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HomeMy WebLinkAboutResolutions - 2003.09.04 - 27376September 4, 2003 - MISCELLANEOUS.- RESOLUTION #03237 BY: FINANCE COMMITTEE, Chuck Moss, Chairperson IN RE: TRI-PARTY PROGRAM FUNDING, MAINTENANCE, AND DISBURSEMENT POLICY TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Chairperson, Ladies and Gentlemen: WHEREAS, the Oakland County Board of Commissioners Audit Subcommittee requested the Oakland County Auditing Division to review the Tr-Party Program and make recommendations regarding the Program scope and guidelines; and WHEREAS, the Oakland County Auditing Division has conducted the requested review and has determined a need to update the Tr-Party Program scope and guidelines to better represent the Program as it exists today; and WHEREAS, the Oakland County Board of Commissioners is permitted to, in accordance with Public Act 253 of 1917, MCL 247.121, appropriate funding from the General Fund to the Road Fund provided that there is a surplus in the General Fund and that the monies are used for construction, maintenance, and repair of highways under the supervision and direction of the Board of County Road Commissioners; and WHEREAS, the Oakland County Board of Commissioners adopted Miscellaneous Resolution #7791 in 1977 to address road improvement needs identified by the Road Commission for Oakland County in the areas of traffic safety and graveling for local units of government that do not have jurisdiction over their roads; and WHEREAS, Miscellaneous Resolution #7791 authorized the appropriation of $250,000 which was increased to $500,000 through the adoption of Miscellaneous Resolution #7901 in 1977 citing "the responsibility of effective government to anticipate such problems before they become emergencies;" and WHEREAS, past Oakland County appropriations have been matched by the Road Commission for Oakland County and local units of government constituting a 1/3 share contribution by each party; and WHEREAS, the portion of the annual Tr-Party Program fund appropriation available upon proper application to each Oakland County local unit of government has been established by a pre-determined formula set forth by the Road Commission for Oakland County; and WHEREAS, Oakland County has experienced tremendous growth in industrial, commercial, and residential development; and WHEREAS, the population of Oakland County has increased from 910,000 in 1970 to 1.2 million in 2000; and WHEREAS, this development within Oakland County has stressed road capacities creating conditions affecting traffic safety; and WHEREAS, over time road improvements through this Program have evolved into paving, lane additions or lengthening, bridges, and drainage as they relate to road safety, structure, or relieving congestion which may include fulfilling a local governmental unit's obligation of matched funding for federally funded road projects; and WHEREAS, the County of Oakland has adopted an appropriation in the amount of $1.5 million for the 2003 fiscal year with a proposed budget amount of $1.5 million for fiscal year 2004; and WHEREAS, the Board of Commissioners wishes to establish criteria and direction for the use of future County funding appropriated to the Road Fund. NOW THEREFORE BE IT RESOLVED that the General Appropriations Act is hereby amended from "that Road Improvement Funds may be released to the Road Commission upon approval of the specific projects by the General Government Committee of the Board of Commissioners" to "that appropriations to the Tr-Party Program may be permitted, in accordance with Public Act 253 of 1917, MCL 247.121, in amounts to be determined on an annual basis in accordance with said Act." BE IT FURTHER RESOLVED that future funding appropriated by the County of Oakland shall be administered in accordance with the attached Tr-Party Program Policy and Procedures included in this resolution as Attachment "A." Chairperson, on behalf of the Finance Committee, I move the adoption of the foregoing resolution. FINANCE COMMITTEE C/re-f FINANCE COMMITTEE: Motion carried unanimously on a roll call vote. f. Attachment "A" Tr-Party Program Policy and Procedures Policy The Oakland County Board of Commissioners is permitted to, in accordance with Public Act 253 of 1917, MCL 247.121, appropriate funding from the General Fund to the Road Fund provided that there is a surplus in the General Fund and that the monies are used for construction, maintenance, and repair of highways under the supervision and direction of the Board of County Road Commissioners. The Road Commission for Oakland County and each participating local unit of government shall match any future appropriations approved by the Oakland County Board of Commissioners constituting a 1/3 share contribution by each party. Tr-Party Program appropriation of funding decisions shall be made by the Oakland County Board of Commissioners based upon the best interests of the County and the needs of its citizens. The Oakland County Board of Commissioners expressly reserves the right to adjust the County of Oakland's 1/3 proportionate share at any time based on County budget issues. Program funding appropriated shall be utilized solely for the purposes of road improvements to roads under the jurisdiction of the Road Commission for Oakland County to include, but is not limited to, paving, lane additions or lengthening, bridges, and drainage as they relate to road safety, structure, or relieving congestion. This may include fulfilling a local governmental unit's obligation of matched funding for federally funded road projects on roads under the jurisdiction of the Road Commission. Project identification and selection shall be at the discretion of the Road Commission for Oakland County and each participating local unit of government utilizing methods previously adopted by the Road Commission for Oakland County in accordance with Road Commission policies and procedures. Tr -Party Program project expenditures are limited to those expenditures that the County of Oakland is authorized by MCL 247.121 to financially support and are limited to expenditures incurred in connection with road improvements as defined within this policy as adopted by resolution. Procedures for Administration The following procedures shall be implemented for the administration of the County of Oakland's 1/3 share contribution to the Tr-Party Program. Funding 1.) Funding appropriated by the County of Oakland through the Budget process shall be adopted through miscellaneous resolution on an annual basis. County funding shall not be released until the County receives the annual resolution from the Road Commission outlining Page 1 r 4 Attachment "A" Tr-Party Program Policy and Procedures the Tr-Party allocations. The Road Commission shall not expend any County funds until it has the final cost participation agreements from the communities and is ready to proceed with the projects. 2.) Funding appropriated shall be allocated to local units of government in accordance with a pre-determined formula as set forth by the Road Commission for Oakland County. 3.) On an annual basis, the Road Commission for Oakland County shall provide a letter addressed to the Oakland County Board of Commissioners General Government Committee. This letter shall contain a schedule containing the following information: 3.1. Each local unit of government that has agreed to participate in the Tr-Party Program, the level of appropriated funding allocated to each local unit of government in accordance with the pre-determined formula set forth by the Road Commission for Oakland County, and a break-down of projects selected by each local unit of government that this allocation is to fund. Maintenance 4.) Oakland County appropriations to the Tr-Party Program shall be maintained in a newly established special revenue fund created for the County's 1/3 contribution of Tr-Party Program funding. Annually, there shall be one fund transfer for the total amount appropriated, as previously approved through miscellaneous resolution as part of the annual budget process, from the County of Oakland's General Fund. Past undistributed appropriations, prior to the adoption of this policy, shall remain in the deferred revenue account established through the Road Commission's Road Improvement Fund until such time as payment for project expenditures incurred is required. 5.) For reconciliation purposes, the Road Commission for Oakland County shall maintain a schedule denoting each local unit of government agreeing to participate in the Tr-Party Program, the annual amount of appropriated funding allocated to each local unit of government, the annual amount of funding distributed to each local unit of government in accordance with cost participation agreements entered into between that local unit of government and the Road Commission for Oakland County, and the remaining balance of unused aggregate appropriations allocated from all program funding years. 6.) Annually, the Road Commission for Oakland County shall report to the Oakland County Board of Commissioners the status of Tr-Party Program appropriated funding apportioned to each local unit of government, which includes disbursements in accordance with cost participation agreements as well as undistributed funds. This annual report may be submitted at the same time conditions set forth in 3.) above are satisfied. Disbursement 7.) In order to secure Tr-Party Program funding to pay for project expenditures, the local unit of government shall enter into a cost participation agreement (pre-project authorization) in accordance with policies and procedures, as set forth by the Road Commission for Oakland County, and approved through adopted resolution by the Page 2 f Attachment "A" Tr-Party Program Policy and Procedures Road Commission Board. Minimally, cost participation agreements shall include responsibility for administering the project, the project location, purpose, scope, estimated costs including any supporting detail reviewed and approved by Road Commission personnel, as well as disbursement eligibility requirements. These cost participation agreements shall also require the maintenance of supporting documentation as outlined in 16.) below and a right to audit clause as outlined in 17.) below. 8.) In an effort to keep Oakland County Commissioners informed of the benefits local units of government they represent derive from Tr- Party Program funding, prior to approval, the Road Commission shall forward a copy of the proposed cost participation agreement to the Oakland County Commissioner representing the local unit of government named in the agreement along with a copy of the Road Commission Board agenda to afford that Commissioner the opportunity to attend the Board meeting, if desired. 9.) Upon approval of the cost participation agreement by the Road Commission Board, Tr-Party Program funding shall be distributed in accordance with the terms and conditions set forth in the cost participation agreement between the Road Commission for Oakland County and that local unit of government. 