TRAVERSE CITY — Improved oversight of fund balances was the motivation for a recommended 50% reduction in Grand Traverse County’s Veterans Affairs millage rate proposed by county board chair Scott Sieffert.
That significant cut was considered last week and ultimately rejected by commissioners, but the point was made clear: The funds generated by these tax levies need to be spent on the purposes for which they are intended.
Commissioners received an analysis from Finance Director Dean Bott, displaying the last three years of revenues, expenditures and fund balances for the county and six other millages and surcharges collecting tax dollars.
According to the document provided to the board, the county, the Commission on Aging millage and the 911 surcharge show fund balances that have accumulated for use toward new facilities currently under construction.
Millages for Veterans Affairs and the county road commission also carried larger fund balances at the end of 2025. Board vice chair T.J. Andrews highlighted those two funds, particularly regarding their revenues and expenditures over the previous three years.
“You have very substantial revenues that are far exceeding expenditures,” she said. “Veterans (Affairs) and roads are concerning to me.”
The road commission’s fund balance in 2025 was calculated at more than $141 million, however, Bott explained their accounting is different than any of the other funds the county analyzes.
“The reason for those increases in that bottom-line position is because of the work that they’ve done on the road system,” he said.
“That improvement to the road system becomes an asset, which increases the bottom line net position,” he continued. “It doesn’t mean they’re not spending their money. … They’ve done significant investment or improvements to the road system, which becomes an asset on the books that’s depreciated over the life of that improvement.”
Sieffert highlighted another difference between the two, noting the road commission has a fund balance policy in place and the Department of Veterans Affairs hasn’t yet presented one to the county.
Director Michael Roof provided information to the board during their Sept. 9 study session and answered commissioners’ questions, but Sieffert said during their Sept. 16 meeting that a deeper look at fund balances across the county is still necessary.
As of 2025, the Department of Veterans Affairs had a fund balance of more than $1.23 million.
Sieffert added that the board has asked “time and time again” for a fund balance policy for Veterans Affairs for the last year.
“And we’ve gotten the brush-off,” Sieffert said. “We are responsible for the tax dollars and I’d rather have tax dollars in people’s pockets — even if it’s $15 — than sitting in an account, making interest.”
The board chair also added that he’s heard about a plan “since January, (and) it’s September,” before he made the motion to reduce the Veterans Affairs millage rate by 50% to approximately 0.045 mills.
“They’d have half-a-million dollars in projected revenue next year with $1.2 million in their fund balance, so they would still have not quite $2 million to operate their $750,000 of expenditures,” Sieffert said. “They’re not going broke.”
Andrews supported the motion to allow board discussion.
Commissioners Rob Hentschel and Darryl Nelson agreed the last-minute timing of this proposal made them hesitant to OK it. They said they ultimately would not support it without the department’s knowledge or more information on their proposed plan.
“I hate to shoot from the hip and give a surprise to both the community and an organization that’s part of us without having more notice for the public,” Nelson said, adding that he agreed with the need for a fund-balance policy, but he couldn’t support the timing.
Sieffert said his reasoning for the motion was to remain focused on responsible spending.
“Our job is to make sure that they spend tax dollars responsibly and to sit there and bank a year-and-a-half’s worth of tax revenue and go: ‘We’re working on something,’ it’s not why I was elected, that’s not what I said to the folks that elected me,” he added.
Andrews added that she shared Sieffert’s concerns, but that this type of reduction could have an adverse effect.
“The flip side is, I am cautious of encouraging spending to avoid reduction,” she added. “I want to see a plan. … I want that money to go to dental services for veterans who don’t have enough money, I want to see that funding going to shelter and meals and services for veterans who need those things.”
The motion was defeated 1-7, with Sieffert casting the only ‘yes’ vote.
A second motion was carried, 7-1, to approve the 2026 tax rate request as presented, authorizing the board’s chair and County Clerk Samuel Gedman to sign the Form L-4029. Sieffert was the only ‘no’ vote for this action.
Sieffert then moved to refer the topic of millage fund balance oversight to the Policy Review Committee with specific instructions to develop a set of guidelines under which millage rates may be reduced, based on the level of its fund balance.
This motion was unanimously approved and a report is expected to come back to the county by the end of the first quarter next year.
Commissioner Brian McAllister, who serves as the county board’s representative to the Veterans Affairs administrative committee, was absent prior to the discussion and the votes.
Following last week’s meeting, Sieffert said in an interview with the Record-Eagle that it’s still unclear to the county what the Veterans Affairs fund balance is intended to cover for county veterans.
“No one presented a plan to us,” Sieffert said. “That was my whole point. The best use of tax dollars are in the taxpayer’s pocket.”
Sieffert acknowledged that, while some services and programming are actively provided to veterans, a clear plan should be given to the board for how the department intends to use the tax revenue.
“And that holds true for anybody that has a millage, or even a taxpayer-funded program that’s a department of the county,” he added. “If you’re sitting on a high fund balance … if you have this much money, then you’re charging too much or you’re not doing enough.”
Sieffert said he’s confident the board has laid the foundation to revisit the topic, including further oversight and a countywide fund balance policy.
“For those taxpayers out there that are disappointed, I expect the votes to be considerably different a year from now,” he added.
Between staff salaries, emergency assistance and contracts for current services and programming, Roof said Wednesday that it costs roughly $900,000 to run the department each year.
Within that budget, about $144,000 was allocated to the United Way of Northwest Michigan — set to close at the end of this month — for the United We Smile dental program, which had a contract with the Veterans Affairs department before it closed last year.
“Since that agency is closed down, there’s basically a surplus of money that would not be spent on that program and hasn’t been for many months,” Roof said. “There is extra money in there, there has been for a couple years now.”
Roof said the department’s Administrative Committee oversees the office and “has been working on a plan to pay things down,” adding that the current fund balance may be skewed.
“It’s not like I have multiple years of a fund balance sitting there,” Roof said, noting the department previously asked commissioners to lower the millage in 2020 because it was accumulating more than their expenditures at the time.
Roof said he welcomes a conversation with the board about lowering the millage rate if necessary, but he would hope to provide input in that discussion.
“I think that when they don’t have an idea of what goes on in my office or where my budget needs to be, just slashing it without my input would be reckless,” he said.
The director added that veterans living in Grand Traverse County are often able to receive quick access to medical care in the area, and many partake in the Community Care program offered at the Colonel Demas T. Craw VA Clinic in Traverse City.
“We talk to veterans all the time,” Roof said. “I mean, 90% of the veterans we talk to are very pleased with their care.”
The longest wait time, Roof added, typically affects veterans in need of mental health services who ask to be seen by a care professional multiple times a week.
“They have so many clients in that realm, sometimes people are pushed out a couple of weeks,” he said.
Taxpayers voted and approved the millage in 2022 and it won’t expire until next year.
“It should not be adjusted by anyone because that’s what the voters voted upon,” Roof said. “We’re providing more services and more outreach to lower that balance, and it just kind of got away from us in the last year because of some programs closing down.
“Our fund balance really isn’t that large.”
The Veterans Affairs Administrative Committee meets at 8 a.m. on the fourth Thursday of each month at the county’s Lafranier Road campus. County commissioners are scheduled to hold their annual meeting at 9 a.m. Oct. 7 at the Governmental Center in Traverse City. The public is welcome to attend.