the-compact
Board Of Trustees Tuesday, July 28, 2026 · 153 min

Bloomfield Township Board of Trustees Meeting on July 27, 2026

Transcript

Click any timestamp to jump the video to that moment. Auto-transcribed; expect occasional errors on proper nouns.

  1. All right, welcome to the Bloomfield Township Board of Trustees meeting for Monday, July the 27th. If you'll stand for the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. Good evening and welcome everyone. We'll open it up with public comment, item number one, and we'll ask you to introduce yourself, your address. And keep your comment, if you would, to three minutes. We'd appreciate it. Hi, I'm Alice Wachell. I live at 1782 Maplewood. I've been a resident for 34 years. I'm president of the United Homeowners Associations of Bloomfield Township, active in the township for more than 70 years, with 45 homeowners associations as members. I'm here to talk about serious financial concerns in the township. Those concerns aren't just my opinion. They're reflected in the state of Michigan's own financial benchmarks. The state compares every township on the Michigan Community Financial Dashboard. Bloomfield Township ranks near the bottom of all townships in debt health, pension health, and other financial measures. We are literally last in the state on governmental net position ratio, a measure of our long-term financial strength and ability to pay future debt. Our retiree OPEB health care plan remains severely underfunded. Millions of dollars are diverted out of water and sewer through a variety of transfers. Last November, the general fund was about $16 million. short of the cash needed to meet payroll, yet the payroll was met. To this day, no one has explained where the money came from or whether the restricted water and sewer funds covered the shortfall. Fund positions are not published. The auditors now say that the financial statements inaccurately described how investment income was allocated for years. These are warning signs, not minor issues, yet this board has absolutely said nothing about them. For months, Trustee Mark Antockley has asked the board questions about the township's finances. He's been met with silence, dismissal, and ridicule. After receiving no answers, he submitted a 28-page letter to the Michigan Department of Treasury documenting roughly 40 concerns involving accounting, internal controls, budgeting, legal compliance, and financial oversight. How did this board respond? It didn't. The letter wasn't discussed publicly. It wasn't included in the last board packet nor this one. Instead, the public had it discovered on bloomfieldtransparency.org,

  2. a measure of our long-term financial strength and ability to pay future debt. Our retiree OPEB health care plan remains severely underfunded. Millions of dollars are diverted out of water and sewer through a variety of transfers. Last November, the general fund was about $16 million. short of the cash needed to meet payroll, yet the payroll was met. To this day, no one has explained where the money came from or whether the restricted water and sewer funds covered the shortfall. Fund positions are not published. The auditors now say that the financial statements inaccurately described how investment income was allocated for years. These are warning signs, not minor issues, yet this board has absolutely said nothing about them. For months, Trustee Mark Antockley has asked the board questions about the township's finances. He's been met with silence, dismissal, and ridicule. After receiving no answers, he submitted a 28-page letter to the Michigan Department of Treasury documenting roughly 40 concerns involving accounting, internal controls, budgeting, legal compliance, and financial oversight. How did this board respond? It didn't. The letter wasn't discussed publicly. It wasn't included in the last board packet nor this one. Instead, the public had it discovered on bloomfieldtransparency.org, a website created by a resident. Yet, at your last meeting, while those questions remained unanswered, this board was discussing spending $90 million in new township buildings, including approximately $25 million from the capital reserve funds that are questioned in the Treasury letter. Before spending another taxpayer dollar, shouldn't this board first determine whether those funds are there in the first place? Instead of spending more, why not reduce our pension debt? and repurpose existing space. That's basic fiscal responsibility. Instead, we're told everything's fine because Bloomfield Township has a AAA bond rating. A bond rating tells investors whether we will repay our debt based on our past performance. It doesn't tell us why one of Michigan's wealthiest communities ranks near the bottom in financial health. The Michigan benchmarks identify problems. Antocles letter examines what might be causing them. Residents are paying attention. We deserve answers. This board must discuss the Treasury letter publicly, explain the numbers, and fix the problems before committing money to new construction. Health, if you could wrap it up, please. We're at three minutes. Thank you. That's the job you were elected to do. Please do it.

  3. board packet nor this one. Instead, the public had it discovered on bloomfieldtransparency.org, a website created by a resident. Yet, at your last meeting, while those questions remained unanswered, this board was discussing spending $90 million in new township buildings, including approximately $25 million from the capital reserve funds that are questioned in the Treasury letter. Before spending another taxpayer dollar, shouldn't this board first determine whether those funds are there in the first place? Instead of spending more, why not reduce our pension debt? and repurpose existing space. That's basic fiscal responsibility. Instead, we're told everything's fine because Bloomfield Township has a AAA bond rating. A bond rating tells investors whether we will repay our debt based on our past performance. It doesn't tell us why one of Michigan's wealthiest communities ranks near the bottom in financial health. The Michigan benchmarks identify problems. Antocles letter examines what might be causing them. Residents are paying attention. We deserve answers. This board must discuss the Treasury letter publicly, explain the numbers, and fix the problems before committing money to new construction. Health, if you could wrap it up, please. We're at three minutes. Thank you. That's the job you were elected to do. Please do it. Mary Alice LaDuke, Bloomfield Township resident. It is interesting how the Bloomfield Township Board talks about transparency, but when it comes to areas where of eustication works in your favor, the transparency stops. The water and sewer budget is a prime example. There is no budget for water and sewer, a large $30 million fund. So there are a few ways for ratepayers to see the financial picture. Problem two, you justify not having a budget for a $30 million operation by saying that the state does not require it. Well, the ratepayers have been asking it for years. It's an ethical and transparency decision, but you refuse to publish a budget. Problem three, you provide limited information on income and expenses for water and sewer. Problem four, you use no-bid contractors. Problem five, you move interest from water and sewer to other areas of township operations instead of lowering the water and sewer rates. Problem six, there is way too much group think and group vote on this board. Most votes are 7-0 or 6-1. Critical thinking skills are missing. Problem seven, the water and sewer issues have been raised

