There is a Financial Sustainability Committee (FSC) meeting
@ 7:30 AM tomorrow : Monday, April 10, 2017
***ANOTHER MESSAGE: The Board of Trustees regular Monday meeting is rescheduled to Wednesday, April 12, 2017 @ 7 pm due to a religious holiday.
The FSC was formed in January 2015. I think it is important to know the official language from the minutes to understand what the FSC is authorized to do. I have copied the minutes at the end of this blog. This committee is meeting MONDAY, APRIL 10 @ 7:30 AM. While four trustees (Roncelli, Buckley, Walsh and Schostak) are not a member of this committee, they will be asked at a later date to make decisions and cast votes based on the FSC discussions and findings.
FYI: The township FAILED to post an agenda and/or a board packet for this 4/10/17 @ 7:30 AM FSC meeting. Lately, incorrect or missing postings or failure to record the audio portion of the meeting has occurred at the township in general.
However, reviewing the FSC agenda from the March 8, 2017 meeting, I would hope that all trustees and any citizen that wishes the information to FOIA the handouts discussed about the financial and fiduciary funds and also FOIA a request for the 33 cent audio tape of the meeting. Please note: The audio tape can be destroyed 24 hours after the minutes are approved. The 3/8/17 minutes/ not shown in a board packet for the April 10 meeting... should be approved Monday morning therefore getting your FOIA in now is important.
Lisa Brody wrote an article in Downtown dated March 10. Either she was at the 3/8/17 FSC meeting or just did interviews/or press release or combination of all and indicated that the next meeting (4/10) is to look at preparing a request for proposal (RFP) and how to go about the FRP Process for their various funds, including the equity fund.
Since the equity fund currently w/ Schwartz & Co is BOND money from the sale in 2013 for the DB Pension, I hope that all involved in the decision making will handle that fund money appropriately. The bond language often suggests that money/accounts not be commingled or used in other ways .
I read that the township owed money as of 12/31/16 and was required to send to Prudential via a wire transfer to JP Morgan Chase- NY,NY over $5 million by March 15, 2017. Did that happen?
There is still another $5 million owed before 12/31/17 as mentioned in the 2/27/17 letter from Prudential to Treasurer Brian Kepes. That same letter also stated that the "cost of living" payment (as of 12/31/16) was $95,604.00 a month.
With annual raises since 2013 @ 2% each year plus the continued cost of living, I assume the liability to the DB Prudential Pension plan will continue to increase. Cost of living fees were never part of the "guarantee" from Prudential and those costs must be covered by the township. Now, even though the "guarantee" was ended as of 12/2/16 for any retiree in this pension plan retiring AFTER that date, there will still be fees for "cost of living" and fees for any changes as to the actuarial valuation. This DB Prudential pension account will still be active (most likely) for more than 50 years/ until the last member or his/her beneficiary passes. This DB pension was closed to new hires in 2005. They have a different plan (401)A I believe where the township funds it with 10% or 14 % of base pay. From memory... approx. 100 employees and $5 M in assets?
My question in all of this to the FSC members:
WAS "cost of living" something that the township could have ended with the change in contract terms? Was this discussed in your March meeting? A new three year contract was approved in March 2017. I think a missed opportunity.
Next question I have is: Are all of the Trustees aware that the Oakland County Local Government Investment Pool for Bloomfield Township now has $18 million invested? I thought the first million /plus was authorized at a public meeting. What is bothering me is that the taxpayers never see all the accounts the township has with money invested. What accounts went into the OC pool? If some of those CD's or other short term/ expiring accounts/investments were part of a department that is funded by MILLAGE money... I don't believe that should be commingled with township money in the OC investment pool. Is it? Millage money is dedicated to be spent ONLY for the purpose approved.
Another question: The township has a bank account with Chase Bank. I will assume that the $28.8 million as of 3/6/17 is money recently collected as property taxes? Need to find that out. Treasurer Kepes was reported to have said that the interest rates at Chase Bank were improved from earning 22 basis points to earning 40 basis points. .... almost double. Did the township have this account last year? Is this a new bank for tax deposits? If yes, did that have anything to do with Kepes being able to get the change in interest rates? Is Chase Bank the same bank where the township sent Prudential pension past payments? (see letter 2/27/17 that should be part of the minutes from 3/8/17 when posted).
Treasurer Kepes also indicated that the committee is looking at purchasing U.S. Treasury Bills and creating a fund that will hold short term T bills. (estimate 1.2 % /year interest) for the purpose being to reduce exposure to investment loss. Again, I wonder if millage funds that are DEDICATED to be spent ONLY for the purpose stated in the millage will be commingled in such a way that the interest earned or money lost will be difficult to separate.
Guess what? The FSC made a motion and approved unanimously to change the Schwartz & Co. Short Term Bond Portfolio account to T-Bills managed by CHASE. Another Chase Bank connection. However, the FSC is a recommending body. Did the Board approve this change in investments with a VOTE at a public meeting? Again, I ask, where did the money come from that was in that Schwartz short term bond portfolio?
