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FINANCE COMMITTEE MINUTES

By Dorothy Peterson,2014-08-07 09:52
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FINANCE COMMITTEE MINUTES

    FINANCE COMMITTEE MINUTES

    July 10, 2009

Convened: 9:00 AM

    Present: Commissioner Gordon, Commissioner Swift, and Commissioner Heinemann

    Also Present: Commissioner Olney, Administrator Norman, Verna Winger Payroll, Sheriff

    Warren Canon, Clerk Teresa Kubasiak, Kayla Sikorski Summer Intern, and Erin

    Boertman and Michael Tackett of Municipal Employees’ Retirement System of

    Michigan (MERS)

     Committee approved the agenda.

ITEMS FOR ACTION

    The Committee reviewed a request to amend the Special Fund Budgets to the Brownfield Redevelopment Authority for Petroleum and Hazardous to include a Travel line item in each fund. Committee recommends:

    Motion by and seconded by that

    authorization be given to amend the Special Fund Brownfield

    Redevelopment Fund-Hazardous Expense and Revenue Budget

    by $2,000.00 by adding Expense line: #253.696-860.00, Travel

    from $0 to $2,000.00, and Revenue line: #253.696-501.00, Federal

    Aid from $130,000.00 to $132,000.00, as presented.

    Motion by and seconded by that

    authorization be given to amend the Special Fund Brownfield

    Redevelopment Fund-Petroleum Expense and Revenue Budget by

    $2,000.00 by adding Expense line: #253.697-860.00, Travel from

    $0 to $2,000.00, and Revenue line: #253.697-501.00, Federal Aid

    from $130,000.00 to $132,000.00, as presented.

    A review to Amend the General Fund Budget to include Grant funding of $16,000.00 received from the State for the Live Palm Scanner and Federal funding of $36,558.00 for a Boat were reviewed. Committee recommends:

    Motion by and seconded by that

    authorization be given to amend the General Fund Budget

    Revenues and Expenses by $52,558.00 from $12,992,566.64 to

    $13,045,124.64.

    Motion by and seconded by that

    authorization be given to amend the General Fund Sheriff

    Department (#101-301) Revenue by increasing line: #101.301-

    539.0302 from $0.00 to $16,000.00, and Marine Safety (#101-

    331) #101.331-501.0002 from $0 to $36,558.00, as presented.

    Motion by and seconded by that

    authorization be given to amend the General Fund Sheriff

    Department (#101-301) Expense Budget by increasing line:

    #101.301-752.0202 from $0 to $16,000.00, and Marine Safety

    (#101-331) #101.331-978.0102 from $0 to $36,558.00, as

    presented.

     A line item transfer was presented to cover a between budget transfer to forward approved Capital Outlay money for Marine Patrol in the amount of $25,000.00. Committee recommends:

    Motion by and seconded by that

    authorization is given to approve the Line Item Transfer, as

    presented.

     The Committee reviewed the Bills and Accounts. Administrator Norman summarized the top five accounts totaling 63% of the invoices. Committee recommends:

    Motion by and seconded by that

    authorization is given to approve the Bills and Accounts in the

    amount of $218,639.37.

ITEMS FOR INFORMATION

     The Municipal Employees’ Retirement System of Michigan (MERS) Representative, Erin Boertman, provided an overview of MERS and the 2008 Actuarial Valuation for MERS. In 1996 MERS became a public organization and they have continued to grow in retirement solutions since this time. Currently they have approximately 730 groups in the program and they manage the plan for our POLC and COAM contracts in the Sheriff Department. They have several counties, cities, villages, and municipal entities. This allows them to pool employer assets for investment purposes. The Actuarial Report is prepared by Gabriel Roeder Smith & Company. When processing the Annual Actuarial Valuation they use a 10 year smoothing method. The smoothing is an average over the ten year period that allows the plan to benefit from good years when there are tough economic times. This year we finished at a negative 25%.

     We have maintained an 82% funded rate and this is considered above average. Finance Chair Gordon asked what should be the goal as our other pension plan is at 112% funded. Ms. Boertman responded that 112% is really good as the long-term goal is to be 100% funded. Board Chair Olney asked if they had a prescribed allocation of investments. A Chart was distributed that shows the model they use for asset allocation. Chair Olney asked about the percentage of equities or stock and the percentage of fixed income and bonds. Ms. Boertman explained the allocation at 68.5% in equities or stocks and 31.5% in fixed income or bonds. Commissioner Gordon explained that we have a say over the asset allocation with John Hancock and questioned if we have the same control over the assets at MERS. Ms. Boertman answered that there is an elected board and we could voice our concerns through that board. The MERS Board consists of peers who are voted on by the employers in the plan and the Board oversees the investment activities. MERS assumes all fiduciary responsibility. They manage $5 billion in assets and they are a more conservative fund. As of the end of 2008, Branch County has two retirees utilizing the fund plan.

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     Administrator Norman gave some highlights from the 2008 Audit. Over the last three years, we have increased the fund balance from approximately 10% to 18.2% and the current recommendation is to have a fund balance of 15% to 20%. We received the highest audit possible of an “Unqualified Audit”. The good news is Branch County is being fiscally responsible. The final audit will be presented at the next Finance Committee meeting.

     The second quarter Friend of Court review with the Friend of Court and Maximus highlighted the County’s concern of the deficit situation in the Friend of the Court. It was

    explained that is due to the State being behind on their payments. Maximus forecasts that the Friend of Court budget will be in balance by the end of the calendar year. An increase of employees taking the Cash-In-Lieu has saved $25,000.00 in the budget. Commissioner Heinemann asked what assurance we have the Friend of Court will receive the expected funding from the State. That is a good question.

     The Committee asked what happened with the report from the State Court

    Administrator’s Office conducted on the Friend of Court office. Administrator Norman said he

    has addressed this with Judge O’Grady and they did not have a final report but will present the financial review when it was done. Commissioner Swift said he feels it is the responsibility of the Court to provide the full report to the Board, not just the financial portion.

     A summary of Court costs showing revenues and expenses for Branch County was distributed for the Committee’s review. Administrator Norman explained at a recent meeting of the Association of County Administrators they briefly discussed the issue of forfeiting State Revenue Sharing if the State would fund the Courts. Administrator Norman is asking the Board to review this and give their input and position so he can respond accordingly on the subject at future meetings. He understands that there is some history here and it has been reviewed before. The Committee acknowledged that it has been a topic of discussion in the past but never materialized. This may be a subject to address at the upcoming Summer Conference. Commissioner Olney asked if there is any information on what other States do with regard to the Courts and Revenue Sharing.

     The Finance Committee meeting for August, 2009 was rescheduled from Friday, August 7, 2009 at 9:00 AM to Thursday, August 6, 2009 at 9:00 AM.

Adjourned: 9:50 AM

Submitted by: Commissioner Gordon

     Commissioner Swift

     Commissioner Heinemann

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