  4. Mary Alice LaDuke, Bloomfield Township resident. It is interesting how the Bloomfield Township Board talks about transparency, but when it comes to areas where of eustication works in your favor, the transparency stops. The water and sewer budget is a prime example. There is no budget for water and sewer, a large $30 million fund. So there are a few ways for ratepayers to see the financial picture. Problem two, you justify not having a budget for a $30 million operation by saying that the state does not require it. Well, the ratepayers have been asking it for years. It's an ethical and transparency decision, but you refuse to publish a budget. Problem three, you provide limited information on income and expenses for water and sewer. Problem four, you use no-bid contractors. Problem five, you move interest from water and sewer to other areas of township operations instead of lowering the water and sewer rates. Problem six, there is way too much group think and group vote on this board. Most votes are 7-0 or 6-1. Critical thinking skills are missing. Problem seven, the water and sewer issues have been raised for over 10 years and little has changed. Mark is the only trustee asking questions. Problem seven, the cavalier thinking to impose water and sewer increases above and beyond the need when you are really moving money from water and sewer to other operational areas is a huge misapplication of the public's trust. Problem eight, your reliance on consultants who have to justify their fees but do not know the community in the many issues of water and sewer rates in Bloomfield Township. Problem nine, why is the water and sewer funded at 125% when other areas of Bloomfield Township finances are severely underfunded, so much so that we are near the bottom on state rankings? Problem 10, despite an enormous increase in taxable values, the township spends money excessively on salaries, benefits, and replacement equipment. Problem 11, elected officials and administrators' first line of thinking is to add a millage rather than to rein in... spending. Problem 12, Bloomfield Township's ranking on the Michigan Financial Dashboard shows very unhealthy markers on funding OPEB. The Bloomfield Township Board has some explaining to do, and the township residents are watching.

  5. for over 10 years and little has changed. Mark is the only trustee asking questions. Problem seven, the cavalier thinking to impose water and sewer increases above and beyond the need when you are really moving money from water and sewer to other operational areas is a huge misapplication of the public's trust. Problem eight, your reliance on consultants who have to justify their fees but do not know the community in the many issues of water and sewer rates in Bloomfield Township. Problem nine, why is the water and sewer funded at 125% when other areas of Bloomfield Township finances are severely underfunded, so much so that we are near the bottom on state rankings? Problem 10, despite an enormous increase in taxable values, the township spends money excessively on salaries, benefits, and replacement equipment. Problem 11, elected officials and administrators' first line of thinking is to add a millage rather than to rein in... spending. Problem 12, Bloomfield Township's ranking on the Michigan Financial Dashboard shows very unhealthy markers on funding OPEB. The Bloomfield Township Board has some explaining to do, and the township residents are watching. David Thomas Plout, Bloomfield Township resident. I came to the last meeting just to say thank you to Mike and Michael for resolving that Fox Hills issue. Everybody kind of win-win. Thank you for doing that. But on the financial stuff now, I have to say ditto to both of what these ladies said. And further, how did we get a $15 million total cost on water meter replacements when only $300,000 was budgeted? That really deserves an investigation. I believe there's several laws that have been violated there. And without bringing it back up for public discussion or public vote and saying, well, it was approved because it was buried in some rate increase, no, $15 million expenditure doesn't get buried in a rate increase. That goes right to their point. No transparency. And that may actually be illegal. I've run it through AI a few times, and every time it comes back and says it is illegal. Not only on a state level, but on a federal level. So I think you folks ought to review that and come clean with it. Next thing we're gonna look back here is this issue now.

  6. David Thomas Plout, Bloomfield Township resident. I came to the last meeting just to say thank you to Mike and Michael for resolving that Fox Hills issue. Everybody kind of win-win. Thank you for doing that. But on the financial stuff now, I have to say ditto to both of what these ladies said. And further, how did we get a $15 million total cost on water meter replacements when only $300,000 was budgeted? That really deserves an investigation. I believe there's several laws that have been violated there. And without bringing it back up for public discussion or public vote and saying, well, it was approved because it was buried in some rate increase, no, $15 million expenditure doesn't get buried in a rate increase. That goes right to their point. No transparency. And that may actually be illegal. I've run it through AI a few times, and every time it comes back and says it is illegal. Not only on a state level, but on a federal level. So I think you folks ought to review that and come clean with it. Next thing we're gonna look back here is this issue now. with the people. Why are we spending 15 million dollars on meters and does our cost go down as a community with those? No, not at all. In fact, the costs go up because there's an inherent fee in there for the internet and other uses. That's ridiculous. Who would make such a bet? Who would make such a, you guys have fiduciary responsibility to the community. How can you prove that? I mean, really, you guys are at risk for that. The lack of transparency in the sewer and water has been not an issue in this community since 2016. And you have had lawsuits on it and everything else going on because nobody's being transparent. Nobody's being transparent how the rates are set, what's driving the rates, what the true operating costs are, how many people it really takes to run the department. It's ridiculous. And to the repurposing of the buildings and that, I volunteered my services for that because we're, that's 15 million dollars on top of, what do we got, 153 million right now or 183 million debt in bonds? We didn't vote you guys to add to our debt load. When are we going to get our bonds