Also, at this 4/10 meeting, I am concerned that the FSC preparing the RFP with Savoie, Kepes, Theis and 3 appointed citizens (Petoskey, Katz and Hudson) and Trustee Barnett will go like most RFP's generated in this township.... that the RFP as written, generally leads to only one provider who can meet the requirements. IE: a predetermined outcome. My opinion. Savoie and Theis basically did an RFP for the AUDITING contract without Board approval. The "chosen" company just happened to be an OHCC connection as well as a David Payne "neighbor" in the northern MI community. The Trustees did however eventually approve the change in auditors. On the flip side, the township also refuses to seek RFP bids for other major projects or contractors/vendors when they just don't want to do it.
I am also bothered by the fact that the township, without Board vote at a public meeting, hired Milliman , the Actuarial company that has done the work every two years concerning the OPEB: Retireed Employees' Health Care Trust VEBA. Milliman was hired to do another report for 2016 following the 2015 report (which was altered and noted with an *asterisk about funds deposited in November/ but the report was dated for July 1, 2015).
In 2015, Milliman Actuarial Report was altered (mutually w/twp) and Water and Sewer became a new category of employees and the township in November of 2015 deposited $2.76 million dollars into that OPEB VEBA account from the fees collected from the Water and Sewer "Enterprise Fund". The money was deposited in November 2015 but noted in the July 1, 2015 report with an asterisk. A lot of activity occurred from Sept. to Nov. 2015 at the Board of Trustees meeting concerning this Trust Fund.
Fall of 2016, I discovered that another report was performed for Bl. Twp. by Milliman with the report dated July 1, 2016. The cost for the report surfaced as a line item in the "payroll and vouchers" list and approved without comment by the Board of Trustees. I believe the township received the report by November 9, 2016. Plenty of time to make it public. They didn't. Still can't find it on the township website. I have a paper copy.
Milliman was apparently hired and told by someone at the township to separate out and indicate in a new July 1, 2016 Actuarial Report that there are more employee classifications to be separated from the main and named them: Cable Studio and Building Inspection Fund. That was never discussed at a public meeting. So, how could the Milliman July 1, 2016 report end up with two new categories? They did not exist in the 7/1/15 Report. They did not exist as potential categories in public meetings either.
The Milliman Bloomfield Township Other Post-Employment Benefits Program July 1, 2016 Actuarial Valuation report states in the Summary of Liabilities page:
OPEB VEBA as of the 7/1/16 report has a TOTAL ACCRUED LIABILITY $165,437,779. 00
- Cable Studio has a total accrued liability at: $1,683,356.00
- Building Inspection Fund has a total accrued liability at: $2,305,503.00
- Water and Sewer has a total accrued liability at: $9,563,806.00
- Fire w/ $51,403,573 liability
- Police w/ $53,531,975 liability
- Library w/ $5,644,310 liability
- Town (all other employees not in own category) w/ $41,305,256 liability
" that the OPEB program consists of two pieces: a Normal Cost ( the cost of benefits earned each year should be accrued in that year) plus a Past Service Cost (a catch-up accrual to amortize the Unfunded Accrued Liability). THE ARC for FY 2018 is $14,694,136.00. "
NOW, I believe that it is Michigan law that the BENEFITS are to be paid in the year earned. How many years have gone by offering contracts to employees with benefits and then not securing those payments for the future need? The debt is staggering.
For the record: this OPEB VEBA Trust Fund does have ASSETS: Total: $6,339,197.00
- Water and Sewer employees have assets that came only from their funds
- Water and Sewer: $3,075,911
- The below funds came out of the general fund since 2005 and there were only 4 categories.
- Fire: $1,147,043
- Police: $1,194,583
- Town: $ 921,705
- Library: $ 0.
The two new employee categories in the July 1, 2016 Milliman Report really didn't exist as separate units at that time. However, the township has indicated since, that those 2 new employee categories will or do exist now and that the township expects to or have funded those two new categories with over one million dollars each:
- Cable Studio $1,300,000 listed in the budget notes for 2017-2018 FYI: this same budget shows a net ($1,578,302) for this Fund budget. Apparently surplus money allows the payment and still remaining in Cable Studio Fund with a balance of $3,726,931. So why are we paying such high cable bills?
- Building Inspection Fund $1,800,000 listed in the budget notes for 2017-2018
The next step may be the township will have to demand that the Library start making deposits into this Fund from their budget.
The big question is WHEN will the township budget money from the Fire, Police, and Town (all other employees)? How can the township budget these costs while giving all employees 2% raises in each year... 2013, 2014, 2015, 2016, 2017, 2018, 2019?
FYI to the Fire, Police, Library and Town categories: YOU only can be given money from this Trust that is an asset in YOUR category. The other funded departments are only for THEM.
The AAA rating the township brags about is very misleading. Has every account and debt been revealed to the taxpayers? Well, let's ask our Supervior and Financial Director and the Board of Trustees and the new AUDITOR, UHY, LLC. : " What is the real financial state of our township?" I think it is time for an extensive financial audit of all the accounts, or if need be, a forensic audit. Do the members of the FSC know about ALL financial matters? I intend to ask them tomorrow.
Marcia
Monday, April 10, 2017 @ 7:30 AM
Will you be there to ask questions or to listen?
MINUTES from Jan. 12, 2015
Note that the FSC was to meet quarterly. They have not. 5 times in 2015, 1 time in 2016 and one time in 2017
Wow! you are so informed about Bloomfield TWP.
ReplyDeleteThe taxpayers are lucky to have a watchdog like you.
Thanks for pointing out things that should be transparent to the public. After all the taxpayers deserve to know!