10.) The Road Commission shall invoice the County of Oakland for the County's proportionate share of funding in accordance with the terms and conditions set forth in 3.) above. An invoice for a lump sum amount may be presented at the same time if all of the conditions set forth in 3.) above are satisfied. So as not to prohibit the program's continued operation, the Road Commission for Oakland County may, in the alternative, invoice the County of Oakland in phases as local units of government submit required documentation as outlined in 3.) above. 11.) The Oakland County Department of Management and Budget Fiscal Services Division shall process payments in accordance with policies and procedures as set forth by the Department of Management and Budget and the Oakland County Treasurer. General 12.) The Road Commission for Oakland County may provide advance funding for Tr-Party Program projects. This advance funding shall be at the discretion of the Road Commission for Oakland County. Tr-Party Program appropriations may be used to re-pay the advance, but shall not be utilized to initially fund any portion of these advances. The Road Commission for Oakland County and the local unit of government receiving the advance assumes any and all responsibility with any advances granted in the event that future Tr-party appropriations are reduced. 13.) All undistributed Tr-Party Program funding apportioned to a particular local unit of government shall be carried forward into the following fiscal year and shall remain available to that particular local unit of government to reimburse for project expenditures under the terms set forth in this resolution. 14.) The Road Commission for Oakland County shall calculate interest on the County's 1/3 share of any undistributed funds maintained in the Road Commission's deferred revenue line item. This interest shall Page 3 t• Attachment "A° Tr-Party Program Policy and Procedures be utilized to offset any future budgeted appropriations approved by the Oakland County Board of Commissioners. In the event that funding for the Tri-Party Program is not appropriated through the County of Oakland's annual budget process, the Road Commission for Oakland County shall transfer any accumulated interest earned to the County of Oakland. The interest earned on the County of Oakland's 1/3 share of any undistributed funds shall be recorded as interest income through the County General Fund. 15.) In the event a local unit of government chooses to opt-out from participating in the Tr-Party Program, any previously undistributed allocated funding shall be re-allocated to all participating local units of government in accordance with the pre-determined formula set forth by the Road Commission for Oakland County. For reconciliation and reporting purposes, the Road Commission for Oakland County shall notify the Oakland County Board of Commissioners of any such re-allocations as part of satisfying the conditions in 3.) above. 16.) Any and all supporting documentation for project expenditures reimbursed by Tr-Party Program appropriated funding shall be maintained a minimum of seven years from the date of final reimbursement for actual expenditures incurred. 17.) The Oakland County Auditing Division reserves the right to audit any and all project expenditures reimbursed through the Tr-Party Program. Page 4 4, REPORT (MISC. #03237) BY: Audit Subcommittee, Chuck Moss, Chairperson IN RE: TRI -PARTY FUNDING POLICIES AND PROCEDURES To: Finance Committee, Chuck Moss, Chairman Chairperson, Ladies and Gentlemen: July 23, 2003 The Audit Subcommittee, having completed its review of the Tr-Party Funding Agreement on July 23, 2003, reports with the recommendation that the attached suggested resolution and policies and procedures be adopted. Chairpersons, on behalf of the Audit Subcommittee, I move acceptance of the foregoing report. AUDIT SUBCOMMITTEE Motion carried on a voice vote. If you have any further questions concerning this se feel to contact me at (248) 858-0997. Very /fames L. Iftzpatrick Manager •ai / lirOAIGAND____ ._ ....._. ....... COUNTY MICHIGAN DEPARTMENT OF PERSONNEL FINAL REPORT L. BROOKS PATTERSON, OAKLAND COUNTY EXECUTIVE Judith Eaton, Director ME11111n11•111.. July 31, 2003 Chuck Moss, Chairperson Oakland County Board of Commissioners Audit Committee 1200 North Telegraph Road Pontiac, Michigan 48341 Subject: Tri-Party Agreement Dear Commissioner Moss: Pursuant to a directive from the Oakland County Board of Commissioners Audit Committee, the Auditing Division has conducted a review of the "Tr-Party Agreement," (hereinafter referred to as Program) for fiscal years 2000, 2001, and 2002. With anticipated budget constraints due to the loss of revenues for fiscal year 2003, the Audit Committee requested that Program expenditures be reviewed as they relate to the County's past appropriations to determine the guidelines for which projects covered wider this Program are identified, reviewed, approved, and funded. Attached is the final report addressed to Brent 0. Bair, Managing Director of the Road Commission for Oakland County describing the scope and procedures performed during the review. Included as part of the report is a flowchart and written narrative that was cooperatively developed to document institutional knowledge of the existing processes associated with the determination, collection, maintenance, allocation, and disbursement of Program funding as well as project identification and selection. These documents may also serve in the future as a tool to be utilized between the County, RCOC, and local units of government to better communicate the intent of the Program. The flowchart and narrative is provided in Appendices "A" and "B" of this report, respectively. Additionally, a Program outline was developed to describe the current practices of certain aspects of the Program from which a summary of considerations was derived for both the County and RCOC Boards. The summary of considerations is presented in Appendix "C" and the Program outline is presented in Appendix "D" of the report. Finally, Appendices "E" and "F" are the miscellaneous resolution and policy/procedure that have been drafted for formal presentation to the Board. These appendices have been drafted to: 1) better describe the program scope and guidelines as they exist today, and 2) provide guidance in the future administration of the program. JLF/tam EXECUTIVE OFFICE BUILDING 34 EAST • 1200 N TELEGRAPH RD DEPT 440 • PONTIAC MI 48341-0440 • (248) 858-0530 • FAX (248) 858-1511 FINAL REPORT L. BROOKS PATTERSON, OAKLAND COUNTY EXECUTIVE COUNTY MICHIGAN DEPARTMENT OF PERSONNEL Judith Eaton, Director July 31, 2003 Brent 0. Bair, Managing Director Road Commission for Oakland County 31001 Lahser Road Beverly Hills, Michigan 48025 Subject: Tr-Party Agreement Dear Mr. Bair: Pursuant to a directive from the Oakland County Board of Commissioners Audit Committee, the Auditing Division conducted a review of the "Tri-Party Agreement," (hereinafter referred to as Program) for fiscal years 2000, 2001, and 2002. With anticipated budget constraints due to the loss of revenues for fiscal year 2003, the Audit Committee requested that program expenditures be reviewed as they relate to the County's past appropriations to determine the guidelines for which projects covered under this program are identified, reviewed, approved, and funded. The scope of this review consisted of: • Reviewing Commission Board and participating community policies and procedures pertaining to the Program, as applicable; • Reviewing minutes/resolutions of appropriate legislative boards/councils to determine project need, applicability to program guidelines, approval, and funding requirements; • Interviews with key personnel associated with supervising the Program; • Reviewing policies and procedures associated with the determination, collection, maintenance, allocation, and disbursement of Program funding; • Performing a limited review of budgeted and actual Program project expenditures; and • Project site visits, as deemed necessary. As a result, a flowchart and written narrative was cooperatively developed to document institutional knowledge of the existing processes associated with the determination, collection, maintenance, allocation, and disbursement of Program funding as well as project identification and selection. These documents may also serve in the future as a tool to be utilized between the County, RCOC, and local units of government to better communicate the intent of the Program. The flowchart and narrative is provided in Appendices "A" and "B" of this report, respectively. Additionally, a Program outline was developed to describe the current practices of certain aspects of the Program from which a summary of considerations was derived for both the County and RCOC Boards. The summary of considerations is presented in Appendix "C" and the Program outline is presented in Appendix "D." Finally, Appendices "E" and "F" are the miscellaneous resolution and policy/procedure that have been drafted for formal presentation to the Board. These appendices have been drafted to: 1) better describe the program scope and guidelines as they exist today, and 2) provide guidance in the future administration of the program. EXECUTIVE OFFICE BUILDING 34 EAST • 1200 N TELEGRAPH RD DEPT 440 • PONTIAC MI 48341-0440 • (248) 858-0530 • FAX (248) 858-1511 Very FINAL REPORT I would like to take a moment to thank you and your staff for their time and effort put forth in accomplishment of this review. If you have any quepC42494e contact me at (248) 858-0997. JLF/tam ri. ..... mamesgLe; F a 'ck t. ROAD COMMISSION FOR OAKLAND COUNTY Project Funding Process (Oakland County) As of June 1,2003 Funding established for the current year of the program during Oakland County Board of Commissioners annual , budget meeting / IL Allocations and selected prolects are placed on County agenda for review and approval ----- ------'Does Oakland County Board of Commissioners General Government Yes 1 Committee Approy3. 