  7. with the people. Why are we spending 15 million dollars on meters and does our cost go down as a community with those? No, not at all. In fact, the costs go up because there's an inherent fee in there for the internet and other uses. That's ridiculous. Who would make such a bet? Who would make such a, you guys have fiduciary responsibility to the community. How can you prove that? I mean, really, you guys are at risk for that. The lack of transparency in the sewer and water has been not an issue in this community since 2016. And you have had lawsuits on it and everything else going on because nobody's being transparent. Nobody's being transparent how the rates are set, what's driving the rates, what the true operating costs are, how many people it really takes to run the department. It's ridiculous. And to the repurposing of the buildings and that, I volunteered my services for that because we're, that's 15 million dollars on top of, what do we got, 153 million right now or 183 million debt in bonds? We didn't vote you guys to add to our debt load. When are we going to get our bonds paid off? That's the real question. Yeah, if the building stuff is needed, fine. I'd love to have an indoor pool. I can't afford it. So. I'll do something else. That's the same position, the mentality, mindset that you folks should have. It's just not a very responsible way to spend the money. And the fact that everybody keeps saying, don't worry about the budget, we'll just get another millage. Well, we stopped the millage before, we can stop it again. Thank you. Any other public comment? If not, I'll close public comment and move to consider the consent agenda. I'd like to remove item A, item B, and item E. A, B, and E, Mark? Yep. OK. And we'll have a motion to approve. So moved. So moved by Chris, support by Val. All in favor say aye. Aye. Any opposed? Passes 7 to nothing. And Mark, we'll move A, B, and C to, we'll call it 5. AB and E. Oh, sorry. Thank you. AB and E. We'll move it to 5, AB and E. OK, item number three. Consider approval of the traffic control resolution for Hickory Grove Road,

  8. bonds? We didn't vote you guys to add to our debt load. When are we going to get our bonds paid off? That's the real question. Yeah, if the building stuff is needed, fine. I'd love to have an indoor pool. I can't afford it. So. I'll do something else. That's the same position, the mentality, mindset that you folks should have. It's just not a very responsible way to spend the money. And the fact that everybody keeps saying, don't worry about the budget, we'll just get another millage. Well, we stopped the millage before, we can stop it again. Thank you. Any other public comment? If not, I'll close public comment and move to consider the consent agenda. I'd like to remove item A, item B, and item E. A, B, and E, Mark? Yep. OK. And we'll have a motion to approve. So moved. So moved by Chris, support by Val. All in favor say aye. Aye. Any opposed? Passes 7 to nothing. And Mark, we'll move A, B, and C to, we'll call it 5. AB and E. Oh, sorry. Thank you. AB and E. We'll move it to 5, AB and E. OK, item number three. Consider approval of the traffic control resolution for Hickory Grove Road, presented by our Chief Jim Gallagher. Welcome, Jimmy. Hello there again. I believe in your board packet was a resolution in support of a new traffic control order for the subdivisions that we talked about many times in the past here. That subdivision would run east of Telegraph, north of Hickory Grove, between Telegraph and Losser, Hickory Grove and Square Lake Road. As I think I discussed in our last meeting, the subdivision has seen an enormous amount of traffic. That seems a lie. cut-throughs with about 38,000 vehicles in just a three-week period from our own traffic trailer. From the end of June, we did a traffic study, an official traffic study, and the traffic volumes were showing still extremely high. As part of that study, the National Transportation Safety Organization recommended that we install no left turn signs on Hickory Grove for all the entrance streets for a period of hours and then no right turn signs off of Square Lake Road. So we worked with the Oakland County Road Commission, Mark Mesler, being a great resource for us in this process, and they came up with the resolution you have in front, and our request is that you approve that request.

  9. Consider approval of the traffic control resolution for Hickory Grove Road, presented by our Chief Jim Gallagher. Welcome, Jimmy. Hello there again. I believe in your board packet was a resolution in support of a new traffic control order for the subdivisions that we talked about many times in the past here. That subdivision would run east of Telegraph, north of Hickory Grove, between Telegraph and Losser, Hickory Grove and Square Lake Road. As I think I discussed in our last meeting, the subdivision has seen an enormous amount of traffic. That seems a lie. cut-throughs with about 38,000 vehicles in just a three-week period from our own traffic trailer. From the end of June, we did a traffic study, an official traffic study, and the traffic volumes were showing still extremely high. As part of that study, the National Transportation Safety Organization recommended that we install no left turn signs on Hickory Grove for all the entrance streets for a period of hours and then no right turn signs off of Square Lake Road. So we worked with the Oakland County Road Commission, Mark Mesler, being a great resource for us in this process, and they came up with the resolution you have in front, and our request is that you approve that request. The hours on that would be from 6 a.m. to 10 a.m., and then 4 p.m. to 7 p.m. are the times that it would be enforced. And I know we have members of the community in support in the room today. Great. Thank you for being with us. Any questions? No. Just thank you for being so responsive to the residents' concerns, because I know we've talked about that quite a few times, and I get quite a few emails and calls about it. So I know you took care of it very quickly and appreciate it. The residents appreciate it. Yeah. A lot of credit goes to Mark as well and RCOC for listening to us. Yeah, no doubt. Yeah, and again, thank you to the residents for being patient. Again, sometimes it takes a while to go through some of the processes, but again, we have a solution, and hopefully it will reduce some of those call volumes. So thank you again for taking care of this. One last thing, and keep an eye on it. That's great. I hope you will share this with us. Thank you very much. If it doesn't help, then we'll need to try something else. So we'll keep an eye on it, too. Yeah, and there is language within this resolution that in the event that we find the hours are too long or not enough, that we have the ability to come back to the board without having to petition or to go back to the road commission so that we as a community can make the decisions on the timing on it. Okay, good. All right, I ask for a motion. So move. Support. Motion by Neal, support by Val. All in favor say aye. Aye. Aye. Any opposed? Pass the 7-0. Thank you. Thank you. Next slide.

