $18.4 million payment. Debt could be added in future years.
The $ 18 million in CARES monies is being applied to personnel costs at the Sheriff’s Office, paying about one-quarter of the $67million expense for salaries, Smigiel said.
“The CARES Act allows governments to assume all public safety and public health employees are substantially dedicated to responding to and mitigating the pandemic emergency,” Smigiel said.
The budget reflects an expected 2 percent increase in property-tax revenue as well as a 2 percent increase in employee salaries.
Even with CARES Act fund, the proposed budget sets aside $2million for unanticipated costs associated with COVID-19.
Also contributing to the balanced budget is the elimination of about 100 positions — some of the state financed posts — without layoffs over the years, with 62 cut this year, saving $6.1 million, Smigiel said. Most of the positions, 96, have been left vacant while six were eliminated and two were transferred from the Register of Deeds general fund to the Concealed Pistol Licensing fund, which is paid with fees, he said.
The biggest drop in employment was at the youth home, although that budget is part of the county’s overall budget including revenue from outside sources, mainly the state and federal governments.
That employment roll went from 122 to 89 employees, mainly because of a years-long trend of fewer inmates, according to the proposed budget.
In the general fund, the number of workers in the Sheriff’s Office dropped by 19, from 551 to 532 due to a cut in 13 at the jail and cut of six in road patrol, the document says.
Fewer employees were needed at the jail where expenses dropped due to a drop in the jail population from an average of around 900 at the start of 2020 to about 300 recently.
Many other departments had cuts from one to several positions.
The county’s proposed general fund employment roll is 1,573, with a total county employment at 3,001, which includes the over 1,400 positions funded by the state or federal governments.
Those employees compensated by the state or federal government include 346 in Community Mental Health, 286 at Martha T. Berry Hospital, 272 in Department of Roads, 218 in Macomb Community Action, 101 in Friend of the Court, 70 in portions of the Health Department, in portions of the Prosecutor’s Office, and 17 in the county Defender’s Office, among others.
The total budget, including those not funded by the county, is $856 million, a 5.1 percent increase. That is due to increased state and federal spending on road construction, health grants and CommunityMentalHealth, according to Smigiel.
Included in the Roads Department $105 million budget is $68.4 million in construction and maintenance projects, highlighted by $25.6 million for the reconstruction of Mound Road from Interstate 696 to Hall Road and over $16 million for the ongoing 23 Mile Road project in Macomb Township.
The proposed budget will now go through approval process by the county board, which will conduct hearings on individual departments over the next several weeks.
Commissioners recently issued a news release calling themselves the “guardians of the budget.”
“As the Guardians of the Budget we are committed to protecting taxpayer dollars and ensuring they are allocated efficiently and where needed,” the release said.
“As the legislative branch, it is the Board’s duty to thoroughly review the proposed budget and adopt a balanced budget which will ensure the needs of County residents and employees are met through services, programming and fiscally responsible actions,” board Chairman Bob Smith, a Clinton Township Democrat, said in the release. “This responsibility is one we, as a collective body, take with seriousness and pride. With the ongoing pandemic we must ensure we are ready to serve the citizens of this County in every possible way.”
The board also encouraged residents to remotely attend meetings of the Finance, Audit and Budget hearings. Hearings for Facilities and Operations, Information Technology as well as the 2021-25 Capital Improvement Plan are scheduled for 3 p.m. Tuesday.
Meetings dates and times are listed on the board web site, macombcomi.civicclerk. aspx, and meetings can be accessed at meet.google.com/ evi-nzsa-rdg or calling by phone to 1-315- 642-7341, PIN: 106 197 342 #.