HomeMy WebLinkAboutResolutions - 2011.12.15 - 18819MISCELLANEOUS RESOLUTION #11306 December 15, 2011
BY: FINANCE COMMITTEE, TOM MIDDLETON, CHAIRPERSON
IN RE: DEPARTMENT OF MANAGEMENT AND BUDGET — APPROVAL OF FY 2011 DEFICIT
ELIMINATION PLAN
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Chairperson, Ladies and Gentlemen:
WHEREAS Public Act 140 of 1971 (the General Revenue Sharing Act) and Public Act 34
of 2001 (revised Municipal Finance Act)required local units of government submit a "deficit
elimination plan" when any governmental fund experience negative unreserved fund balance and
when any proprietary fund experiences negative unrestricted net assets; and
WHEREAS Oakland County completed the fiscal year ending September 30, 2011 with
four (4) funds with negative unassigned fund balances, which required submission of a deficit
elimination plan.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of
Commissioners approves submission of the attached deficit elimination plan to the Michigan
Department of Treasury.
Chairperson, on behalf of the Finance Committee, I move adoption of the foregoing
resolution.
Finance Committee
FINANCE COMMITTEE
Motion carried unanimously on a roll call vote.
BROOKS PATTERSON. OAKLAND COUNTY EXECUTIVE
December 16, 2011
Bureau of Local Government Services
Michigan Department of Treasury
Treasury Building
430 West Allegan Street
Lansing, MI 48922
For the fiscal year ending September 30, 2011, Oakland County reports four (4) funds
with a negative unassigned fund balance (e.g. a "deficit). Below, please find a listing of
those funds, the amount of the deficit, and a deficit elimination plan:
Capital Projects Fund - Lake Levels - Act 146 $(294,364)
The negative unreserved fund balance in the Lake Levels - Act 146 Fund primarily
reflects costs that are related to the Bush Lake Level project in the amount of $263,228
and the Upper Straights Lake Level Dam Reconstruction project in the amount of
$36,745.
Litigation pertaining to the Bush Lake Level project has concluded and the project is
moving forward. A ten year assessment has been approved to cover the costs of this
project. The Long Term Special Assessment for the Bush Lake Level project was
assessed beginning in our Fiscal Year 2011. The long-term receivable is now on the
Balance Sheet to track the collection of the Long Term Special Assessment.
The project for Upper Straights Lake Level is in the design phase and will be funded
through a special assessment that will be determined once an estimate of construction
costs has been calculated. The project consists of replacing an existing lake level control
structure in West Bloomfield Township, Oakland County, Michigan. The existing
structure will be removed and replaced with a new one. The project is currently in the
design phase. The design is approximately 80% complete. When the design phase is
completed, the estimated project cost will be determined. It is planned that the project
will be financed with a loan from the Oakland County Board of Commissioner's Long
Term Revolving Fund. The loan will be repaid by an assessment to the Upper Straits
Lake Level Special Assessment District over a proposed ten year period. The Special
Assessment District must be updated prior to requesting the loan. Updating the district
requires Circuit Court action and therefore, the project schedule is directly affected by the
Court schedule. Any delays in receiving the Court judgment on the district update will be
reflected in the timing of receiving loan money and approval of special assessment.
Capital Projects Fund — Drain Chapter 4 Construction $( 9,476)
The negative unreserved fund balance in the Chapter 4 Drain Construction Fund reflects
costs that are related to the Lower Pettibone Lake Sanitary Chapter 4 Drain Construction
project in the amount of $9,476. A loan from the Long Term Revolving Fund was
approved by the Oakland County Board of Commissioners to provide advance funding
for this project. A five year assessment has been approved to repay the loan. The draws
from the Long Term Revolving Fund loan are being tracked on the Balance Sheet of the
Construction Fund.
Special Revenue Fund - Lake Levels - Act 146 $(62,454)
The Lake Levels - Act 146 consists of 30 separate lake level funds. Annually, lake level
funds are reviewed and assessments authorized. Assessments are determined in July and
are placed on December tax bills. The assessments are meant to cover any individual
fund deficits identified at that time, and also to cover the anticipated operating costs for
the following year. The majority of the overall net negative unreserved fund balance is
due to a remaining $41,190 deficit in the Oxford Multi Lake Level Fund. The Oxford
Multi Lake Level Fund deficit is related to a large maintenance project that is being
funded through a 5 year special assessment which is being assessed through 2014.
Negative unreserved fund balances in the various other lake level funds will be reviewed
and eliminated in fixture years assessments.
A review of the equity balances over the last 5 years has led us to realize the number of
times when our initial review for budgets and assessments may not have been adequate to
cover the deficit and next year's expenses. Through further review, it has come to our
knowledge that the age of these structures are going to require more maintenance and
possible structural improvements. In addition to including our deficits and anticipated
maintenance expenses into the next years Special Assessment, it is our plan that we will
establish a contingency reserve for each of the lake level funds in order to cover
unanticipated expenses, and to help fund necessary improvements and rehabilitations as
they occur. The additional amount to be collected to begin the establishment of reserves
for these funds will be 15% of the annual expenditures for each Lake Level Fund; the
Special Assessments presented to the Board of Commissioners in the fall of 2011
included the additional amount.
Special Revenue Fund - Pollution Control Grants S( 669)
The negative unassigned fund balance reflects the fact that this grant fund operates on a
reimbursement basis; e.g. the County pays the original expenses and is reimbursed by the
grantor agency after submission of the proper support documentation. Typically,
reimbursement for year-end expenditures lags by two to three months. Once
reimbursement is obtained, the negative unassigned fund balance will be eliminated.
Should the reimbursement not be sufficient to cover the expenditures, the County has
match funds budgeted which will be transferred to cover any remaining deficit.
We trust that the above demonstrates that Oakland County has sufficient plans in place to
eliminate the negative unassigned fund balance reported in the financial records for the
fiscal year ending September 30, 20011. Any questions regarding this matter should be
directed to my attention at 248-858-0807, or by e-mail at soave0:!oakgov.com.
Sincerely,
Timothy J. Soave, CPR)
Manager, Fiscal Services Division
Department of Management and Budget
Oakland County, Michigan
cc: Robert Daddow, Deputy County Executive
Laurie Van Pelt, Director, Management and Budget
John McCulloch, County Water Resources Commissioner
Resolution #11306 December 15, 2011
Moved by Long supported by Zack the resolutions (with fiscal notes attached) on the amended Consent
Agenda be adopted (with accompanying reports being accepted).
AYES: Covey, Crawford, Dwyer, Gershenson, Gingell, Gosselin, Greimel, Hatchett, Hoffman,
Jackson, Long, Matis, McGillivray, Middleton, Nash, Nuccio, Potts, Quarles, Runestad, Scott,
Taub, Weipert, Woodward, Zack, Bosnic. (25)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the amended
Consent Agenda were adopted (with accompanying reports being accepted).
I HEREBY APPROVE THE FOREGOING RESOLUTION
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Bill Bullard Jr., Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true
and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on December
15, 2011, with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at
Pontiac, Michigan this 15th day of December, 2011.
Q 1,
Bill Bullard Jr., Oakland County