  10. is that you approve that request. The hours on that would be from 6 a.m. to 10 a.m., and then 4 p.m. to 7 p.m. are the times that it would be enforced. And I know we have members of the community in support in the room today. Great. Thank you for being with us. Any questions? No. Just thank you for being so responsive to the residents' concerns, because I know we've talked about that quite a few times, and I get quite a few emails and calls about it. So I know you took care of it very quickly and appreciate it. The residents appreciate it. Yeah. A lot of credit goes to Mark as well and RCOC for listening to us. Yeah, no doubt. Yeah, and again, thank you to the residents for being patient. Again, sometimes it takes a while to go through some of the processes, but again, we have a solution, and hopefully it will reduce some of those call volumes. So thank you again for taking care of this. One last thing, and keep an eye on it. That's great. I hope you will share this with us. Thank you very much. If it doesn't help, then we'll need to try something else. So we'll keep an eye on it, too. Yeah, and there is language within this resolution that in the event that we find the hours are too long or not enough, that we have the ability to come back to the board without having to petition or to go back to the road commission so that we as a community can make the decisions on the timing on it. Okay, good. All right, I ask for a motion. So move. Support. Motion by Neal, support by Val. All in favor say aye. Aye. Aye. Any opposed? Pass the 7-0. Thank you. Thank you. Next slide. Thank you. Item number four, discuss township's strong financial position and S&P's reaffirmation of the township's AAA bond rating, presented by our treasurer, Michael Shostak. Michael. All right. Thank you. Sean's going to bring up my presentation. So there's been some discussion as of late surrounding our financial position, and I wanted to take the opportunity to address that. I'd like to thank Jason Teiss, our finance director, for working with me to gather all of this information. And so let's get to it. Sean, you want to go to the next slide? So the township is in an extremely strong financial position, probably the strongest position that it's been in in a long time, perhaps ever. wanting to put it on air. Maybe. However... It's like. It's like that. You meant to be an angel. We're one of only a handful of local governments with a AAA credit rating. Our reserves exceed our policy targets. We have long-term capital planning with funding set aside. We have a clean audit report every year. Our pension and OPEB liabilities are funded more than ever, and we are no longer considered

  11. Thank you. Item number four, discuss township's strong financial position and S&P's reaffirmation of the township's AAA bond rating, presented by our treasurer, Michael Shostak. Michael. All right. Thank you. Sean's going to bring up my presentation. So there's been some discussion as of late surrounding our financial position, and I wanted to take the opportunity to address that. I'd like to thank Jason Teiss, our finance director, for working with me to gather all of this information. And so let's get to it. Sean, you want to go to the next slide? So the township is in an extremely strong financial position, probably the strongest position that it's been in in a long time, perhaps ever. wanting to put it on air. Maybe. However... It's like. It's like that. You meant to be an angel. We're one of only a handful of local governments with a AAA credit rating. Our reserves exceed our policy targets. We have long-term capital planning with funding set aside. We have a clean audit report every year. Our pension and OPEB liabilities are funded more than ever, and we are no longer considered underfunded by the state as it relates to our OPEB financing, our OPEB liability. On the next slide, this is in relation to the memo that was referred to earlier. Frankly, the entire premise of the memo is flawed, beginning with the allegation that UHY flagged us or considered us for violations of manipulation of data, management override of controls. That comes from a boilerplate letter. That goes to every audit client from every auditor each year. And we have our auditors here tonight who will address that in more detail later. Many of the legal basis stated in the memo were inaccurate or misrepresented. It's also internally contradictory. We can't be both in financial distress and hoarding a financial reserve at the same time. We can't engage in concealment while we refer to our audit report and our general policies. Basically, in sum, this is a policy disagreement that is masquerading as evidence-

  12. Our pension and OPEB liabilities are funded more than ever, and we are no longer considered underfunded by the state as it relates to our OPEB financing, our OPEB liability. On the next slide, this is in relation to the memo that was referred to earlier. Frankly, the entire premise of the memo is flawed, beginning with the allegation that UHY flagged us or considered us for violations of manipulation of data, management override of controls. That comes from a boilerplate letter. That goes to every audit client from every auditor each year. And we have our auditors here tonight who will address that in more detail later. Many of the legal basis stated in the memo were inaccurate or misrepresented. It's also internally contradictory. We can't be both in financial distress and hoarding a financial reserve at the same time. We can't engage in concealment while we refer to our audit report and our general policies. Basically, in sum, this is a policy disagreement that is masquerading as evidence- of wrongdoing. So let's talk about our prudent fiscal oversight and that's not me stating it that's S&P Standard & Poor's which is the largest rating agency in the country that manages credit reports, bond ratings for not only every major corporation but also every government and in their most recent report which just came out this last Friday they reaffirmed our AAA credit rating. They said that we have consistently positive operating performance supporting our healthy reserves and liquidity. We have robust management practices and we have augmented our policy framework to sustain rolling long-term capital planning into our annual operating budget. We adhere to a reserve target of between 50 to 75 percent of our general fund expenditures and in fact we are at 89 percent well above our policy target or about 53.5 million as of the last fiscal year which is 25. The fiscal year 26 report hasn't been published yet but the fiscal year 25 report shows that we were

  13. of wrongdoing. So let's talk about our prudent fiscal oversight and that's not me stating it that's S&P Standard & Poor's which is the largest rating agency in the country that manages credit reports, bond ratings for not only every major corporation but also every government and in their most recent report which just came out this last Friday they reaffirmed our AAA credit rating. They said that we have consistently positive operating performance supporting our healthy reserves and liquidity. We have robust management practices and we have augmented our policy framework to sustain rolling long-term capital planning into our annual operating budget. We adhere to a reserve target of between 50 to 75 percent of our general fund expenditures and in fact we are at 89 percent well above our policy target or about 53.5 million as of the last fiscal year which is 25. The fiscal year 26 report hasn't been published yet but the fiscal year 25 report shows that we were at 89 percent of our operating revenue or 53.5 million dollars. So again this is not us saying that this is the largest credit rating agency in the country. On the next slide, in addition to S&P, we also receive clean audits from UHY, which is an international accounting firm. They have been auditing us for 10 years, during which time they have changed the partner in charge multiple times. They've rotated team members on and off the engagement. So there's different people looking at and conducting the audit throughout that 10 years. Each year we've received the highest rating, which is called an unmodified audit, meaning that they couldn't find any changes that needed to be made, and that our financial statements fairly and accurately represent the township's financial position. In addition, UHY also had a woman named Marlene, who was on their engagement team, who was a certified fraud examiner, and every year as they presented the audit findings, I asked Marlene if she found any evidence of any fraud or wrongdoing,

