HomeMy WebLinkAboutResolutions - 2013.12.12 - 21122MISCELLANEOUS RESOLUTION 113306 December 12, 2013
BY: FINANCE COMMITTEE, TOM MIDDLETON, CHAIRPERSON
IN RE: DEPARTMENT OF MANAGEMENT AND BUDGET - APPROVAL OF FY 2013
DEFICIT ELIMINATION PLAN
TO THE OAKLAND COUNTY HOARD 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, 2013 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 COMMITTEE VOTE:
Motion carried unanimously on a roll call vote with Scott and Matis absent.
COAKLAN L. BROOKS PATTERSON, OAKLAND COUNTY EXECUTIVE
COUNTY MICHIGAN
DEPARTMENT OF MANAGEMENT AND BUDGET
FISCAL SERVICES DIVISION
Timothy J. Soave, Manager
December 12, 2013
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, 2013, 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 $(225,629)
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 $192,060
and the Upper Straights Lake Level Dam Reconstruction project in the amount of
$39,412.
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 S36,659 to $192,060 for FY 2013,
Upper Straits Lake Dam Replacement - The project consists of replacing an existing lake
level control structure in West Bloomfield Township, Oakland County, Michigan. The
project is currently in the design phase. 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 Conunissionef 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 $(122,740)
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 is proposed 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 complete and bids are scheduled to be received in November 2013.
Municipal bonds will be sold to finance the project and repay the Long Term Revolving
Fund. The bond sale has been delayed due to litigation regarding the project. It is
anticipated that the bond sale will occur in FY 2014.
Special Revenue Fund - Lake Levels - Act 146 $(258,173)
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. However, our maintenance and operation costs are directly affected
by weather conditions and several of our lake level controls have electrically operated
augmentation pumps, making it difficult to predict future expenses.
Below is an explanation for the significant lake level maintenance fund negative
unreserved fund balances. Negative unreserved fund balances in the other lake level
funds will be reviewed and eliminated in future year's assessments
1.) Bush Lake Level Maintenance Fund- This negative unreserved fund balance is
primarily due to an invoice from Oakland County Corporation Counsel that
was received several years after the closure of the construction fund. The
beginning 2013 negative unreserved fund balance was $24,112.96 and has
been reduced to $21,654.04 by the end of FY 2013. This negative unreserved
fund balance will be eliminated over the next several years.
2.) Oxford Multi Lakes Level Maintenance Fund- the Oxford Multi Lake Level
Fund negative unreserved balance is due to a large maintenance project that is
being funded through a five (5) year special assessment through 2014. In
2008, the Oakland County Board of Commissioners authorized a loan in the
amount of $126,000 from the County's Long Term Revolving Fund to the
Oxford Multi-Lakes Special Assessment District to be collected in five annual
installments. The beginning 2013 negative unreserved fund balance was
$31,148.20 and has been reduced by $10,448.26 to $20,699.94 by the end of
FY 2013. This negative unreserved fund balance should be eliminated in two
(2) years.
3.) Tipsico Lake Level-Lake level assessments for Tipsico Lake will be increased
in FY 2014 to eliminate the FY 2013 negative unreserved fund balance of
$7,411.19.
4.) Waterford Multi Lakes-(FY 2013 negative unreserved fund balance of
$75,468.98). A maintenance repair project was performed on the Van Norman
Lake Level structure in 2013. The cost of the repair was included in the FY
2014 assessment and the negative unreserved fund balance should be
eliminated by FY 2015.
5.) White Lake Level- (FY2013 negative unreserved fund balance of $65,320.56).
The augmentation well for this lake required a project to repair the pump. The
costs for the repair has been included in the FY 2014 assessment and the
negative unreserved fund balance should be eliminated by FY 2015
6.) Bunny Run Lake Level — Lake Level assessments for Bunny Run will be
increased in FY 2014 to eliminate the FY 2013 negative unreserved fund
balance of $4,270.95.
7.) Crystal Lake Level — (FY 2013 negative unreserved fund balance of
$6,759.94) A fence replacement project was completed in FY 2013. The cost
of the project was included in the FY 2014 assessment and will be recovered
by FY 2015.
8.) Lake Louise Lake Level — Lake Level Assessments for Lake Louise will be
increased in FY 2014 to eliminate the FY 2013 negative unreserved fund
balance of $5,089.01.
9.) Oxbow Lake Level — (FY 2013 negative unreserved fund balance of
$100,771.25) A dam repair project was completed in FY 2013. The cost of
the project was included in the FY 2014 assessments and the negative
unreserved fund balance should be eliminated by FY 2015.
Additional Plan Information:
A review of the equity balances over the last 5 years led to the realization that the 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 become known that the age of these
structures is such that they are going to require more maintenance and possible structural
improvements. In addition to increasing next year's Special Assessments to cover the
existing negative unreserved fund balances, and anticipated maintenance expenses, plans
include the establishment of a contingency reserve for each of the lake level funds in
order to cover unanticipated expenses. The additional amount to be collected to begin the
establishment of reserves for these funds will initially be 5% and will increase to 15% of
the annual expenditures for each Lake Level Fund, which is the maximum allowed under
the authority of Part 307 of P.A. 451 of 1994, as amended. In addition, the Oakland
County Water Resources Commissioner will implement a process using our
Comprehensive Asset Management System (CAMS) to compare actual operation and
maintenance expenses with lake level budgets on a quarterly basis.
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, 2013. Any questions regarding this matter should be
directed to my attention at 248-858-0807, or by e-mail at soavet@oakgov.com .
Sincerely,
Timothy J. Soave, CPFO
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
Jim Nash, County Water Resources Commissioner
Resolution #13306 December 12, 2013
Moved by Spisz supported by McGillivray the resolutions (with fiscal notes attached) on the amended
Consent Agenda be adopted (with accompanying reports being accepted).
AYES: Dwyer, Gershenson, Hatchett, Hoffman, Jackson, Long, Matis, McGillivray, Middleton,
Quarles, Rdnestad, Scott, Spisz, Taub, Weipert, Zack, Bosnic, Crawford. (18)
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).
,SactA-U
I HEREBY 09140\9E 7M RESOLUTION
CHIEF DEPUTY OO(JNTY EXECUTW
ACTING PURSUANT TO MCL 45.569A (7)
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I I Lisa Brown, 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 12,
2013, 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 12th day of December 2013.
Lisa Brown, Oakland County