County’s tax revolving fund grows to over $8.4M

Alpena County had a little more than $8.4 million in its Delinquent Tax Revolving Fund at the end of July.

During an annual report this week, Treasurer Kim Ludlow informed commissioners the fund grew by approximately $250,000 over the year.

That amount would have been larger had commissioners not taken out a portion of the interest earned on the account each of at least the past four years to help balance the general fund budget. They are budgeted to take a little over $154,000 in interest out of the account this year. They are also using $1.5 million from the fund to cover cash flow for the airport runway renovations. That money is expected to be replaced when the airport is reimbursed for those costs from the Federal Aviation Administration (FAA).

This is only the third time the fund has topped $8 million since 2018, when it was valued at over $8.7 million.

The primary use of the Tax Revolving Fund is to cover the amount of annual delinquent property taxes at the county, all townships and other local taxing authorities until those taxes are collected and returned to the fund. It also houses funds earned from the sale of tax delinquent properties. The net gain from last year’s sale of tax delinquent properties from the 2019 tax year was a little over $33,000.

The Tax Revolving Fund Cash Balance Requirement Policy mandates that 2.2 times the annual settlement plus obligations must remain in the fund at all times. Based on the July 31 figures, that equates to roughly $6 million, leaving a surplus in the account of a $2.4 million.