  14. report hasn't been published yet but the fiscal year 25 report shows that we were at 89 percent of our operating revenue or 53.5 million dollars. So again this is not us saying that this is the largest credit rating agency in the country. On the next slide, in addition to S&P, we also receive clean audits from UHY, which is an international accounting firm. They have been auditing us for 10 years, during which time they have changed the partner in charge multiple times. They've rotated team members on and off the engagement. So there's different people looking at and conducting the audit throughout that 10 years. Each year we've received the highest rating, which is called an unmodified audit, meaning that they couldn't find any changes that needed to be made, and that our financial statements fairly and accurately represent the township's financial position. In addition, UHY also had a woman named Marlene, who was on their engagement team, who was a certified fraud examiner, and every year as they presented the audit findings, I asked Marlene if she found any evidence of any fraud or wrongdoing, and each year, year after year, she said no. On the next slide, referring to interest earnings. So the claim is that the township diverts annual interest from the Water and Sewer Fund into the General Fund, which is in violation of, quote, interest follows principle, the Uniform Chart of Accounts, and GASB 34. The fact is that we are doing exactly what state law requires us to do. MCL 41.77, subsection 2, states that interest that accrues upon the deposit shall be paid into the general fund of the township. So we are following the statute very clearly on that one. If you go to the next slide, this is a copy of the statute, and I've highlighted there the section that says that the township board may provide by resolution for the depositing of money coming into the hands of the treasurer of the township, and the treasurer shall deposit the money in the financial institution the township board may direct. Interest that accrues upon the deposit shall be paid into the general fund of the township.

  15. presented the audit findings, I asked Marlene if she found any evidence of any fraud or wrongdoing, and each year, year after year, she said no. On the next slide, referring to interest earnings. So the claim is that the township diverts annual interest from the Water and Sewer Fund into the General Fund, which is in violation of, quote, interest follows principle, the Uniform Chart of Accounts, and GASB 34. The fact is that we are doing exactly what state law requires us to do. MCL 41.77, subsection 2, states that interest that accrues upon the deposit shall be paid into the general fund of the township. So we are following the statute very clearly on that one. If you go to the next slide, this is a copy of the statute, and I've highlighted there the section that says that the township board may provide by resolution for the depositing of money coming into the hands of the treasurer of the township, and the treasurer shall deposit the money in the financial institution the township board may direct. Interest that accrues upon the deposit shall be paid into the general fund of the township. This is straight out of MCL 41.77, subsection 2 of the state law. Basically, in not so many words, what it's saying is that the township treasurer is responsible for receiving all of the cash coming into the township, all of the revenue, and that as township treasurer, I'm responsible for depositing that money in a bank that is determined by this board, and any interest that accrues on that deposit shall be paid into the general fund of the township. So, on the next slide, I reference even more specifically the water and sewer funds. the water and sewer utility is owned by is owned by the township all of the funds of water and sewer are township funds therefore the township keeps all of the interest earned on cash deposits and according to MCL 41.77 subsection 2 all deposits are paid to the treasurer and the interest earned is paid into the general fund more specifically page 109 of the uniform chart of accounts which is published by

  16. Interest that accrues upon the deposit shall be paid into the general fund of the township. This is straight out of MCL 41.77, subsection 2 of the state law. Basically, in not so many words, what it's saying is that the township treasurer is responsible for receiving all of the cash coming into the township, all of the revenue, and that as township treasurer, I'm responsible for depositing that money in a bank that is determined by this board, and any interest that accrues on that deposit shall be paid into the general fund of the township. So, on the next slide, I reference even more specifically the water and sewer funds. the water and sewer utility is owned by is owned by the township all of the funds of water and sewer are township funds therefore the township keeps all of the interest earned on cash deposits and according to MCL 41.77 subsection 2 all deposits are paid to the treasurer and the interest earned is paid into the general fund more specifically page 109 of the uniform chart of accounts which is published by the department of the treasury of the state of michigan explicitly states that the cash and investments of the water and sewer fund are subject to the requirements of pa 20 of 1943 which is mcl 129.91 and that mcl dictates what i can and cannot invest the cash into which instruments and securities i can invest in that's what that is and it may be included in a pooled cash and investment account unless restricted by a bond ordinance or authorizing resolution which we don't have so according to the uniform chart of accounts the cash and investments of the water and sewer fund may be included in a pooled cash and investment account and as i stated previously all of the cash that comes in to the hands of the township treasurer is deposited in a bank determined by this board and all of the interest earned on that deposit is paid into the general fund On the next slide, I go into the detail as to where this, quote, interest follows principle, end quote, concept came from. And it comes from a lawsuit that was filed back in 1985 by the Grand Rapids School District against the city of Grand Rapids,

  17. general fund more specifically page 109 of the uniform chart of accounts which is published by the department of the treasury of the state of michigan explicitly states that the cash and investments of the water and sewer fund are subject to the requirements of pa 20 of 1943 which is mcl 129.91 and that mcl dictates what i can and cannot invest the cash into which instruments and securities i can invest in that's what that is and it may be included in a pooled cash and investment account unless restricted by a bond ordinance or authorizing resolution which we don't have so according to the uniform chart of accounts the cash and investments of the water and sewer fund may be included in a pooled cash and investment account and as i stated previously all of the cash that comes in to the hands of the township treasurer is deposited in a bank determined by this board and all of the interest earned on that deposit is paid into the general fund On the next slide, I go into the detail as to where this, quote, interest follows principle, end quote, concept came from. And it comes from a lawsuit that was filed back in 1985 by the Grand Rapids School District against the city of Grand Rapids, where basically they said that the city of Grand Rapids, who collects the school taxes, just like I collect the school taxes for Bloomfield Hills, Birmingham, Avondale, and Pontiac, I collect for four school districts, and I turn that money over to them twice a month, that the school district said that we should get the interest on our tax money. And the court agreed, and the court said in its decision that the rule is that interest follows principle and belongs to the taxing body. And so the state updated its uniform chart of accounts to say that, quote, interest follows principle, relating to funds that belong to another governmental unit, specifically property tax collections. So when we collect property tax or when any municipality collects property tax for a different governmental unit, so I collect not only for the school districts, I collect for the county, I collect for the state, I collect for the art museum, the zoo, Huron-Clinton Metro Parks, what am I missing, DIA? I said.

