Change or Go Broke

Commission on Aging
COA Director Jack Messer speaks at the Boyne Area Senior Center regarding financial issues. (Photo: C. Faulknor/BC Gazette)
Charlevoix County Commission On Aging Director Jack Messer visited the Boyne Area Senior Center last week for a question and answer session on the state and future of senior needs.

By: Benjamin J. Gohs, Associate Editor
bgohs@boynegazette.com
(231) 222-2119

Charlevoix County Commission On Aging Director Jack Messer visited the Boyne Area Senior Center last week for a question and answer session on the state and future of senior needs.

 

“There is a lot going on,” he said. “This isn’t a crisis – it’s a wake-up call. We have time and we have resources because we have identified what we are facing and we can explore our options.”

Messer added, “If we would have waited until we were out of time and out of money then it would have been a crisis, but we didn’t do that.”

Jack Messer, COA Director

Messer said the two major issues facing the COA is the impending increase in demand which will come primarily via the aging baby boomer population.  “Everybody think back to when the baby boomers started turning 5 and 6, what did we have to do? We had to build new elementary schools – we didn’t have enough,” he said. “There was a huge spike in our population after World War II. Our servicemen and women came back home and what did they do, they started raising families.”

Messer said the baby boomers’ retirement numbers will peak in seven or eight years.  “What that’s going to mean to us is we’re going to have about a 30 percent increase in the number of seniors we’re going to have,” he said. “I think it’s logical that they’re going to need services. They’re going to ask for services. So, how do we manage that spike?”  Messer said Northern Michigan will actually see nearer a 40 percent increase.  “Our population in Northern Michigan has a larger or disproportionate number of seniors,” he said. “How many visitors ended up retirees here?”

The other major issue facing the COA, Messer said, is the budget.  “For the last few years we have been spending more than we took in,” he said. “In 2006 there was a request from some very vocal people in the public that said you’ve got a fund balance, and at that time it was over $2 million, and they felt that should be spent down or we should give a rebate back to the citizens.”  Messer said the money was begun to be spent on various senior programs beyond the amount of money being taken in.

COA Director Jack Messer speaks at the Boyne Area Senior Center regarding financial issues. (Photo: C. Faulknor/BC Gazette)

“What happened in 2008, 2009, with the downturn in the economy and the downturn in the housing market our property values took a huge dip and because of that the monies generated by the senior millage started down and they’ve gone down every year since then,” he said. “That gap, that margin if you will, has grown.”

According to Messer, the COA was forced to transfer $329,000 from its savings account to its operating fund.  This year they transferred $355,000 into operating.  “We can’t keep doing that or we’ll go broke,” Messer said.  Messer’s goals are to balance the budget and maintain some fund balance or rainy day fund.  “How much money should we have in our fund balance for emergency?” he said.

The COA’s auditor said the COA should have eight to nine months of operating expenses in reserve.  Messer said the COA’s annual budget is roughly $1.462 million and, according to his calculations, the emergency fund should be $1,000,095.  “That’s what we should have in our savings account in case of … and we all know there will be emergencies,” Messer said.  The senior fund balance is currently $1.2 million.

“If we continue spending the way we’re spending today, by fourth quarter 2014 we’ll be broke,” Messer said.

Messer said his first year on the job he cut a quarter of a million dollars from the budget.  “Every dollar that we save stays in the fund balance and saves us time,” he said.  Messer said all the cuts that can be made to spending have been made.  “If we make any further cuts we are cutting deeply into the programs that you folks (seniors) are taking part in,” he said. “We’ve cut to the bone.”

Messer said one option is asking the taxpayers for even more money.  “The radio generation built our senior centers and built the model on how our senior centers operate,” he said. “The next generation, however, don’t see things the same way.”  Messer said the focus groups orchestrated by the COA discovered future seniors seem to want less of a congregational style of senior services.  “They don’t see the senior centers as meeting their needs or their models,” he said. “They would rather do other things in the community – same types of actives, but by partnering in the community.”

Messer told the small crowd of mostly seniors that the COA will need to work to determine how to meet that desire.  Messer mentioned the possibility of renting the senior centers out to help raise funds.  There has been a 40 percent increase in the demand for home services through the COA over the last few years.

One audience member said losing some transportation services has had a direct effect on the number of seniors who can attend services and programs at the Boyne senior center.  The COA may begin charging fees for the services it offers. The meals would remain on a donation basis, but a sliding scale fee could be applied on most other services in the future.  On this tentative plan, seniors could also purchase additional services at the cost of the services.  “The purpose … is to develop a sustainable model,” Messer said. “We believe a fee-based system … is the answer.”

Charlevoix County Commissioner Chris Christensen (R-District 2), who attended the meeting, urged the audience to bring their input to the COA.  “Any and all ideas should be considered to make this viable,” he said.

 

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