Pressure continues to mount on Grand Traverse County Treasurer Jamie Callahan, who gave yet another required report under oath Wednesday – with commissioners of both parties expressing frustration with his performance. Commissioners went into closed session to discuss a performance bond that could protect the county from liability related to the treasurer’s office and have asked their attorney to provide a framework for removing an elected official from office.

Commissioners in recent weeks have repeatedly invoked state law to require Callahan to give them reports under oath. At their September 2 meeting, commissioners – who pressed Callahan for the past year on issues ranging from late state audit filings to delayed bank reconciliations – grilled the treasurer over missed IRS payroll tax payments.

The county missed multiple payments in past quarters that currently total nearly $140,000 in outstanding penalties. While staff are working to have those penalties waived by the IRS, County Finance Director Dean Bott previously told The Ticker there was “no way” the fines would be fully forgiven. Callahan acknowledged his office had made mistakes and was at fault for missing some payments.

During his update Wednesday, Callahan responded to commission questions about pages that were missing from his September 2 written report. Callahan said he couldn’t find the original IRS documents and that they were likely misplaced when his office was temporarily relocated during Governmental Center renovations.

Callahan also provided an update on bank reconciliations. Vice Chair TJ Andrews previously said the IRS payments were likely missed because the county is so behind on reconciliations. Comparing the process to balancing a checkbook, she said that “by getting behind on reconciliation, you’re not able to see” when transactions don’t line up as they should.

According to Callahan, a September 27 report shows the county has 1,702 line items representing over $5.2 million in unreconciled transactions. Approximately 975 items are over 30 days old. However, Callahan’s office has been working with the county’s finance department to get up to speed – he expected reconciliations to come within a 45-day window by November – and has also begun working with outside firm The WoodHill Group.

Commissioners approved bringing in professional services to help the treasurer’s office at their September 16 meeting. They have yet to approve the final contract with The WoodHill Group – estimated at $50,000 to start – but County Administrator Nate Alger had the firm get started under his own spending authority, citing the urgency of the situation. The firm is expected to work closely with Callahan for a full year, or treasurer’s cycle.

That contract cost, which is not covered in the treasurer’s budget and thus will come out of the county’s general fund, set off several excoriating comments from commissioners. In addition to a full accounting of waived and current penalties, interest, and late fees – which commissioners requested but did not receive in Callahan’s report Wednesday – Commissioner Ashlea Walter said the county was now paying tens of thousands of dollars to train the treasurer how to do his job.

“It’s astounding to me that we’re paying this money out of the general fund to support an elected official’s work because he doesn’t have the skills yet to know what’s going on,” she said. Commissioner Fern Spence agreed, saying there’s a difference between professional development and possessing the essential skills required for a position. “You should have a foundation that’s established to do the basic necessities,” she said. “We’ve been brushing this underneath the rug for a while...I think it needs to be known.”

Commissioner Penny Morris, who framed her feedback as an “admonition” rather than judgment, called the situation a “cautionary tale.” She said: “When you find yourself in a position where you're over your head and getting behind, sometimes the instinct is to hide from it. But there's a lot of strength in asking for help on the front end before it gets to this point and starts costing taxpayer dollars.”

Callahan did not refute commissioners’ assessment of the situation, nor did Alger. “Commissioner Walters characterized it correctly,” he said, adding that the county’s focus now is “to minimize exposure and liability going forward.” Because Callahan did not provide all the details requested by commissioners in his report Wednesday, the board passed a motion requiring him to appear under oath again at their October 21 meeting.

Commissioners also went into closed session to discuss an attorney’s memo on a performance bond. The bond is essentially an insurance policy that would protect the county from additional liability related to the treasurer’s office. How much that bond would be for, and how it would be paid for and executed, are among the issues likely covered by the attorney’s memo. That memo remains privileged, but Andrews told The Ticker commissioners will act on the issue at an upcoming meeting.

Commissioners also requested the county’s legal counsel to “provide a framework and process for removal of elected officials,” according to the motion. While removing elected officials is difficult in Michigan – primarily involving a recall or gubernatorial action – Andrews says it’s not impossible. The opinion will “lay out the circumstances under which we could exercise that authority,” she says. She cites as an example that while Callahan has continued to appear under oath as requested, he’s repeatedly not provided details requested by the board. “I don’t think it’s enough simply to take the stand,” she says.

Andrews gives Callahan “credit for showing up,” but believes it’s “too little, too late” to redeem his standing with the commission. “It’s hard for me to put myself in his shoes, but I would have resigned by now,” she says. “I don’t think it’s any secret that I have lost confidence in the treasurer…we need a willing partner in that office who’s collaborative.”

When asked about his possible removal or resignation, Callahan said by email that “it’s the board’s prerogative to ask legal counsel about those things if they like. It does not deter my resolve to serve the people of Grand Traverse County.” Callahan said his department “hit some pretty big bumps in the road” over the past year with staff departures, followed by new hires. “Getting back up to speed doesn’t happen overnight. It has taken longer than I would have liked, but we are making great progress and are confident we will be caught back up this year,” he said.

Callahan did not give any indication he’s considering resigning. “I will continue to work hard for the county in my position as treasurer,” he wrote.