  18. And it comes from a lawsuit that was filed back in 1985 by the Grand Rapids School District against the city of Grand Rapids, where basically they said that the city of Grand Rapids, who collects the school taxes, just like I collect the school taxes for Bloomfield Hills, Birmingham, Avondale, and Pontiac, I collect for four school districts, and I turn that money over to them twice a month, that the school district said that we should get the interest on our tax money. And the court agreed, and the court said in its decision that the rule is that interest follows principle and belongs to the taxing body. And so the state updated its uniform chart of accounts to say that, quote, interest follows principle, relating to funds that belong to another governmental unit, specifically property tax collections. So when we collect property tax or when any municipality collects property tax for a different governmental unit, so I collect not only for the school districts, I collect for the county, I collect for the state, I collect for the art museum, the zoo, Huron-Clinton Metro Parks, what am I missing, DIA? I said. art museum right the art museum so what the intermediate school district the intermediate school that's part of the county okay yeah so state county all of the uh oh smart can't forget about smart um so all of those governmental agencies i collect the money from the residents but i turn it over to them because it's their money it's they've issued the call for the taxes so we turn it over to them but all of the other money that we collect whether it's property tax revenue for the township whether it's water and sewer funding whether it's building inspection fees anything that comes into the hands of the treasurer is deposited and the interest is to be paid into the general fund um moving forward there was discussion about the general fund being a structural deficit well a deficit under michigan law means a negative fund balance at year end so that the that fund think of fund balance is like the equity of a of a fund so it's the fund balance is the difference between assets liabilities deferred inflows and deferred outflows and so that's what's left over after all of the assets and liabilities are taken into account that's fund balance so a deficit

  19. art museum right the art museum so what the intermediate school district the intermediate school that's part of the county okay yeah so state county all of the uh oh smart can't forget about smart um so all of those governmental agencies i collect the money from the residents but i turn it over to them because it's their money it's they've issued the call for the taxes so we turn it over to them but all of the other money that we collect whether it's property tax revenue for the township whether it's water and sewer funding whether it's building inspection fees anything that comes into the hands of the treasurer is deposited and the interest is to be paid into the general fund um moving forward there was discussion about the general fund being a structural deficit well a deficit under michigan law means a negative fund balance at year end so that the that fund think of fund balance is like the equity of a of a fund so it's the fund balance is the difference between assets liabilities deferred inflows and deferred outflows and so that's what's left over after all of the assets and liabilities are taken into account that's fund balance so a deficit under michigan law is a negative fund balance um not a negative change in that position change in that position is the change in that fund balance each year so it's not the change that's negative it's the fund balance it's that has to be negative for it to be considered a deficit but you can't manufacture a structural deficit by assuming away revenue that is required under the law to be paid into the general fund and at the end of fiscal year 2025 the general fund closed its fund balance with approximately 16.8 million dollars well above our policy floor as I mentioned earlier we have a general fund policy and is not considered a deficit under Michigan law because it is positive it's a fund balance that is greater than zero when you look at across different funds between the general fund and the equipment and reserve fund equipment replacement fund rather we hold 39 million in discretionary reserves which would put us at a hundred and thirty percent of general fund revenue and you can't be structurally insolvent when you have a reserve of a hundred and thirty

  20. left over after all of the assets and liabilities are taken into account that's fund balance so a deficit under michigan law is a negative fund balance um not a negative change in that position change in that position is the change in that fund balance each year so it's not the change that's negative it's the fund balance it's that has to be negative for it to be considered a deficit but you can't manufacture a structural deficit by assuming away revenue that is required under the law to be paid into the general fund and at the end of fiscal year 2025 the general fund closed its fund balance with approximately 16.8 million dollars well above our policy floor as I mentioned earlier we have a general fund policy and is not considered a deficit under Michigan law because it is positive it's a fund balance that is greater than zero when you look at across different funds between the general fund and the equipment and reserve fund equipment replacement fund rather we hold 39 million in discretionary reserves which would put us at a hundred and thirty percent of general fund revenue and you can't be structurally insolvent when you have a reserve of a hundred and thirty percent of your annual general fund revenue moving forward pooled cash and investments do not conceal entry your liquidity issues so again there's this allegation regarding a 16 million dollar payroll gap from late 2025 which was a violation of MCL 141 point four thirty eight well When you look at 141.438, that law deals with the division of appropriations into allotments and judicial enforcement of the General Appropriations Act. It contains no prohibition or any mention, frankly, of restricted assets, liquidity backs ups, anything like that. The law, the citation is just wrong. The township's pooled investment account is expressly authorized by the Chart of Accounts and PA20, which is, again, what I can invest the funds in, so it allows for this pooled investment funds. And the reason that it allows for pooled investment funds, I think, is because when you pool the investments,