1 E back to lRisCOCt C appropriate funds ) County deposits Client Prepared by Date Pima Pisacreta- Oakland Road Commission for 1 Oakland County County Auditing 10f22/02 Division Process Accepted by Date Funding and Project Development Road Commission for 00/01/03 Procedures Oakland County Purpose: Cooperatively developed between the Oakland County Auditing Division and the Road Commission for Oakland County to document institutional knowledge of the existing process associated with the determination, collection, maintenance, allocation, and disbursement of Tri-Party Program funding as well as project identification and selection. No Appendix "A" 1 Proposal is sent back to Programming Division Copy sent to RCOC Finance Department Yes Managing Director recommends report be placed on the RCOC Board agenda for review and approval Original sent to Oakland County Board Finance Department enters community allocations into a database 7 ROAD COMMISSION FOR OAKLAND COUNTY ' Project Funding Process (Road Commission) As of June 1, 2003 RCOC determines the allocations to the communities / RCOC sends letters to the communities indicating their Tr-Party allocation and potential projects Communities show financial commitment to the program through authority of their governing body Communities select eligible project(s) they wish to pursue Community sends acknowledgment to the Programming Division of RCOC Programming Division estimates selected project(s) cost Programming Division generates a report with a listing of allocations and selected project(s) by community - Finance Department senc-l's invoice to Oakland County) 2 Appendix "A" 1,46 Citizen Service Reports Local District Community Meetings Road Commission Board Meeting Project Selection by Community internal Request by Road Commission Department Strategic Planning Meeting Petitions ROAD COMMISSION FOR OAKLAND COUNTY As of June 1,2003 Project Identification Appendix "A" ire.44 3 Requests are given to the Programming Division to review and evaluate No ) File under no action planned IRoAD ,COMMISSION FOR OAKLAND COUNTY Project Development Process As of June 1, 2003 ?West" t -One hundred percent of Tr-Party dollars can be used for graveling, safety purposes, drainage, road reconstruction or resurfacing. -Zero dollars from the Td-Party allocation can be used for maintenance. Yes Criteria for FundInn; -Of the total Tr-Party Program money, half is given to townships while the other half Is divided among the cities and villages. -The amount of money each community Is allotted for projects is based on miles of county roads and number of accidents on county roads for cities and villages: while for townships Its based on population, miles of county roads and number of accidents on county roads. -Communities can use Trl-Party funds as their local match for larger, federally funded projects. For most federally funded projects, 80 percent of the money comes from federal and state funds, 10 percent from RCOC and 10 percent from the community. As part of the program, communities can pay their 10 percent with Trl- Party funds. 4 Appendix "A" IS community interested in any potential projects? Yes Acknowledgment by the community Is sent to the Programming Division committing them to the program participating cOMmunitieS the opt out communities to t 4 fr 4—oney Is redistributed from i'\ Appendix "A" 5 , ROAD COMMISSION FOR OAKLAND COUNTY Project Development Process (continued) As of June 1, 2003 1)2 Project is placed on the community's "Annual Potential Project Locations list Programming Division generates letter to municipality Community reviews letter LaliarS_Quialm -Formula for Allocating Funds - -Annual Dollar Amount Allocated -Let of General Project Costs -Ust of Potential Project Sites Programming Division contacts Community by phone inquiring about their project interest Programming estimates the project cost and they are shared with the community Yes ) Community selects another project 'Yes V Programming and the community must determine who will administer the project Programming completes project Initiation form Cost Participation Agreement between RCOC and community is established Agreement is placed on agenda for review and approval ESIMELWX91.12fill -If project is federally funded -Current worldoad of the Road Commission -Community s promptness for the project completion Community can save Tr-Party funding ('Accumulate funds until amount is sufficient to complete project Community can use advanced funding within reason and at the discretion of the RCOC from the RCOC general fund Project Cost Agreements address oast sharing requirements In the event the Tit-Party Program should be discontinued Community assesses sources of funding / Proposal is sent back to Programming Division Yes Appendix "A" ROAD COMMISSION FOR OAKLAND COUNTY Project Development Process (continued) As of June1 1 2003 Copy of agenda is sent to County Board of Commissioners Preliminary Engineering is conducted V Finance Department of RCOC sends partial invoice to the community based on the amount described in the agreement V (Community funds placed into a deferred revenue line item) Community hires approved engineer to design and acquire right of way Yes is Preliminanj Engineering work assigned to a OBS consultant? V Upon completion \ design phase, the community submits the project plan to the RCOC Permit Department V FTCOC currently has four consulting firms they primarily assign projects to 1 V Revisions are made on theN project to the satisfaction of RCOC —.-') Yes RCOC advertises construction of the roadwork for the project to be bid on Acquisition for right of way occurs near the end of the design phase A disbursement listing is given to the RCOC Board for approval RCOC Construction Division conducts daily inspection of project Biweekly the Construction Division submits billing to RCOC Finance Department Finance Department balances the deferred revenue line item Yes RCOC awards bid to the responsible/ lowest bidder Correct proportion of funding is disbursed from the Road Improvement Fund to the vendor Community invoices RCOC for fifty percent of Oakland County's and RCOC's share of the project funding Community conducts full time Inspection of Protect RCOC conducts Permit Inspection of project V Yes Community conducts bid letting Contractor builds Project Community awards bid to the responsible/ lowest bidder Bid proposals from contractors are received RCOC conducts bid letting C.Ipon completion of project) community invoices RCOC for remaining funding C Refer back to staff Upon project completion, final/actual cost of the project is calculated, Including Preliminary Engineering and Construction Engineering RCOC invoices community for remaining share of project Road Improvement Fund funding to replenish the — li.Appendix "A" 1 ROAD COMMISSION FOR OAKLAND CbUNTY ' Project Development Process (continued) As of June 1,2003 As of June 1, 2003 Appendix "B" Tr-Party Program Funding Procedures The Tri-Party Program is a cooperative effort between the following three groups: The County of Oakland, the Road Commission for Oakland County (RCOC), and local municipalities. Each year, the total program funding is determined when the Oakland County Board of Commissioners budgets an amount it wishes to allocate to the program. This represents one-third of the program funding set for that current year. RCOC and the participating communities match this amount, representing their one- third shares for the year. Each year, program funding is divided equally between cities/villages and townships with a fifty-percent share going to each category. Allocation for each community is based upon a predetermined formula. For cities and villages, this allocation of funding is based on miles of county roads in the cities and villages and the number of accidents on those county roads. For townships, it is based on township population as well as miles of county roads and the number of accidents on those roads. Each year, the RCOC budgets for the Tr-Party Program to include the design phase of new projects and the construction phase of the prior year's designed projects. RCOC does not charge administrative overhead costs to any of the program's projects. These costs are absorbed and contributed by RCOC in addition to its one-third share. The administrative costs for the smaller Tr-Party projects can be a significantly higher percentage of construction costs than for the larger, non-Tr-Party projects. This is because more effort is required for many small projects as opposed to a few large projects. The County of Oakland and RCOC commit their portions of the funding prior to the project inception. The county provides its full, one-third payment based upon an invoice presented by RCOC. The one-third share from RCOC is appropriated through its annual Road Improvement Program as part of the annual budget process. Each community commits its share when each board or council approves the annual allocation as calculated by the formula. Once the annual funding is established, RCOC sends a letter to each of the participating communities indicating the formula used to determine the allocation of funding and the amount of money allocated to that community to spend on its choice of road improvements for the current year. Additionally, the letter contains estimated costs for typical projects and suggestions for potential projects that have been identified by RCOC, citizens' requests, and the community. The full amount of Tr-Party Program dollars can be used on capital improvement projects such as graveling, safety improvements, drainage, road construction, or resurfacing. However, no money from the Tr-Party allocation can be used for maintenance activity purposes. Communities can also use Tr-Party Program funding as their local match for larger, federally funded road projects. For most federally funded projects, eighty percent of the money comes from federal and state funds, ten percent 0.11 2 As of June 1, 2003 Appendix "B" from RCOC, and ten percent from the community. As part of the program, communities may chose to pay part or their entire ten percent share with Tr-Party funds, effectively reducing the community's share to three and one-third percent. Participating communities commit to the program by sending an acknowledgement letter and resolution to RCOC's Programming Division. A community may also "opt-out" and not participate in the program. If this occurs, the funding previously allocated to this community is redistributed to all the participating communities based upon the predetermined formula described earlier. When the community selects a project, RCOC's Programming Division estimates all costs associated with the project(s) selected by the communities. An annual Tr-Party Program report is prepared for presentation to the Oakland County and RCOC Boards of Commissioners, where it is placed on their respective agendas for review and approval. A copy of the program is also sent to RCOC's Finance Department, where the community allocations are entered into a database for reconciliation purposes. Upon approval by the Oakland County General Government Committee, RCOC invoices and is paid by the County of Oakland for their portion of the approved funding. This payment is deposited and commingled with all other RCOC cash and is managed by the Oakland County Treasurer's Office on behalf of RCOC. Interest income earned on funds invested in RCOC cash accounts is recorded as RCOC income. This would include the interest earned on unspent Oakland County funds while commingled in RCOC cash accounts. Upon receipt of Oakland County's payment, RCOC records the amount in a deferred revenue ledger account. As RCOC expends funds on the Tr-Party Program's projects, a corresponding portion of that deferred revenue is then reclassified as "recognized" revenue for that fiscal year. As reflected in the RCOC budget process, a project typically is designed in one year and then constructed in the next year, hence, the accounting treatment of deferred revenue. Tr -Party Program Project Development Procedures The identification of a project can arise through several means, which include RCOC Department of Citizen Service Reports, local district