MORE RESERVE FUNDS WILL BE USED TO BALANCE BERRIEN COUNTY BUDGET

By DEBRA HAIGHT
BCR Correspondent

ST. JOSEPH – The Berrien County government will be using more of its fund reserves to balance the budget this year, due primarily to rising health insurance costs. Berrien County Commissioners approved the budget amendment reflecting that change at their meeting last week.

Berrien County Finance Director Doug James outlined the changes at the board’s Committee of the Whole meeting before the board action at their regular meeting. James had previously made the same presentation to the board’s finance committee.

Overall, the biggest change to the budget is the use of $2.4 million more than anticipated out of the county’s fund balance. The county now expects total revenue to be $71.899 million and expenditures to be $75.611 million which would use a total of $3.712 million out of reserves. The original budget used a fund balance amount of $1.255 million.

James told commissioners that the main reason for having to use more of the county’s reserves to balance the budget is the unanticipated rise in health care costs. Additionally, the county has had to address changes to the delinquent tax revolving surplus fund, capital improvement project costs and budgeting American Rescue Plan Act funds.

“We need to transfer money to support the health insurance fund,” he said. “We have had rising costs and stagnant revenue. We started infusing cash into this fund in 2019 and we’re asking for more money now to get us to slightly above break even.”

He attributed the rising costs to a number of factors, mostly related to the pandemic. He said that the pandemic caused people to defer treatments in 2020 and 2021 to this year which drove up costs. Similarly, people deferred preventative treatment visits until this year, also driving up costs.

James also mentioned the rising medical costs due to inflation. The county has seen medical related insurance costs go up by 22 percent in the last 12 months with drug costs going up 14 percent.  He said that experts expect costs to flatten in the next 12 months.

Steps taken to address the situation include offering Medicare Advantage plans to county retirees. County Administrator Brian Dissette said that Medicare Advantage doesn’t harm retirees as it actually costs less to them while giving more benefits.

County Commissioner Ezra Scott noted that the county is down around 80 employees with vacancies not filled which means less people are paying into the funds which in turn creates the shortfall.

James reported that another issue is that ARPA and other pandemic related funding received by the county are not recognized as revenue coming in until the funds are actually spent. In addition, some of those funds which were designated to cover for lost revenue can’t be used to pay for rising health care costs, he said.

“It’s part of a double whammy,” County Board Chairman McKinley Elliott said. “There’s an inability to use the funds for Covid related expenses along with the deferment of care. We’re now seeing people flooding into system all at once.”

In other discussions, County Commissioner and Administration Committee Chairman Jim Curran gave reports from legal aid, the public defender’s office and the road department.

He said attorneys Mary Spiegel and Pam Hoekwater reported on the work of Legal Aid of Southwest Michigan, an organization that serves residents in 17 southwestern Michigan counties. They reported that a major focus of their organization right now is on helping people with foreclosures and evictions.

Berrien County Public Defender Paul Jancha, Jr. told committee members that his office’s submitted 2023 budget has been approved by the state. The state will be providing a little over $4 million with the local share being just under $580,000.

Jancha said his office is currently full staffed and handling more cases than ever since the pandemic. Public defenders are assigned to indigent clients starting at the arraignment step. The office’s social workers also help clients to get the community assistance and services they need.

Curran also gave updates on a number of projects in the Twin Cities area. The first phase of a mountain bike trail on the Benton Harbor Whirlpool campus is nearing completion, he said. The trail and associated amenities such as a tunnel under M-63 have been fully funded by Whirlpool.

The other project Curran mentioned is the proposed development of the former Berrien Hills golf course. Developers are interested in creating a residential/retail project on the former golf course property in St. Joseph Township.

One part of the project is already being met with skepticism from residents. As currently envisioned, the proposed project would include a roundabout at the intersection of Napier Avenue and Miami Street.

Two area residents spoke out against the idea of a roundabout during public comments. Their concern and that of others is that a roundabout will create traffic problems and also create potential delays in ambulances getting to Spectrum Health Lakeland Hospital in a timely manner.

Also at last week’s meeting, commissioners accepted a donation from Friends of Berrien County Animal Control to find a noise reduction project and approved employment changes at the Berrien County Road Department.

This week’s meeting will be the county board’s last night meeting of the year. It is scheduled for 6 p.m. Thursday, Sept. 1 at the Lincoln Charter Township Library, 2055 W. John Beers Road, Stevensville. The county board’s regular schedule of Thursday morning committee of the whole, committee and regular board meetings resume Sept. 8.

-30-