Wednesday, October 28, 2015

You DON'T Pay Water/Sewer Bills to FUND Retiree Healthcare/@ $2.7 Million

Hi All,
This is a follow up blog to :

At the Monday, October 26, 2015 Board of Trustees meeting, Supervisor Savoie with the help of employee Jason Theis, Finance Director,  attempted to get approval to make  a "simple electronic transfer" of $2.7 million dollars.  They stressed that it was the right and easy move to make.  Agenda item # 5 was presented as such:

This agenda item was eventually TABLED and will be back on the AGENDA in November 2015.
All Bloomfield Township taxpayers should be OUTRAGED by this proposal to transfer $2.7 million RESTRICTED dollars from the Water and Sewer Fund... (money collected from water and sewer BILL PAYMENTS) and proposed be deposited into the Retiree Healthcare Trust VEBA.  Once transferred, it can not be returned. 

ADDING to the insult is to find out that the water and sewer fund currently has over $50 MILLION dollars.  Why?  Why the huge increases over that past years in water and sewer rates for each household while sitting on that much money?  The township has even BONDED recent projects for water and sewer.  That debt perhaps could have been LESS by paying cash for the project without the need for BOND FEES and 20 years of INTEREST.   All this money collected from the bills for water and sewer .... looks like an easy target for a  "transfer" of funds... but I don't think it is legal.  These  W&S funds are not township  "slush funds" to be used where ever an underfunded problem is noted.  The General Fund, money collected from TAXES (millage money) is responsible for the wages and benefits the leadership has promised over the decades.  Don't bill us for one thing and try to spend it another way... opinion.

The problem for most in attendance and some on the Board of Trustees was that the agenda item had NO supporting documentation.  Supervisor Savoie tried to blame Treasurer Dan Devine for not doing research.  Excuse me. Devine was chastised earlier this year for incurring attorney fees without Board approval.  Why didn't Savoie bring transparency and documentation to the meeting to support his request?  The agenda item didn't even say the amount:  $2.7 MILLION dollars.

The agenda item # 5 was originated with Theis and Savoie.  Employee Theis, said that the actuarial and/or the auditor noted that the Retiree Healthcare Trust VEBA was grossly UNDERFUNDED.  Well, yes!  About 98.7 % underfunded.  Try $ 157 MILLION or so.   This was NO surprise.  The Township has been paying the Retiree Health Benefits on an annual basis for years.  A portion of each department budget goes to Retiree Health Care.  Problem is, only enough is collected to pay for the CURRENT bill.  Problem is, the law changed and the Township MUST make this information transparent to the taxpayers.  Problem is, that $2.7 million is not part of your TAXES, that money was collected as a BILL to pay for water and sewer service.

The Water and Sewer BUDGET... already has line items to pay THEIR SHARE of the current year retiree health benefit bill. 

Take time to view the audio/video archived tape of this meeting.  Listen to Savoie, Theis, the Trustees and the audience members who chose to speak. 
Trustee Corinne Khederian was absent... AGAIN.  A too frequent occurrence.
Choose Oct. 26, 2015 video:
Board of Trustees Meetings

Why didn't Supervisor Savoie, who is in charge of setting the budget, make plans over his 4 years of being Supervisor to fund the Trust?  WELL, he was more concerned apparently with giving ALL the employees, including himself, 2% pay increases for EACH of the years 2013, 2014, 2015 and 2016.   With pay increases come the  increased pension/health benefits/obligations.  The union employees are working under a six year contract.  There was a wage "opener" in the years 2013 and 2015.  NO PROMISE of a change in wages... just the opportunity.   Savoie saw the opportunity to give ALL employees raises. So he did, with the vote of the Trustees.  Too bad all that money wasn't directed into the underfunded retiree health care trust.  What budget is paying for those employee wages/benefits?

Every two years, Milliman, Inc.  produces a report for the Township on this Retiree Healthcare Trust.
The last one was in 2013.  Apparently this year, this FUND really stands out as a PROBLEM in the status of the Township.  Here is the 2013 report...which Savoie and all Trustees received in 2013.
[PDF] Summary Annual Report 2014 Charter Township Of Bloomfield Retired Employees' Health Care Benefits Trust
...1. Gregory J. Schwartz and Company 2. RBC Correspondent Services 3. Milliman, Inc....
...1.07% as of the latest report dated 7/1/13 from Milliman, Inc....

The taxpayers have GENEROUSLY given approvals for millages throughout the decades.  To find out during Supervisor Savoie's leadership that the Pension Fund was $85 Million Underfunded and at the same time say nothing about the $145 Million Underfunded in the Retiree Healthcare Trust  (at that time) and say nothing or do nothing is almost criminal.  Most of the Trustees have been with the Township for several 4 year terms.  They have all failed in their duty to protect the interests of the taxpayers.

It will be FOOLISH for any future millage approval or millage renewal without first getting full disclosure of the 30 FUNDS  apparently holding enough money to rate this Township AAA.

How much money is invested?  What Funds?  Are the Funds co-mingled?  Are the Funds earning money or losing money?  How much DEBT is there at the Township?  Perhaps the STATE TREASURY Dept.  should step in and do a COMPLETE  or even a forensic audit. 

It will be FOOLISH for any future millage approval or millage renewal without first evaluating all the departments of this Township for excessive spending and a clear plan to FUND the  obligations our current and past leadership has promised.

From 2008 to now, many municipalities made hard decisions about employees and budgets.  However, this Township took another direction and asked for a 20 year 1.3 millage to maintain the "status quo"  and has spent that $4 Million PLUS collected each year to grow government spending... and avoid funding the important obligations.   Most of the contributors to that "stealth" February millage ballot in 2010 were VENDORS and EMPLOYEES of the Township... with the campaign to vote YES their idea.

Supervisor Savoie has already started collecting money at a fund raiser for re-election in 2016.  Some of those same 2010 vendors and employees are now contributors to the Re-elect Savoie campaign. 

Millage renewals will be on the ballot in 2016.... could be before November.
All 7 Bloomfield Township leadership positions are AVAILABLE at the November 2016 election.  
The six year employee contract expires March 31, 2017. 

I hope several people will step up and challenge all 7 positions in November 2016.  The Township is in great need for a CHANGE...  for fiscal responsibility and transparency.

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