community meetings, petitions, the Road Commission board meeting, internal RCOC departmental requests, ongoing community liaison conversations with the Programming Division, and strategic planning meetings. Local district community meetings occur twice a year. Strategic planning meetings occur every two years. The Road Commission board meetings occur twice a month while citizen service reports and petitions can occur on a daily basis. internal project requests are typically made directly to the Programming Division by the department directors of Highway Maintenance, Traffic Safety or Permits on an as needed basis. : As of June 1, 2003 Appendix "B" The Programming Division maintains a close ongoing relationship with the communities to help them evaluate and prioritize their road improvement needs. The Road Commission suggests project ideas to the community with an emphasis on public safety. Once a community has agreed to proceed with their project selection, Programming typically generates a conceptual design of the project. This allows the community to better determine whether adequate funding is available through the Tri-Party Program. If despite the feasibility of the project, it has been determined that full funding for it currently is not available, the community is given three options to meet their financial obligations. The first being the ability to advance construct from future allocations appropriated to that community through the Tr-Party Program within reason and at the discretion of the RCOC. This (advanced) funding comes from the RCOC Road Improvement Fund. The second option allows the community to save their Tr-Party allocated funding until enough is accumulated to cover the cost of the project. RCOC allows the communities as much time as necessary to accrue this funding. The third option allows the community to fully fund that portion of the project costs not covered by the Tr-Party allocated funding. If the funding is sufficient enough to cover the cost of the project, RCOC decides whether or not to administer it or allow the community to do the administration. The decision of whether or not to administer the project is based upon RCOC's current workload and the community's desired time frame for the project completion. However, when the project is federally funded, RCOC will always administer the project. When it is determined who will administer the project, a project initiation form is generated by the RCOC Programming Division. This establishes the assignment of a project number and provides a detailed description of the project along with the total estimated cost and sources of project funding. Once a project is initiated, the Programming Division drafts a cost participation agreement between RCOC and the community. If RCOC administers the project, the Finance Department invoices the community before construction begins. When received, these funds are placed into a deferred revenue line item separately identified for that community. Funding for the project is maintained in this line item until such time as expenditures are incurred. Other deferred revenues (Non Tr-Party) from each separately identified community may be maintained in this line item as well. Once the community signs the agreement, the preliminary engineering or design phase of the project commences and any needed right of way is acquired. Again, based on the current workload of RCOC, an outside consultant may be contracted to conduct the preliminary engineering portion of the project and obtain a right of way or the RCOC Design Division may perform it in house. Prospective outside consulting firms are put 3 As of June 1, 2003 Appendix "B" through a quality based selection process with pre-determined evaluation criterion. Four main consulting firms are currently used by RCOC. Assignments are based upon the current workload of the consultant. Typically, at least fifty percent of the projects administered by RCOC are assigned to a consultant. After the project specifications are determined, the RCOC Design Division publicly advertises construction of the roadwork for the project. Interested contractors submit sealed bid proposals to the RCOC Clerk of the Board, who opens them publicly at the advertised time and place. A review of all bids is then conducted by the Design Engineer, who makes a bid recommendation to the RCOC Board. The contract is awarded to the lowest responsible bidder. On a daily basis, throughout the construction phase of the project, the RCOC Construction Division monitors the progress and oversees the construction engineering i.e. quality control inspection of the contractor's materials and workmanship. The submission of a biweekly pay estimate by the Construction Division also takes place throughout the construction phase. At month end, this biweekly pay estimate is organized into a disbursement listing and provided to the RCOC Board for approval. Upon approval, the appropriate amount of funding is disbursed from the Road Improvement Fund to the contractor. Upon completion of the project, a final cost is calculated. The Tr-Party program has a cap on the amount of funding allowed for preliminary and construction engineering costs. The agreement stipulates that Tr-Party Program funding for engineering will not -exceed more than twenty to twenty five percent of the actual final construction cost. Typically, eight to ten percent is designated for the preliminary engineering phase while twelve to fifteen percent is for construction engineering. The RCOC Finance Department invoices the County and the community to reimburse the RCOC Road Improvement Fund for outstanding project costs which may include preliminary and construction engineering. When the community decides to administer the project, the community invoices the RCOC for fifty percent of the project cost before construction begins. A member of the RCOC Finance Department enters the figures into a database and then disburses the County's one-third share and RCOC's one-third share from the appropriate line item. The community is responsible for appointing an approved professional engineer or engineering consultant to administer the preliminary engineering for the project and acquire any necessary right of way. Any amount greater than that stipulated in the Tr- Party agreement for the design phase is paid, in total, by the community. The engineer for the community submits a project plan to the RCOC Permit Department for approval. If the project plan is rejected by the Permit Department, the required revisions must be made to the satisfaction of RCOC. If the project is approved by the RCOC Permit Department, the community is responsible for publicly soliciting bids, reviewing bids, and awarding contracts in accordance with that community's 4 5 As of June 1, 2003 Appendix "B" procurement policies and procedures. RCOC does not oversee this process except to verify that a public bidding procedure is followed. Throughout the construction phase of the project, the RCOC Permits Department conducts permit inspections while the community, and/or its engineer, monitor the progress and manage the construction engineering on the contractor's materials to ensure proper installation. Upon project completion, the community invoices RCOC for any remaining share of project funding that is due in accordance with the agreement. • It Summary of Considerations Appendix "C" Program Scope and Guidelines • Program has expanded from graveling roads to include capital improvement projects such as safety improvements, drainage, road construction or resurfacing. Consideration • Present resolution for County Board approval to serve as an outline of the program scope and guidelines to better define and communicate the current objectives of the Program as they exist today in accordance with any applicable state laws. This is to include, but is not limited to, the establishment of annual program funding as well as the procedures for maintaining and disbursing said annual funding. Program/Project Funding • Currently, correspondence received from RCOC requesting formal commitment from the County to participate in the Program is distributed to the County Board's General Government Committee for review and approval. Consideration • Distribute correspondence received from RCOC to all County Commissioners prior to formal commitment to improve communication and show the benefits that communities they represent receive by agreeing to participate in the program, i.e. amounts allocated, anticipated use, etc. • Currently, the County's appropriated 1/3 share commitment is paid up front and is maintained by RCOC in a deferred revenue account through their Road Improvement Fund until such time as expenditures are incurred. Interest earned on the balance in this account during this period of time falls to RCOC's Road Improvement Fund for general use. It does not constitute a portion of the Program funding. The balance in this account as of September 30, 2002 amounted to approximately $4.45 million. •- Participating communities are not required to pay any portion of committed amounts up front until the project cost participation agreement is entered into between the parties. • There is no maximum length of time established to allow local units of government to accumulate allocated Program dollars toward identified or unidentified future projects. Review of documentation indicates that approximately 80% of the $4.45 million County balance maintained by RCOC has been reserved by local units of government for projects under this category. Consideration • Establish a maximum length of time allowing communities to accumulate appropriated allocations. A similar example is addressed in County Board miscellaneous resolution #99093 adopted May 13, 1999 describing the Environmental Infrastructure model which limits the length of time to save non-disbursed appropriated allocations to five years. And, — • Establish an account to maintain that portion of the funding that the County appropriates to the Program and capture the interest earned for general use by the County. This option will require additional accounting by the County's Department of Management and Budget's Fiscal Services Division personnel as well as RCOC Finance Division personnel. RCOC/Local units of government will invoice the County in accordance with the terms set forth in cost participation agreements approved by the RCOC Board. This is consistent with RCOC's practice of maintaining and disbursing RCOC appropriated funding. • In the past, local units of government have been allowed to borrow against future unknown allocations to fund projects initiated in the current year. This borrowed funding has been obtained through RCOCs Road Improvement Fund under the assumption that the County, RCOC, and the local units of government will be budgeting and appropriating future Program funding which in-turn could be utilized to reimburse the Road Improvement Fund for amounts borrowed. 