North Michigan News

Rep. Jack Bergman and his team have successfully recovered nearly $7 million from the Internal Revenue Service (IRS) for the Grand Traverse Pavilions in Michigan's First District. The funds were locked in a bureaucratic maze but were finally released through the efforts of Bergman's offices in Washington, D.C., and Traverse City.

According to James Hogge, political director for Rep. Bergman, the recovery of the funds was the result of hard work and perseverance. He stated, "This was really an error on the IRS side. Our staff in Traverse City and D.C. worked very hard to cut through the red tape. We don't take no for an answer."

The financial crisis at Grand Traverse Pavilions began during the COVID-19 pandemic and was exacerbated in 2023. The facility faced acute staffing shortages, leadership turnover, and subpar quality ratings. In September, they were forced to cut 15 full-time positions and accumulate significant debt while waiting for the much-needed funds.

Pavilions officials reached out to Rep. Bergman's office for help after unsuccessful attempts to secure assistance from U.S. Sen. Gary Peters. Mary Marois, chair of the county Department of Health and Human Services, expressed gratitude for Bergman's team, stating, "Our board members are thrilled that this money is finally coming through. We're very grateful for the help from Bergman's team. They made it happen in record time."

In addition to the IRS funds, Pavilions also received $3.77 million in reimbursements from the state of Michigan. These funds were the result of changes in how Medicare and Medicaid payments are calculated. The priority now is to repay the $5.78 million borrowed from Grand Traverse County during the crisis.

Outgoing Grand Traverse County Treasurer Heidi Scheppe explained the process, stating, "The IRS will send the check to [the treasurer's] office, which we will then deposit into the Pavilions fund [account]. Instead of carrying a negative balance, they'll show a positive balance."

With the financial crisis resolved, the focus for the DHHS board and Pavilions management is on maintaining fiscal responsibility and a positive fund balance. County Commissioner T.J. Andrews expressed delight at the news, stating, "It's been a long time with lots of uncertainty. Unfortunately, that cast a shadow over the relationship between the Pavilions and the county."

The resolution of the financial problem marks a turning point for the organization. In addition, Pavilions recently appointed a new CEO, received an improved quality rating from the federal government, and settled a whistleblower lawsuit.

Grand Traverse Pavilions, located on the grounds of the Grand Traverse Commons, provides skilled nursing care, assisted living quarters, respite care, and rehabilitation services to low-income senior citizens. The facility is the largest county-owned facility of its kind in Michigan.

Rep. Bergman was ecstatic upon hearing about the swift resolution of the ERC logjam. Hogge praised Lauren Pauly, Bergman's district representative in Traverse City, for her dedicated work on the Pavilions' financial problem.

The recovery of nearly $7 million from the IRS was made possible through federal programs aimed at stimulating the economy and supporting organizations during the COVID-19 pandemic. The funds were part of the Employee Retention Credit program, which offered cash reimbursements to employers. The IRS had temporarily halted processing new claims due to widespread fraud, causing delays for legitimate claims like the one faced by Pavilions.

The successful recovery of these funds is a significant victory for Rep. Bergman and his team. It provides much-needed relief for the Grand Traverse Pavilions and ensures the continuation of their vital services to the community.