After 11 weeks of budget work sessions, the Leelanau County Board of Commissioners is nearing a finalized (and balanced) operating budget for the 2026 fiscal year. At a special meeting held Monday afternoon, board members discussed some of the key remaining question marks in next year’s budget, the biggest of which is how to navigate a substantial increase in the county’s employee health insurance costs.

According to County Finance Director Cathy Hartesvelt, the latest draft budget projects total county revenues of $18,396,425 in 2026 and allocates total expenditures of $18,396,000.

“It’s the first time that I’ve been here that we didn’t have a deficit budget,” remarked Board Vice Chair Ty Wessell, who is currently in his sixth two-year term as a county commissioner. “We have a balanced budget, we had very little disagreement amongst us on how we’re spending our money, and I think we ought to applaud what we’ve done.”

Despite Wessell’s optimism, there were a few sticking points left to interrogate at Monday’s meeting. District 5 commission Alan Campbell, for instance, said he wasn’t “comfortable” with the current revenue projections, because they assume a year-over-year increase in property tax revenues.

“I believe our last revenue number was $100,000 less than [this projection],” Campbell said. “I’m a little nervous about the tax revenue, and I say that because the last memo that we got from the treasurer…was $14,179,000. I don’t know by what basis the revenue proposal for property taxes went up, other than that our expenses went up… I’m not sure what changed that would change those tax revenues by $100,000…”

In response, County Administrator Jim Dyer explained that historical data indicates Leelanau can safely plan on its property tax numbers going up.

“In the past, what we’ve done…is to take the previous year’s [tax] receipts and simply carry them over – despite the fact that, over the past 10 years, we’ve had anywhere from a 2 percent to 9 percent increase in actual taxes collected, from year to year,” Dyer said. “We’re proposing the projection based on actual data, rather than simply saying we’re going to duplicate what happened the year before.”

Despite assuming higher tax revenues in 2026 than in 2025, Dyer wrote in a memo to commissioners that he believes the projection is still conservative: “While earlier projections showed we could expect as much as a 6.12% increase in property tax collections in 2026, the budget that we will present includes only a 4.75% increase.”

The biggest elephant in the room during Monday’s meeting, meanwhile, was health insurance. Leelanau County has a self-funded employee health insurance plan and then purchases what is called stop loss insurance to protect itself against large claims. Under this model, the county pays health claims by employees, but is protected from liability above a certain “stop loss” amount – essentially a deductible – both on an individual claim level and an aggregate level. County commissioners considered pursuing a different health plan earlier this year, after hearing from a consultant that health costs would likely skyrocket in 2025, but ultimately opted to keep things as they were.

Dyer is not a fan of the current plan, and told commissioners Monday that it has now become a problem for the budgeting process.

“I’ve said really since I first got here that the insurance as we have it constituted was not sustainable – and that, eventually, if we continued to maintain a $20,000 stop loss, that we would be priced out of the market,” Dyer said. “And that’s happened this year. Our stop loss premium cost last year was roughly $1,200 per contract, and that’s been raised 50 percent to $1,800 per contract, per month. We had originally budgeted $2 million for health insurance when we presented the budget to you in June. The stop loss cost alone would exceed $2.1 million...”

The current draft budget calls for $2.6 million for health insurance costs, which Dyer thinks “is reasonable to keep benefits as close as we possibly can to what we currently offer.” That amount would include increasing the stop loss deductible to $50,000 per person, which Dyer said “takes the cost down to below what we’re paying for stop loss now…to about $1.1 million.”

“That will give us some ability to at least pay claims, in addition to the stop loss,” Dyer said.

The county’s renewal for its stop loss plan doesn’t come up until February, which gives some extra time to explore alternatives. One of those options is the West Michigan Health Insurance Pool, which Dyer said is currently preparing a quote for the county.

“They pool their resources together to get a much higher stop loss rate,” Dyer explained. “We would get a full insurance contract with them. It would not involve self-insurance at all… If [the quote] is less than $2.6 million, that’s probably something we would opt to use.”

In the meantime, the county has had to figure out how to balance a budget that now includes a nearly $1 million health insurance increase compared to 2025, when the budgeted health plan expenditure was $1.7 million. Key to that balancing act is a proposal from Dyer to lease four new vehicles the county needs in 2026, rather than purchasing them.

“Instead of spending $256,000 outright and losing that cash… [leasing] reduces it down to about a $90,000 expenditure for 2026 for those four cars,” Hartesvelt noted.

The Leelanau County board is expected to finalize and approve its 2026 budget at their next regular meeting, scheduled for the evening of Tuesday, November 18.