0#1‘ Summary of Considerations Appendix "C" Consideration • Honor commitments for advances already provided, but discontinue the future practice of allowing local units of government to borrow against the assumption that future Program funding will be appropriated and allocated in unknown amounts. Program Participation • Currently, there is no requirement of the local units of government to forward resolutions/board minutes denoting a formal commitment to participate in the program and the appropriation of their 1/3 share of funding. Additionally, local units of government are not monitored to determine whether they are appropriating their proportionate 1/3 share commitment annually. Consideration • Require the presentation of a formal commitment from local units of government in the form of resolutions/board minutes approving participation in the Program including the amount to be appropriated in satisfaction of their 1/3 share of Program funding. Project Initiation and Cost Participation Agreements • No formal participation from Oakland County's Board of Commissioners in the review and authorization of project cost participation agreements to ensure compliance with program guidelines. Consideration • When project cost participation agreements are scheduled for review and approval by the RCOC Board, forward RCOC Board agenda to County Commissioner represented by that community for informational purposes and provide the County Commissioner with an opportunity to attend and voice his/her opinion. ell Appendix "D" TRI-PARTY PROGRAM AT MAY 31, 2003 Description of Program The Tr-Party Agreement (hereinafter referred to as Program) is a cooperative effort between the County of Oakland, the Road Commission for Oakland County (RCOC), and local municipalities. Created in the mid-1970s, the Program gives cities, villages, and townships that do not have jurisdiction over their roads, money to spend on improvements and repairs. Once funding is established, equal shares from the three groups is combined giving these local units of government the capacity to pursue projects, normally deemed a financial impossibility, to succession. Program Scope The Program is not intended for maintenance, but rather is to be used for capital improvements. Qualifying projects for Program funding are those which improve County roads and streets under the jurisdiction of the Road Commission for Oakland County. At the Program's inception, funding appropriated was allocated toward traffic safety and graveling due to record breaking severe weather conditions which was expected to cause spring break-ups requiring road improvements that might have otherwise gone unattended. Today, examples of acceptable improvements, though not an inclusive list, have evolved into paving, lane additions or lengthening, bridges, and drainage as they relate to road safety, structure, or relieving congestion. This could also include fulfilling a local governmental unit's obligation of matched funding for federally funded road projects. Program/Project Funding Currently, the total annual Program funding is determined when the Oakland County Board of Commissioners (hereinafter referred to as County) appropriates an amount to fund the Program through the budget process. This represents one-third of the Program funding set for the upcoming year. RCOC and the participating communities match this amount, representing their one-third shares for the year. When the Program was first created, the County appropriated $500,000 with the understanding that RCOC and the local units of government would match this amount. More recent County annual appropriations have been $1.25 million, $1.25 million, and $2.25 million for Fiscal years 2000, 2001, 2002, respectively. For fiscal year 2003, the current budgeted amount is $1.5 million. The County along with RCOC commit their portion of the funding up front prior to, and independent of, project identification, selection, and inception processes. The one-third share from RCOC is appropriated through its annual Road Improvement Program as part of the annual budget process. Additionally, RCOC does not charge administrative overhead costs to any of the projects funded through the Program. These costs, deemed a percent (currently 15%) of total project costs established by RCOC, are absorbed and contributed by RCOC in addition to its one-third share. The County provides its full, one-third payment based upon an invoice presented by RCOC. Upon receipt, RCOC deposits the County's 1/3 share into a deferred revenue account maintained in RCOC's Road Improvement Fund until such time as the funding is transferred to reimburse RCOC's Road Improvement Fund for project expenditures approved for funding through the Program. During this holding period, the balance in this account ($4.45 million as of 2002 fiscal year-end) is invested as part of RCOC's Road Improvement Fund by the Oakland County Treasurer on behalf of RCOC. Interest earned during this holding period is recorded as income through RCOC's Road Improvement Fund. An Approximate total amount of $700,000.00 in interest has been earned for fiscal years 1999, 2000, 2001, and 2002; inclusive. Each community commits its share annually when the decision is made to participate in the Program. This commitment, however, does not require the submission of funding to RCOC prior to project inception. PAGE 1 OF 5 PAGE 2 OF 5 Appendix "D" TRI-PARTY PROGRAM AT MAY 31, 2003 Additionally, there is no monitoring performed to ensure that the community is appropriating their 1/3 share for the purposes of funding the Program. At project inception (when an agreement is signed between the community and RCOC), the community is required to pay 50% of the estimated project expenditures up front if the project will be administered by RCOC. This amount is maintained in a fashion similar to the County's 1/3 share of Program funding until such time as expenditures have been incurred and a reimbursement is required. The remaining 50% payment is due upon final accounting of project expenditures at the completion of the project. If the community chooses to administer the project, payment of the County's and RCOC's 1/3 share is in accordance with the terms of the agreement. Typically, 50% of the estimated project costs (minus the community's 1/3 portion of these costs) will be paid to the community prior to the commencement of work upon receipt of an invoice generated by the community. Any subsequent payments to the community are again in accordance with the agreement and based upon actual expenditures incurred to date with supporting documentation showing a percentage of completion. If the community pursues a project where it has been determined that full funding is not available through the Program, the community is given three options to meet their financial obligations. The community may choose to fully fund that portion of the project costs that exceed allocations distributed for use by that community. Or, in the alternative, the community has been granted the latitude to borrow funds from anticipated future appropriations allocated to them through the Program. This (borrowed) funding is provided through the RCOC Road Improvement Fund until such time as anticipated future appropriations and allocations are distributed which are then transferred to the RCOC Road Improvement Fund for the purposes of reimbursement. Currently, the practice of committing future Program funding is limited to three years. The third alternative allows the community to save that portion of Program funding allocated and distributed until enough is accumulated to cover the cost of the project. This practice has been beneficial __in the past for those communities where small dollar amounts of Program funding has been allocated. In the past, RCOC has allowed the communities as much time as necessary to accrue this funding. Additionally, communities have been granted the latitude to accrue Program funding from one year to the next for "future projects' where a project has yet to be identified. As of September 30, 2002, communities have chosen to designate approximately $1.7 million of the $4.45 million balance in the deferred revenue account holding the County's 1/3 share of Program funding toward "future projects." Another approximate $2.1 million of this balance has projects described in correspondence, however, there is no signed agreement in place signifying project initiation. There is approximately $800,000.00 where projects have been described with a signed agreement in place. Allocation of Funding Each year, Program funding is divided equally between cities/villages and townships with a fifty-percent share going to each category. Allocation for each community is based upon a predetermined formula. For cities and villages, this allocation of funding is based on miles of County roads in the cities and villages and the number of accidents on those County roads. For townships, it is based on township population as well as miles of County roads and the number of accidents on those roads. Program Participation Annually, RCOC sends written correspondence to each community requesting a response as to whether or not the community wishes to participate in the Program. This correspondence contains the amount of Program funding to be allocated, based upon the pre-determined formula, to the community for that year. Appendix "D" TRI-PARTY PROGRAM AT MAY 31, 2003 Also included in this correspondence is a list of potential projects for each community to consider. This list is compiled by RCOC previously identified through several sources. This correspondence will also list estimated costs for typical projects that would qualify for funding through the Program. A community's decision to participate in the Program is communicated through written correspondence back to RCOC. This correspondence may also include how the community would like their allocation of funding designated, i.e. funding toward specific projects previously identified or to reserve funding toward an unidentified "future project." There was evidence present to suggest that communities are obtaining formal authorization through their respective governing bodies to participate in the Program. However, currently there is no requirement of the communities to forward resolutions/board minutes from their respective governing bodies denoting a formal commitment to participating in the program which would include the appropriation of their 1/3 share of Program funding. Project Identification Program funded projects are identified through seven sources, all of which may include community participation. These sources of project identification are: RCOC Department of Citizen service reports, local community meetings, petitions, the RCOC Board meetings, internal RCOC departmental requests, ongoing liaison conversations between the community and the RCOC Programming Division, and strategic planning meetings between the community and RCOC. Project initiation and Cost Participation Agreements Projects are initiated via the completion of a project initiation form generated by the RCOC Programming Division. The completion of this form establishes the assignment of a project number and provides a detailed description of the project