HomeMy WebLinkAboutResolutions - 2009.12.09 - 9725MISCELLANEOUS RESOLUTION #09289 December 9, 2009
BY: FINANCE COMMITTEE, TOM MIDDLETON, CHAIRPERSON
IN RE: DEPARTMENT OF MANAGEMENT AND BUDGET — APPROVAL OF FY 2009 DEFICIT
ELIMINATION PLAN
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Chairperson, Ladies and Gentlemen:
WHEREAS Public Act 140 of 1971 (the General Revenue Sharing Act) and Public Act 34
of 2001 (revised Municipal Finance Act)required local units of government submit a "deficit
elimination plan" when any governmental fund experience negative unreserved fund balance and
when any proprietary fund experiences negative unrestricted net assets: and
WHEREAS Oakland County completed the fiscal year ending September 30, 2009 with
three (3) funds with negative unreserved fund balances and one (1) fund with negative
unrestricted net assets, 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
Motion carried unanimously on a roll call vote with Potter absent.
Finance Corer,92atee____
LLA.
L BROOKS PATTERSON, OAKLAND COUNTY EXECUTIVE
FISCAL SERVICES DIVISION
Tim" J. SQave. Manager
OAKLAND
COUNTY MICHIGAN
DEPARTMEVT Or MANAGEMENT AND 61)1)5E7
December 10, 2009
Bureau of Local Government Services
Michigan Department of Treasury
Treasury Building
430 West Allegan Street
Lansing, MI 48922
For the fiscal year ending September 30, 2009, Oakland County reports three (3) funds
with a negative unreserved fund balance (e.g. a "deficit"), and one fund with negative
unrestricted net assets. 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 $(109.018)
The negative unreserved fund balance in the Lake Levels - Act 146 Fund primarily
reflects costs that are related to the Bush Lake Level project. Costs-to-date include
preliminary design costs as well as litigation costs associated with an on-going legal
action that has not been resolved to date. The litigation is expected to be settled within
the next year. The design phase has been completed and once the permits are received
from the MDEQ, the project will move to the next phase where a total project cost
analysis will be prepared and funding will be determined. If the project does not move
forward, a special assessment will be issued to cover the preliminary design costs as well
as the costs for litigation.
Special Revenue Fund - Lake Levels - Act 146 $(89, 7P7)
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. Due to unexpected costs in FY 2009, there are several individual lake
level funds with deficit balances; however, the majority of the overall net negative
unreserved fund balance is due to a $74,397 deficit in the Oxford Multi Lake Level Fund.
The Oxford Multi Lake Level Fund deficit is related to a large maintenance project that is
being funded through a 5 year special assessment which began in 2009. Negative
unreserved fund balances in the various other lake level funds will be reviewed arid
eliminated in future years assessments.
EXECUTIVE OFFICE SOWING 41 WEST • 2100 PONTIAC LAKE RD • „WATEFFORD M 4=8-0403 • (248)8584987 • FAx (248) 975-9869
Special Revenue Funds - Pollution Control Grants $( 6,254)
The negative unreserved fund balance reflects the fact that this grant fund operates on a
reimbursement basis; e.g. the County pays the original expenses and is reimbursed by the
grantor agency after submission of the proper support documentation. Typically.
reimbursement for year end expenditures lags by two to three months. Once
reimbursement is obtained, the negative unreserved fund balance will be eliminated.
Should the reimbursement not be sufficient to cover the expenditures, the County has
match funds budgeted which will be transferred to cover any remaining deficit.
Internal Service Fund — Drain Equipment Fund 3(965.946)
The negative unrestricted net asset balance is primarily due to a change over the past
several years to replace Drain Equipment owned vehicles with leased vehicles from the
Motor Pool Fund. The replacement of Drain Equipment owned vehicles requires a
transfer from the Drain Equipment Fund to the Motor Fund at the time of purchase and
the number of owned vehicle replacements has been fairly significant over the past
several years. The Drain Equipment Fund was able to make a significant improvement in
FY 2009 realizing a positive change of net assets of S850,662 as compared to the
S137,171 increase in the prior year. The $850,662 positive change in net assets is more
than the 5323,789 projection provided to the State of Michigan with the FY 2008 deficit
elimination plan detail. The Drain Equipment vehicle rates, as well as other equipment
rates, were increased for FY 2009 and will continue to escalate in order to cover annual
operations and future replacement. It is anticipated the negative unrestricted net assets
will be eliminated by the end of FY 2011 based on the continued rate adjustments, and
the decrease in the number of Drain Equipment owned vehicles requiring one-time
transfers to the Motor Pool Fund for replacement.
We trust that the above demonstrates that Oakland County has sufficient plans in place to
eliminate the negative unreserved fund balance and negative unrestricted net assets
reported in the financial records for the fiscal year ending September 30, 2009. Any
questions regarding this matter should be directed to my attention at 248-858-0807, or by
e-mail at sodvetfiklakgov.corri.
3
Sincerely,
Timothy J. Soave, CPF0
Manager, Fiscal Services Division
Department of Management and Budget
Oakland County, Michigan
cc: Robert Daddow, Deputy County Executive
Andy Meisner, County Treasurer
Laurie Van Pelt, Director. Management and Budget
John McCulloch, County Drain Commissioner
1 IRBY APPROVE4THE FOREGOING RESOLUTION
Resolution #09289 December 9, 2009
Moved by Middleton supported by McGillivray the resolutions (with fiscal notes attached) on the amended
Consent Agenda be adopted (with accompanying reports being accepted and appointments being
confirmed),
Discussion followed.
Vote on Consent Agenda:
AYES: Burns, Capella, Coleman, Coulter, Douglas, Gershenson, Gingen. Gosselin, Greimel,
Hatchett, Jackson. Jacobsen, Long, McGillivray, Middleton, Nash, Potter. Potts, Runestad,
Schwartz. Scott, Taub, Woodward, Zack, Bullard. (25)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the amended
Consent Agenda were adopted (with accompanying reports being accepted and appointments being
confirmed).
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Ruth Johnson, 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
9, 2009. 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 9th day of December, 2009.
Gat
Ruth Johnson, County Clerk