HomeMy WebLinkAboutResolutions - 2012.12.13 - 20637MISCELLANEOUS RESOLUTION #12323 December 13, 2021
BY: FINANCE COMMITTEE, TOM MIDDLETON, CHAIRPERSON
IN RE: DEPARTMENT OF MANAGEMENT AND BUDGET — APPROVAL OF FY 2012 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, 2012 with
three (3) 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 Copr*i-ittei
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FINANCE COMMITTEE
Motion carried unanimously on a roll call vote with Zack absent.
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COUNTY MICHIGAN
DEPARTMENT OF MANAGEMENT AND BUDGET
L. BROOKS PATTERSON, OAKLAND COUNTY EXECUTIVE
FISCAL SERVICES DIVISION
Timothy J. Soave, Manager
December 13, 2012
Bureau of Local Government Services
Michigan Department of Treasury
Treasury Building
430 West Allegan Street
Lansing, MI 48922
DRAFT
For the fiscal year ending September 30, 2012, Oakland County reports three (3) 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 $(262,410)
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 $228,719
and the Upper Straits Lake Level Dam Reconstruction project in the amount of $39,409.
Bush Lake Level- Construction of a new lake level control structure has been completed
and a Long Term Special Assessment for the project commenced in FY 2011. In 2010,
the Oakland County Board of Commissioners authorized a loan in the amount of
$300,000 from the County's Long Term Revolving Fund to the Bush Lake Special
Assessment District to be collected in ten annual installments. The long-term receivable
is now on the balance sheet to track the collection of the Long Term Special Assessment.
The deficit amount has been reduced by $34,508.94 from FY 2011 balance of
$263,228.43 to FY 2012 balance of $228,719.49.
Upper Straits Lake Dam Replacement - 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 $( 62,744)
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. 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.
The design for the project is approximately 75% complete. Once the design is completed
and bids are received for the project, municipal bonds will be sold to finance the project
and repay the Long Term Revolving Fund. It is anticipated that the bond sale will occur
in FY 2013.
Special Revenue Fund - Lake Levels - Act 146 $(137,093)
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. Clearly the receipt of revenue from these assessments happens after
the close of the County's fiscal year; leading to the reporting of a deficit in this fund.
The deficit in this fund reflects this difference in timing between the close of the fiscal
year in September and the approval of the special assessment in October and the
December levy. As the attached spreadsheet details, although the fund balance is
($137,093) as of September 2012; already approved lake level assessments will bring in
$476,833 in revenue, this will be sufficient to cover the reported deficit. However, it is
important to realize as these projects go forward and expenditures are incurred, similar
deficits will occur at the end for fiscal year 2013.
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 years 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.
• 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, 2012. Any questions regarding this matter should be
directed to my attention at 248-858-0807, or by e-mail at
Sincerely,
Timothy J. Soave, CPF0
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 #12323 December 13, 2012
Moved by Crawford supported by Jackson the resolutions (with fiscal notes attached) on the Consent
Agenda be adopted (with accompanying reports being accepted).
AYES: Covey, Crawford, Dwyer, Gershenson, Gingell, Gosselin, Hatchett, Hoffman, Jackson,
Long, Matis, McGillivray, Middleton, Nuccio, Potts, Quarles, River, Runestad, Scott, Taub,
Weipert, Woodward, Zack, Bosnic. (24)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the Consent
Agenda were adopted (with accompanying reports being accepted).
HEREBY APPROVE MIS RESOLUTION
CHEF DEPUTY COUNTY EXECUTIVE
ACTING PURSUANT TO MCI_ 45.559A (7)
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
13, 2012, 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 13 th day of December, 2012.
P.):_a_ EL)._
Bill Bullard Jr., Oakland County