along with the total estimated cost and sources of project funding. .Once a project is initiated, the Programming Division drafts a cost participation agreement on behalf of RCOC and the community. This agreement between the parties describes the project to be undertaken, the estimated project costs, the extent of approved Program funding allocated toward the project, as well as terms and conditions outlining the duties and responsibilities of each party. All agreements entered into between the parties' flow through a rigorous approval process between RCOC and the community. Final approval of the RCOC Board is required prior to any work being performed. The County, in the past, has not been notified or included as part of the agreement approval process. Project Engineering Costs The RCOC Design Division will commence with the preliminary engineering or design stage of the project and will acquire any needed right of way once the community signs the agreement. This function may be performed in-house by RCOC engineering staff, or by consultants contracted to performed professional services for RCOC. The community or a contracted consultant would provide this function in those instances where the community chooses to accept responsibility for this function. Construction engineering is considered part of project administration in accordance with the signed agreement. If RCOC administers the project, RCOC engineering staff are responsible for construction engineering. If the community chooses to administer the project, the community is responsible for performing this function or contracting with a consultant to perform this function on their behalf with monitoring performed by RCOC staff. RCOC caps the amount of Program funding (typically 20% - 25% of total actual project costs) that can be utilized toward preliminary and construction engineering costs. Amounts exceeding this cap are borne, in total, by the community. Typically, 8% is designated for the preliminary engineering phase while 12% is PAGE 3 OF 5 PAGE 4 OF 5 6 • • • Appendix "D" TRI-PARTY PROGRAM AT MAY 31, 2003 for construction engineering. RCOC may allow an additional 5% in those cases where the community chooses to administer a project utilizing the resources of the professional consultant. Project Construction Costs When RCOC administers the project, the RCOC Design Division publicly advertises the project. Interested contractors submit sealed bid proposals to the RCOC Clerk of the Board, who opens them publicly at an advertised time and place. The RCOC design engineer, who makes a bid recommendation to the RCOC Board, then conducts a review of all bids. The contract is awarded to the lowest qualified bidder. When the community administers the project, it is the community's responsibility to assign one of their professional engineers or contract with an engineering consultant to administer the project from inception to completion. How expenditures are tracked is dependent on which party administers the project in accordance with the signed cost participation agreement. When RCOC is administering a project, RCOC tracks the expenditures throughout the construction phase of the project. The RCOC Construction Division conducts daily cost estimates to monitor the progress and oversee the construction engineering or inspection of the contractor's materials for proper workmanship. The submission of a biweekly pay estimate by the Construction Division to the Finance Division of RCOC is reconciled to the allocations of the community. Expenditures for a project are tracked through automated processes, which include RCOC's new project management software system. When the community is administering a project, the community tracks the expenditures throughout the construction phase of the project. The RCOC Permits Department conducts permit inspections on an as --needed basis while the community and/or its contracted engineer, on a daily basis, monitors the progress and manages the construction engineering on the contractor's materials to ensure proper installation. Payments to Vendors For RCOC administered projects, payments are made to vendors on a biweekly basis through the RCOC Road Improvement Fund and are approved by the RCOC Board. Typically, payments to the contractor are based on the amount of materials used (percent of completion). For community administered projects, the community is responsible for vendor payments for work performed in accordance with terms and conditions set forth in their agreements. Transfers of Funding/Invoicing When RCOC is administering the project, the RCOC Finance Department invoices the community before construction begins in accordance with the cost participation agreement between the parties. When received, these funds (typically 50% of estimated project costs) are placed into a deferred revenue account separately identified for that community. The funding for the project is maintained in this account until such time as expenditures are incurred. For RCOC administered projects, all expenditures are paid through the RCOC Road Improvement Fund. As RCOC incurs expenditures on Program funded projects, a corresponding portion of previously deferred revenue is reclassified as "recognized" revenue to reimburse the Road Improvement Fund for the County's and the community's 1/3 share of Program project expenditures paid on the project. When the community is administering the project, the community invoices RCOC (typically 50% of estimated project costs) before construction begins in accordance with the project cost participation • • PAGE 5 OF 5 4 • • Appendix "D" TR1-PARTY PROGRAM AT MAY 31, 2003 agreement. RCOC Finance Division staff enters the figures into a database and then disburses the County's one-third share as well as RCOC's one-third share from the appropriate line item. The community's 1/3 share is maintained by the community. Upon the project completion, the community invoices RCOC for any remaining shares of project funding that is due in accordance with the project cost participation agreement. Appendix "E" MISCELLANEOUS RESOLUTION #03xxx BY: FINANCE COMMITTEE, (SPONSOR) IN RE: TRI-PARTY PROGRAM FUNDING, MAINTENANCE, AND DISBURSEMENT POLICY TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Chairperson, Ladies and Gentlemen: WHEREAS, the Oakland County Board of Commissioners Audit Subcommittee requested the Oakland County Auditing Division to review the Tr-Party Program and make recommendations regarding the Program scope and guidelines; and WHEREAS, the Oakland County Auditing Division has conducted the requested review and has determined a need to update the Tr-Party Program scope and guidelines to better represent the Program as it exists today; and WHEREAS, the Oakland County Board of Commissioners is permitted to, in accordance with Public Act 253 of 1917, MCL 247.121, appropriate funding from the General Fund to the Road Fund provided that there is a surplus in the General Fund and that the monies are used for construction, maintenance, and repair of highways under the supervision and direction of the Board of County Road Commissioners; and WHEREAS, the Oakland County Board of Commissioners adopted Miscellaneous Resolution #7791 in 1977 to address road improvement needs identified by the Road Commission for Oakland County in the areas of traffic safety and graveling for local units of government that do not have jurisdiction over their roads; and WHEREAS, Miscellaneous Resolution #7791 authorized the appropriation of $250,000 which was increased to $500,000 through the adoption of Miscellaneous Resolution #7901 in 1977 citing "the responsibility of effective government to anticipate such problems before they become emergencies;" and WHEREAS, past Oakland County appropriations have been matched by the Road Commission for Oakland County and local units of government constituting a 1/3 share contribution by each party; and WHEREAS, the portion of the annual Tr-Party Program fund appropriation available upon proper application to each Oakland County local unit of government has been established by a pre-determined formula set forth by the Road Commission for Oakland County; and WHEREAS, Oakland County has experienced tremendous growth in industrial, commercial, and residential development; and WHEREAS, the population of Oakland County has increased from 910,000 in 1970 to 1.2 million in 2000; and WHEREAS, this development within Oakland County has stressed road capacities creating conditions affecting traffic safety; and WHEREAS, over time road improvements through this Program have evolved into paving, lane additions or lengthening, bridges, and drainage as they relate to road safety, structure, or relieving congestion which may include fulfilling a local governmental unit's obligation of matched funding for federally funded road projects; and WHEREAS, the County of Oakland has adopted an appropriation in the amount of $1.5 million for the 2003 fiscal year with a proposed budget amount of $1.5 million for fiscal year 2004; and WHEREAS, the Board of Commissioners wishes to establish criteria and direction for the use of future County funding appropriated to the Road Fund. NOW THEREFORE BE IT RESOLVED that the General Appropriations Act is hereby amended from "that Road Improvement Funds may be released to the Road Commission upon approval of the specific projects by the 417 PAGE 1 OF 2 Appendix "E" General Government Committee of the Board of Commissioners" to "that appropriations to the Tr-Party Program may be permitted, in accordance with Public Act 253 of 1917, MCL 247.121, in amounts to be determined on an annual basis in accordance with said Act;" and BE IT FURTHER RESOLVED that future funding appropriated by the County of Oakland shall be administered in accordance with the attached Tr-Party Program Policy and Procedures included in this resolution as Attachment "A." Chairperson, on behalf of the FINANCE COMMITTEE, I move the adoption of the foregoing resolution. FINANCE COMMITTEE PAGE 2 OF 2 Appendix "F" Attachment "A!' Tr-Party Program Policy and Procedures Policy The Oakland County Board of Commissioners is permitted to, in accordance with Public Act 253 of 1917, MCL 247.121, appropriate funding from the General Fund to the Road Fund provided that there is a surplus in the General Fund and that the monies are used for construction, maintenance, and repair of highways under the supervision and direction of the Board of County Road Commissioners. The Road Commission for Oakland County and each participating local unit of government shall match any future appropriations approved by the Oakland County Board of Commissioners constituting a 1/3 share contribution by each party. Tr-Party Program appropriation of funding decisions shall be made by the Oakland County Board of Commissioners based upon the best interests of the County and the needs of its citizens. The Oakland County Board of Commissioners expressly reserves the right to adjust the County of Oakland's 1/3 proportionate share at any time based on County budget issues. Program funding appropriated shall be utilized solely for