By Nathaniel Bott
Clinton County Chatter Staff Reporter
Since the last audited year in 2014, Clinton County government has been seeing its highest increase in financial performance trends since 2010. Categories such as cost per resident, net debt per capita, and pensions/retiree health funded in Clinton County are all at their peak standing.
One major factor for freeing up a county’s budget is paying off debt, something that county Deputy Administrator Craig Longnecker and Clinton County have been serious about.
“Net debt per capita, that’s a declining trend, and it will go to zero at the end of this year,” Longnecker said. “We (Clinton County) will have paid off all our primary government debt. We paid off the courthouse last year, and we will pay off the health department this year, so that trend is very accurate.”
In comparison, the Chief Deputy Controller of Ingham County, John Neilsen said Ingham County will have general fund debt of about $3 million dollars paid off for the Ingham County Jail and Veterans Memorial Courthouse by 2022. They still have a 911 facility debt to pay off, and Neilsen said it will probably be about 16-17 years until that is completed.
Arguably the biggest trend that has increased for Clinton County has been the percentage of pensions funded and retiree health funded by the county. In total, pensions have increased from 79 percent to 94 percent from 2010-2014, and retiree health is being funded at a rate over 100 percent, meaning the county already has money set aside to help its funding.
“We just made a concerted effort to get that stuff funded,” Longnecker said. “A lot of the talk about local government currently and their financial problems are based upon legacy costs; pensions and retiree health. A lot of them won’t be well-funded, but by taking a long-term approach and getting this funded over time, it stabilized our operating costs.”
Longnecker says that without proper funding for pensions, it creates a recurring unfunded liability. He compared it to paying off a mortgage, saying that it’s an extra cost counties have to pay in addition to an annual contribution to the state.
With proper funding of pensions and retiree health, money can be freed up to keep up with inflationary costs, give employees a small raise, and help cover increasing health insurance costs.
The Administrative Office, found in the Clinton County Courthouse, handles a large portion of the county’s finances and budget. Much of that work falls on Longnecker.
Longnecker is mainly responsible for county’s finances and backing up the county administrator when he is absent. Longnecker is also tasked with staffing committees and board meetings, as well as meeting with elected officials and department heads to create a budget for them and present to board.
Longnecker also manages the Clinton County Incentive Program, which keeps tabs on the performance trends like cost per resident that the county is seeing. He has been working with Clinton County for 20 years now, starting out as a budget analyst and working his way up to budget director before becoming the county’s deputy administrator.
“It’s mandated by the state of Michigan, so we can receive our revenue sharing from the state,” Longnecker said. “We have always had it anyway, so from Clinton County’s perspective, it’s not a very difficult program to comply with because we have always been putting our information out on the web.”
According to Longnecker, the only performance trend that is skewed is the cost per resident. Longnecker said that the state wants the county to include costs of public improvement, capital expenditures, and 911 expenditures to cost per resident, as well as general fund operating expenses.
Therefore, if a large capital expenditure project, like construction of a new building in the county, it may increase the cost per resident to account for that expense. Taxes pay a major role as well, according to Neilsen.
“The county taxes are only one portion of the taxes people pay,” Neilsen said. “If you live in East Lansing, you are paying totally separate taxes to the city of East Lansing in addition to the taxes you are paying to the county.”
The other performance trends in Clinton County are all accurate, according to Longnecker.
This long-term approach is something that other counties are beginning to adopt as well, including Neilsen’s own county, which according to Neilsen, sits around 70 percent of pensions funded. This long-term approach hurts at first, but will result in more pensions being funded and more retirees getting their hard-earned money back.
“Counties used to have a straight, defined benefit program,” Neilsen said. “Now, employees are on a hybrid plan, which is partly defined contribution and partly defined benefit. In the short run it would increase cost, but in the long run it will end up decreasing cost for the pensions.”