  21. can't be structurally insolvent when you have a reserve of a hundred and thirty percent of your annual general fund revenue moving forward pooled cash and investments do not conceal entry your liquidity issues so again there's this allegation regarding a 16 million dollar payroll gap from late 2025 which was a violation of MCL 141 point four thirty eight well When you look at 141.438, that law deals with the division of appropriations into allotments and judicial enforcement of the General Appropriations Act. It contains no prohibition or any mention, frankly, of restricted assets, liquidity backs ups, anything like that. The law, the citation is just wrong. The township's pooled investment account is expressly authorized by the Chart of Accounts and PA20, which is, again, what I can invest the funds in, so it allows for this pooled investment funds. And the reason that it allows for pooled investment funds, I think, is because when you pool the investments, you can invest in different types of assets that can provide for a higher return. So if we were to divide everything up and have smaller accounts, then you wouldn't be able to invest each of those individual accounts in different type of assets that would provide for a higher yield. So the goal is to provide for the highest possible yield, which is the earnings that we would get from the investments. And by pooling the assets and being able to invest in different types of assets that have different measures of liquidity, different terms and duration, you can maximize the yield that you earn. And that's why, you know, I think that they allow for this. And going to be there, that there's, that's, um... Um... Um... uh... property tax supported funds routinely draw down so we get our money our property tax money which is 70 of our budget we get that once per year and we get that between december 1st and february 14th um and then so we collect all of our taxes between december 1st and february 14th and then we use that tax money to cover bills for the rest of the year so between february 14th to the following december 1st we have that tax money that we save so obviously there's a cash

  22. And the reason that it allows for pooled investment funds, I think, is because when you pool the investments, you can invest in different types of assets that can provide for a higher return. So if we were to divide everything up and have smaller accounts, then you wouldn't be able to invest each of those individual accounts in different type of assets that would provide for a higher yield. So the goal is to provide for the highest possible yield, which is the earnings that we would get from the investments. And by pooling the assets and being able to invest in different types of assets that have different measures of liquidity, different terms and duration, you can maximize the yield that you earn. And that's why, you know, I think that they allow for this. And going to be there, that there's, that's, um... Um... Um... uh... property tax supported funds routinely draw down so we get our money our property tax money which is 70 of our budget we get that once per year and we get that between december 1st and february 14th um and then so we collect all of our taxes between december 1st and february 14th and then we use that tax money to cover bills for the rest of the year so between february 14th to the following december 1st we have that tax money that we save so obviously there's a cash cycle that as you move further away from february 14th the cash balance is going to go down um as we draw down against that um against that cash um and there is no there has been no time that we've had a negative cash balance at the end of a fiscal year um and therefore there has been no presentation of any negative cash balance or any kind of loan in the annual financial statements which is the only time that we're required to put a gap uh financial statement together and the generally accepted accounting principles and while utility cash is not restricted because a restricted cash means that it's a requirement or a restriction placed by a third party an external party we don't have any restrictions on our utility cash um by that definition so utility cash is not restricted um But either way, no utility assets have been expended for any non-utility purposes. Interest is derivative income. It's not actual earned income. So the Water and Sewer Fund has earned income from rates and other fees, but interest is not income.

  23. 14th to the following december 1st we have that tax money that we save so obviously there's a cash cycle that as you move further away from february 14th the cash balance is going to go down um as we draw down against that um against that cash um and there is no there has been no time that we've had a negative cash balance at the end of a fiscal year um and therefore there has been no presentation of any negative cash balance or any kind of loan in the annual financial statements which is the only time that we're required to put a gap uh financial statement together and the generally accepted accounting principles and while utility cash is not restricted because a restricted cash means that it's a requirement or a restriction placed by a third party an external party we don't have any restrictions on our utility cash um by that definition so utility cash is not restricted um But either way, no utility assets have been expended for any non-utility purposes. Interest is derivative income. It's not actual earned income. So the Water and Sewer Fund has earned income from rates and other fees, but interest is not income. It's derivative income. It comes from holding the cash. I could just as easily take the cash, put it into a checking account, and earn zero on it. And that would be fine, and that cash would be saved to be used on the costs of the Water and Sewer utility. There's no obligation to put that into interest earnings, into an interest-bearing account, but we do put it into an interest-bearing account because that provides an opportunity for us to put that cash to work while it's being saved prior to being used for any of the related activities. So interest is a derivative income, not an earned income. On the next slide, you see a schedule that I put together back in January of this year and provided it to the board at the January 26th Board of Trustees meeting. And at that point, I pointed out that you can see that in the December quarter of both 25 and 2024, our ledger shows a negative cash balance for public safety and roads.

  24. So the Water and Sewer Fund has earned income from rates and other fees, but interest is not income. It's derivative income. It comes from holding the cash. I could just as easily take the cash, put it into a checking account, and earn zero on it. And that would be fine, and that cash would be saved to be used on the costs of the Water and Sewer utility. There's no obligation to put that into interest earnings, into an interest-bearing account, but we do put it into an interest-bearing account because that provides an opportunity for us to put that cash to work while it's being saved prior to being used for any of the related activities. So interest is a derivative income, not an earned income. On the next slide, you see a schedule that I put together back in January of this year and provided it to the board at the January 26th Board of Trustees meeting. And at that point, I pointed out that you can see that in the December quarter of both 25 and 2024, our ledger shows a negative cash balance for public safety and roads. but there's if you combine those two there's still more than enough cash in the general fund to cover those numbers so we don't actively do a transfer on the books because that's all it would be is on the books in addition you see that there's something called the tax collection fund and the tax collection fund is where we put all of the taxes that we collect into that fund before they get distributed to the various taxing agencies so whether it's us as you know collecting our own property tax or whether that school district money county state whoever i'm collecting for it sits in that tax collection fund and then on the distribution date that money is then allocated out either to our funds excuse me or paid out to whichever taxing agency uh that money belongs to and the reason that you see such a large balance in the tax collection fund on december 31st is because we don't pay out we don't distribute that tax money to the taxing agencies until the first or second day of the following quarter so january 1st obviously is a holiday so that that there's no bank open we don't transfer any money but if january 2nd is a business day it would be