the purposes of road improvements to roads under the jurisdiction of the Road Commission for Oakland County to include, but is not limited to, paving, lane additions or lengthening, bridges, and drainage as they -- relate to road safety, structure, or relieving congestion. This may include fulfilling a local governmental unit's obligation of matched funding for federally funded road projects on roads under the jurisdiction of the Road Commission. Project identification and selection shall be at the discretion of the Road Commission for Oakland County and each participating local unit of government utilizing methods previously adopted by the Road Commission for Oakland County in accordance with Road Commission policies and procedures. Tr-Party Program project expenditures are limited to those expenditures that the County of Oakland is authorized by MCL 247.121 to financially support and are limited to expenditures incurred in connection with road improvements as defined within this policy as adopted by resolution. Procedures for Administration The following procedures shall be implemented for the administration of the County of Oakland's 1/3 share contribution to the Tr--Party Program. Funding 1.) Funding appropriated by the County of Oakland through the Budget process shall be adopted through miscellaneous resolution on an is Pagel Appendix "F" Attachment "A" Tr-Party Program Policy and Procedures annual basis. County funding shall not be released until the County receives the annual resolution from the Road Commission outlining the Tr-Party allocations. The Road Commission shall not expend any County funds until it has the final cost participation agreements from the communities and is ready to proceed with the projects. 2.) Funding appropriated shall be allocated to local units of government in accordance with a pre-determined formula as set forth by the Road Commission for Oakland County. 3.) On an annual basis, the Road Commission for Oakland County shall provide a letter addressed to the Oakland County Board of Commissioners General Government Committee. This letter shall contain a schedule containing the following information: 3.1. Each local unit of government that has agreed to participate in the Tr-Party Program, the level of appropriated funding allocated to each local unit of government in accordance with the pre-determined formula set forth by the Road Commission for Oakland County, and a break-down of projects selected by each local unit of government that this allocation is to fund. Maintenance 4.) Oakland County appropriations to the Tr-Party Program shall be maintained in a newly established special revenue fund created for the County's 1/3 contribution of Tr-Party Program funding. Annually, there shall be one fund transfer for the total amount appropriated, as previously approved through miscellaneous resolution as part of the annual budget process, from the County of Oakland's General Fund. Past undistributed appropriations, prior to the adoption of this policy, shall remain in the deferred revenue account established through the Road Commission's Road Improvement Fund until such time as payment for project expenditures incurred is required. 5.) For reconciliation purposes, the Road Commission for Oakland County shall maintain a schedule denoting each local unit of government agreeing to participate in the Tr-Party Program, the annual amount of appropriated funding allocated to each local unit of government, the annual amount of funding distributed to each local unit of government in accordance with cost participation agreements entered into between that local unit of government and the Road Commission for Oakland County, and the remaining balance of unused aggregate appropriations allocated from all program funding years. 6.) Annually, the Road Commission for Oakland County shall report to the Oakland County Board of Commissioners the status of Tr-Party Program appropriated funding apportioned to each local unit of government, which includes disbursements in accordance with cost participation agreements as well as undistributed funds. This annual report may be submitted at the same time conditions set forth in 3.) above are satisfied. Disbursement 7.) In order to secure Tr-Party Program funding to pay for project expenditures, the local unit of government shall enter into a cost Page 2 Appendix "F" Attachment "A" Tr-Party Program Policy and Procedures participation agreement (pre-project authorization) in accordance with policies and procedures, as set forth by the Road Commission for Oakland County, and approved through adopted resolution by the Road Commission Board. Minimally, cost participation agreements shall include responsibility for administering the project, the project location, purpose, scope, estimated costs including any supporting detail reviewed and approved by Road Commission personnel, as well as disbursement eligibility requirements. These cost participation agreements shall also require the maintenance of supporting documentation as outlined in 16.) below and a right to audit clause as outlined in 17.) below. 8.) In an effort to keep Oakland County Commissioners informed of the benefits local units of government they represent derive from Tr- Party Program funding, prior to approval, the Road Commission shall forward a copy of the proposed cost participation agreement to the Oakland County Commissioner representing the local unit of government named in the agreement along with a copy of the Road Commission Board agenda to afford that Commissioner the opportunity to attend the Board meeting, if desired. 9.) Upon approval of the cost participation agreement by the Road Commission Board, Tr-Party Program funding shall be distributed in accordance with the terms and conditions set forth in the cost participation agreement between the Road Commission for Oakland County and that local unit of government. 10.) The Road Commission shall invoice the County of Oakland for the County's proportionate share of funding in accordance with the terms and conditions set forth in 1.) and 3.) above. An invoice for a lump sum amount may be presented at the same time if all of the conditions set forth in 1.) and 3.) above are satisfied. So as not to prohibit the program's continued operation, the Road Commission for Oakland County may, in the alternative, invoice the County of Oakland in phases as local units of government submit required documentation as outlined in 1.) and 3.) above. 11.) The Oakland County Department of Management and Budget Fiscal Services Division shall process payments in accordance with policies and procedures as set forth by the Department of Management and Budget and the Oakland County Treasurer. General 12.) The Road Commission for Oakland County may provide advance funding for Tr-Party Program projects. This advance funding shall be at the discretion of the Road Commission for Oakland County. Tr-Party Program appropriations may be used to re-pay the advance, but shall not be utilized to initially fund any portion of these advances. The Road Commission for Oakland County and the local unit of government receiving the advance assumes any and all responsibility with any advances granted in the event that future Tr-party appropriations are reduced. 13.) All undistributed Tr-Party Program funding apportioned to a particular local unit of government shall be carried forward into the following fiscal year and shall remain available to that Page 3 If • a Appendix "F" Attachment "A" Tr-Party Program Policy and Procedures particular local unit of government to reimburse for project expenditures under the terms set forth in this resolution. 14.) The Road Commission for Oakland County shall calculate interest on the County's 1/3 share of any undistributed funds maintained in the Road Commission's deferred revenue line item. This interest shall be utilized to offset any future budgeted appropriations approved by the Oakland County Board of Commissioners. In the event that funding for the Tr-Party Program is not appropriated through the County of Oakland's annual budget process, the Road Commission for Oakland County shall transfer any accumulated interest earned to the County of Oakland. The interest earned on the County of Oakland's 1/3 share of any undistributed funds shall be recorded as interest income through the County General Fund. 15.) In the event a local unit of government chooses to opt-out from participating in the Tr-Party Program, any previously undistributed allocated funding shall be re-allocated to all participating local units of government in accordance with the pre-determined formula set forth by the Road Commission for Oakland County. For reconciliation and reporting purposes, the Road Commission for Oakland County shall notify the Oakland County Board of Commissioners of any such re-allocations as part of satisfying the conditions in 3.) above. 16.) Any and all supporting documentation for project expenditures reimbursed by Tr-Party Program appropriated funding shall be maintained a minimum of seven years from the date of final reimbursement for actual expenditures incurred. 17.) The Oakland County Auditing Division reserves the right to audit any and all project expenditures reimbursed through the Tr-Party Program. Page 4 IC • • ames L. Ritzdatrick Man Manager Ve OAKLAND; COUNTY MICHIGAN AUDITING DIVISION (zrr ) L. BROOKS PATTERSON, OAKLAND COUNTY EXECUTIVE James L. Fitzpatrick, Manager August 19, 2003 Chuck Moss, Chairperson Oakland County Board of Commissioners Finance Committee 1200 North Telegraph Road Pontiac, Michigan 48341 Subject: Tr-Party Program Final Report Dear Commissioner Moss: The Oakland County Auditing Division has reviewed the draft policy and procedures in follow-up to language changes made by the Audit Subcommittee and are recommending additional amendments consistent with the changes previously adopted by the Audit Subcommittee. The additional recommended amendments are more fully described here: • Attachment "A" - At Paragraph 3.2) on page 2: strike entire paragraph as the previously adopted amendment to Paragraph 1 eliminates this requirement; • Attachment "A" — At Paragraph 10) on page 3: add mention of satisfying conditions in Paragraph 1 in two locations to reflect the new language as previously adopted by the Audit Subcommittee. I have provided a copy of the draft policy and procedures with the recommended changes noted at the locations described above. I have also provided a final version of the draft policy and procedures with the revisions incorporated as well as the final report on the Program which will be forwarded to the Road Commission for Oakland County upon formal adoption from the Finance Committee. If you have any questions regarding this matter, pl9d2-vntact me at (248) 858-0997 or Terri Meiers at (248) 452-8646. EXECUTIVE OFFICE BUILDING 34 EAST • 1200 N TELEGRAPH HD DEPT 405 • PONTIAC MI 48341-0405 • (248) 858-0994 • FAX (248) 858-2918 Attachment "A" Tr-Party Program Policy and Procedures Policy The Oakland County Board of Commissioners is permitted to, in accordance with Public Act 253 