Layoffs, cuts likely as $1.5M deficit looms in Montcalm County

Posted at 6:34 PM, Aug 22, 2016
and last updated 2016-08-22 18:34:40-04

MONTCALM COUNTY, Mich. — Since at least 2012, spending has exceeded annual revenue by $2 million or more in Montcalm, draining nearly $9 million in savings from the county coffers in just four years to balance the budget.

County leaders say they cannot afford to operate that way any longer, signaling that cuts and layoffs appear to be inevitable.

According to averages compiled by Municipal Financial Consultants Inc., the county spent $1.5 million in 2012, $2.3 million in 2013, $2.5 million in 2014 and $2.3 million in 2015 from the general and delinquent tax fund to make up budget shortfalls.

"There was an overestimation of revenue," said Bob Clingenpeel, the new county controller hired in May to clean up the money mess.

“I’m upset, angry and I think the issue for me is the lack of communication and coordination between the controller’s officer, treasurer’s office and board of commissioners."

Montcalm County

Montcalm County

The county needs to reduce its expenses by an estimated $1.5 million, but Clingenpeel admits that estimate could still be low.

Clingenpeel said commissioners had not been shown an annual audit report in at least four years, even though its required.

"This year was the first that we had the auditors present to the full board in four years," he said. "Once they presented, we started asking questions at that point.”

It's unclear why an issue wasn't made early on about the lack of audit presentations.

Patrick Carr, long-time chairman of the board of commissioners told FOX 17 he accepts part of the blame for what happened. But he said he also thought he was asking all the right questions at the time.

“I really didn’t see any red flags, didn’t see anything of this magnitude up until now," he said. "I certainly want to be part of the solution and figure out why it happened."

Carr said he knew the county was taking from savings to balance the budget, but he had no idea so much was being spent.

“It’s just hard to imagine why we weren’t aware," Carr said. "We thought we were overspending by a couple hundred thousand dollars out of our fund balance, so it's alarming to figure out we were actually spending that much more than what we thought."

Asked about the potential for cuts to departments and services, Clingenpeel said everything from parks to public safety is on the table. In May, the county floated the idea of closing the local animal shelter and shuttering some county parks, options that still remain, Clingenpeel said.

But Clingenpeel also contends the state carries some of the blame for an issue that is not isolated to Montcalm. He said a steady decrease in revenue sharing between the state and local municipalities has wreaked havoc on budgets everywhere.

“If you remove what’s happened in Montcalm County—as far as lack of communication, oversight or irresponsibility—you’re going to start to find shrinking revenues played a key role in this," he said. "To fix this, long term it has to be legislatively.”

Clingenpeel said it will also likely require a "targeted millage" approach, one that asks voters to approve long-term funding for key areas or services, rather than asking for a blanket general fund millage increase.

“I think we'll have to look at if it’s an important enough service, do we offer it to the voters somewhere down the road," he said. "The trust has been broken, they feel we’ve not done a good job of managing the money."

On Monday, county commissioners approved the hiring of the Clark Hill law firm from Detroit to investigate what happened and what needs to happen to make the county financially sound.

"It saddens me to think the county board of commissioners let this budget issue get so out of hand," Teresa Good said during public comment on Monday.

Speaking against potential cuts to public safety was Mike Kotenko, a sheriff's deputy nearly killed in the line of duty in Oct. 2015 when a fugitive shot him with a bow and arrow.

“I don’t want to have to see another officer injured or killed because you choose to cut from the sheriff’s department," he said. "I don’t know how deep these cuts are planned, but they will affect my family and yours."

County officials are facing down a Sept. 12 deadline to submit a deficit reduction plan to the state. Failure to do so could result in the withholding of a portion of funding provided through revenue sharing.

The county must approve a new budget by Sept. 30.