of 1917, MCL 247.121, appropriate funding from the General Fund to the Road Fund provided that there is a surplus in the General Fund and that the monies are used for construction, maintenance, and repair of highways under the supervision and direction of the Board of County Road Commissioners. The Road Commission for Oakland County and each participating local unit of government shall match any future appropriations approved by the Oakland County Board of Commissioners constituting a 1/3 share contribution by each party. Tr-Party Program appropriation of funding decisions shall be made by the Oakland County Board of Commissioners based upon the best interests of the County and the needs of its citizens. The Oakland County Board of Commissioners expressly reserves the right to adjust the County of Oakland's 1/3 proportionate share at any time based on County budget issues. Program funding appropriated shall be utilized solely for the purposes of road improvements to roads under the jurisdiction of the Road Commission for Oakland County to include, but is not limited to, paving, lane additions or lengthening, bridges, and drainage as they relate to road safety, structure, or relieving congestion. This may include fulfilling a local governmental unit's obligation of matched funding for federally funded road projects on roads under the jurisdiction of the Road Commission. Project identification and selection shall be at the discretion of the Road Commission for Oakland County and each participating local unit of government utilizing methods previously adopted by the Road Commission for Oakland County in accordance with Road Commission policies and procedures. Tr-Party Program project expenditures are limited to those expenditures that the County of Oakland is authorized by MCL 247.121 to financially support and are limited to expenditures incurred in connection with road improvements as defined within this policy as adopted by resolution. Procedures for Administration The following procedures shall be implemented for the administration of the County of Oakland's 1/3 share contribution to the Tr-Party Program. Funding 1.) Funding appropriated by the County of Oakland through the Budget process shall be adopted through miscellaneous resolution on an annual basis. County funding shall not be released until the County receives the annual resolution from the Road Commission outlining Page It ••n • 'I 6 Attachment "A" Tri-Party Programn Policy and Procedures the Tr-Party allocations. The Road Commission shall not expend any County funds until it has the final cost participation agreements from the communities and is ready to proceed with the projects. 2.) Funding appropriated shall be allocated to local units of government in accordance with a pre-determined formula as set forth by the Road Commission for Oakland County. 3.) On an annual basis, the Road Commission for Oakland County shall provide a letter addressed to the Oakland County Board of Commissioners General Government Committee. This letter shall contain a schedule containing the following information: 3.1. Each local unit of government that has agreed to participate in the Tr-Party Program, the level of appropriated funding allocated to each local unit of government in accordance with the pre-determined formula set forth by the Road Commission for Oakland County, and a break-down of projects selected by each local unit of government that this allocation is to fund. 3.2. THIS LETTEH CHALL CATICFACTION OF 1.) ABOVE. Maintenance 4.) Oakland County appropriations to the Tr-Party Program shall be maintained in a newly established special revenue fund created for the County's 1/3 contribution of Tr-Party Program funding. Annually, there shall be one fund transfer for the total amount appropriated, as previously approved through miscellaneous resolution as part of the annual budget process, from the County of Oakland's General Fund. Past undistributed appropriations, prior to the adoption of this policy, shall remain in the deferred revenue account established through the Road Commission's Road Improvement Fund until such time as payment for project expenditures incurred is required. 5.) For reconciliation purposes, the Road Commission for Oakland County shall maintain a schedule denoting each local unit of government agreeing to participate in the Tr-Party Program, the annual amount of appropriated funding allocated to each local unit of government, the annual amount of funding distributed to each local unit of government in accordance with cost participation agreements entered into between that local unit of government and the Road Commission for Oakland County, and the remaining balance of unused aggregate appropriations allocated from all program funding years. 6.) Annually, the Road Commission for Oakland County shall report to the Oakland County Board of Commissioners the status of Tr-Party Program appropriated funding apportioned to each local unit of government, which includes disbursements in accordance with cost participation agreements as well as undistributed funds. This annual report may be submitted at the same time conditions set forth in 3.) above are satisfied. Pag1e 2 405 ' Attachment "A" Tr-Party Program Policy and Procedures Disbursement 7.) In order to secure Tr-Party Program funding to pay for project expenditures, the local unit of government shall enter into a cost participation agreement (pre-project authorization) in accordance with policies and procedures, as set forth by the Road Commission for Oakland County, and approved through adopted resolution by the Road Commission Board. Minimally, cost participation agreements shall include responsibility for administering the project, the project location, purpose, scope, estimated costs including any supporting detail reviewed and approved by Road Commission personnel, as well as disbursement eligibility requirements. These cost participation agreements shall also require the maintenance of supporting documentation as outlined in 16.) below and a right to audit clause as outlined in 17.) below. 6.) In an effort to keep Oakland County Commissioners informed of the benefits local units of government they represent derive from Tr- Party Program funding, prior to approval, the Road Commission shall forward a copy of the proposed cost participation agreement to the Oakland County Commissioner representing the local unit of government named in the agreement along with a copy of the Road Commission Board agenda to afford that Commissioner the opportunity to attend the Board meeting, if desired. 9.) Upon approval of the cost participation agreement by the Road Commission Board, Tr-Party Program funding shall be distributed in accordance with the terms and conditions set forth in the cost participation agreement between the Road Commission for Oakland County and that local unit of government. 10.) The Road Commission shall invoice the County of Oakland for the County's proportionate share of funding in accordance with the terms and conditions set forth in 1.) AND 3.) above. An invoice for a lump sum amount may be presented at the same time if all of the conditions set forth in 1.) AND 3.) above are satisfied. So as not to prohibit the program's continued operation, the Road Commission for Oakland County may, in the alternative, invoice the County of Oakland in phases as local units of government submit required documentation as outlined in 1.) and 3.) above. 11.) The Oakland County Department of Management and Budget Fiscal Services Division shall process payments in accordance with policies and procedures as set forth by the Department of Management and Budget and the Oakland County Treasurer. General 12.) The Road Commission for Oakland County may provide advance funding for Tr-Party Program projects. This advance funding shall be at the discretion of the Road Commission for Oakland County. Tr-Party Program appropriations may be used to re-pay the advance, but shall not be utilized to initially fund any portion of these advances. The Road Commission for Oakland County and the local unit of government receiving the advance assumes any and all responsibility with any advances granted in the event that future Tr-party appropriations are reduced. !NI+ 014 c. • 4 I. Attachment "A" Tr-Party Program Policy and Procedures 13.) All undistributed Tr-Party Program funding apportioned to a particular local unit of government shall be carried forward into the following fiscal year and shall remain available to that particular local unit of government to reimburse for project expenditures under the terms set forth in this resolution. 14.) The Road Commission for Oakland County shall calculate interest on the County's 1/3 share of any undistributed funds maintained in the Road Commission's deferred revenue line item. This interest shall be utilized to offset any future budgeted appropriations approved by the Oakland County Board of Commissioners. In the event that funding for the Tr-Party Program is not appropriated through the County of Oakland's annual budget process, the Road Commission for Oakland County shall transfer any accumulated interest earned to thetounty of Oakland. The interest earned on the County of Oakland's 1/3 share of any undistributed funds shall be recorded as interest income through the County General Fund. 15.) In the event a local unit of government chooses to opt-out from participating in the Tr--Party Program, any previOUgly undistributed allocated funding shall be re-allocated to all participating local units of government in accordance with the pre-determined formula set forth by the Road Commission for Oakland County. For reconciliatio.n and reporting purposes, the Road Commission for Oakland County shall notify the Oakland County Board of Commissioners of any such re-allocations as part of satisfying the conditions in 3.) above. 16.) Any and all supporting documentation for project expenditures reimbursed by Tr-Party Program appropriated funding shall be maintained a minimum of seven years from the date of final reimbursement for actual expenditures incurred. 17.) The Oakland County Auditing Division reserves the right to audit any and all project expenditures reimbursed through the Tr-Party Program. Page fo6 G. William Caddell, County Clerk September 4, 2003 Resolution #03237 Moved by Moss supported by Bullard the resolution be adopted. Moved by Moss supported by Bullard the Audit Subcommittee Report be accepted. A sufficient majority having voted therefore, the report was accepted. Vote on resolution: AYES: Douglas, Gregory, Hatchett, Jamian, Knollenberg, KowaII, Law, Long, McMillin, Middleton, Moffitt, Moss, Palmer, Patterson, Potter, Rogers, Scott, Suarez, Webster, Wilson, Zack, Bullard, Coulter, Crawford. (24) NAYS: None. (0) A sufficient majority having voted therefore, the resolution was adopted. eon. I HERBY APPROVE DE FOREGONG RESOLUTION STATE OF MICHIGAN) COUNTY OF OAKLAND) 1, G. William Caddell, 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 September 4, 2003, 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 4th day of September, 2003.