  25. but there's if you combine those two there's still more than enough cash in the general fund to cover those numbers so we don't actively do a transfer on the books because that's all it would be is on the books in addition you see that there's something called the tax collection fund and the tax collection fund is where we put all of the taxes that we collect into that fund before they get distributed to the various taxing agencies so whether it's us as you know collecting our own property tax or whether that school district money county state whoever i'm collecting for it sits in that tax collection fund and then on the distribution date that money is then allocated out either to our funds excuse me or paid out to whichever taxing agency uh that money belongs to and the reason that you see such a large balance in the tax collection fund on december 31st is because we don't pay out we don't distribute that tax money to the taxing agencies until the first or second day of the following quarter so january 1st obviously is a holiday so that that there's no bank open we don't transfer any money but if january 2nd is a business day it would be transferred on january 2nd if it's not whether it's the 3rd or the 4th whatever the first business day of the of the next month is that's when that payment is made and so the tax collection fund would be drawn down but of the tax collection fund money, more than a third of it is our township money, is our taxpayer money, which would be distributed out to the general fund, the public safety fund, the road fund, and all the other funds that collect property taxes. And so I showed that because it said, well, December 31st is the end of the quarter, and that's when we have to report, but the money doesn't get distributed until the beginning of the following month. So if I were to add columns to this chart that show January 2nd or January 3rd, you would see that $42 million spread across the general fund, the public safety fund, the road fund. So that cash is there, we're holding it. It's just by nature of the way that the state does their distribution dates, it's on the beginning of the month rather than the end of the month. It would seem more logical to do it at the end of the month, so to comply with quarterly reporting, but the state, you know, doesn't always do things logically, and so the tax payments are distributed at the beginning of the following month. But when you look at the total

  26. there's no bank open we don't transfer any money but if january 2nd is a business day it would be transferred on january 2nd if it's not whether it's the 3rd or the 4th whatever the first business day of the of the next month is that's when that payment is made and so the tax collection fund would be drawn down but of the tax collection fund money, more than a third of it is our township money, is our taxpayer money, which would be distributed out to the general fund, the public safety fund, the road fund, and all the other funds that collect property taxes. And so I showed that because it said, well, December 31st is the end of the quarter, and that's when we have to report, but the money doesn't get distributed until the beginning of the following month. So if I were to add columns to this chart that show January 2nd or January 3rd, you would see that $42 million spread across the general fund, the public safety fund, the road fund. So that cash is there, we're holding it. It's just by nature of the way that the state does their distribution dates, it's on the beginning of the month rather than the end of the month. It would seem more logical to do it at the end of the month, so to comply with quarterly reporting, but the state, you know, doesn't always do things logically, and so the tax payments are distributed at the beginning of the following month. But when you look at the total major funds, which are the general fund, public safety, road fund, tax collection fund, you see $47 million in cash at December 31st, 2025, $42 million at December 31st, 2024. So there is no cash shortfall. There's no, we're not bouncing checks. We're not, you know, all of that cash is there. It's just by nature of the construct of the accounting and the fact that the state doesn't distribute that tax money till the following month you know it's sitting in the tax collection fund rather than in the public safety fund and you see in the green box there the water and sewer funds that those are completely separate from any of the governmental funds governmental funds are funds that are our money and that are being used for governmental purposes so that's basically funded by tax money and you see that there's 78 million dollars in governmental funds and 16 million dollars in water and sewer funds so there is more than enough cash in the governmental funds to meet all of our obligations there's nothing being touched from the water and sewer fund and as I said this was presented and discussed at length at the January 26th

  27. payments are distributed at the beginning of the following month. But when you look at the total major funds, which are the general fund, public safety, road fund, tax collection fund, you see $47 million in cash at December 31st, 2025, $42 million at December 31st, 2024. So there is no cash shortfall. There's no, we're not bouncing checks. We're not, you know, all of that cash is there. It's just by nature of the construct of the accounting and the fact that the state doesn't distribute that tax money till the following month you know it's sitting in the tax collection fund rather than in the public safety fund and you see in the green box there the water and sewer funds that those are completely separate from any of the governmental funds governmental funds are funds that are our money and that are being used for governmental purposes so that's basically funded by tax money and you see that there's 78 million dollars in governmental funds and 16 million dollars in water and sewer funds so there is more than enough cash in the governmental funds to meet all of our obligations there's nothing being touched from the water and sewer fund and as I said this was presented and discussed at length at the January 26th board meeting this year I encourage you to go back and watch that video if you need a refresher next slide please so the state has determined that our OPEB is no longer in underfunded status the Michigan Department of Treasury reviews our annual report for the retirement systems both the pension fund and the OPEB fund applies their assumptions and then makes a determination as to whether or not we're considered underfunded according to Public Act 202 of 2017 which was the law that came in that mandated that we had to get to 40 percent on 40 funded status or that the percentage of our ADC exceeded 12 percent of our revenue and so the state has their assumptions that they use they take our data that we provide on form 5572 and they determine whether or not we are underfunded if we are underfunded which we were for a few years the municipal stability board which was created by PA 202 would review and approve our corrective action plan and that corrective action plan would say what are we doing

  28. and as I said this was presented and discussed at length at the January 26th board meeting this year I encourage you to go back and watch that video if you need a refresher next slide please so the state has determined that our OPEB is no longer in underfunded status the Michigan Department of Treasury reviews our annual report for the retirement systems both the pension fund and the OPEB fund applies their assumptions and then makes a determination as to whether or not we're considered underfunded according to Public Act 202 of 2017 which was the law that came in that mandated that we had to get to 40 percent on 40 funded status or that the percentage of our ADC exceeded 12 percent of our revenue and so the state has their assumptions that they use they take our data that we provide on form 5572 and they determine whether or not we are underfunded if we are underfunded which we were for a few years the municipal stability board which was created by PA 202 would review and approve our corrective action plan and that corrective action plan would say what are we doing proactively to increase the funding level of our retirement funds and so in 2025 treasury determined that we are no longer in underfunded status in our opet plan and that therefore no correction active no correction corrective action plan is required from us um and so that was the state department of treasury that determined that um on the next slide uh i'd like to address the community dashboard and for those of you that might remember 10 12 years ago we used to participate with this company called munetrix and munetrix was kind of the precursor to this community dashboard it's what their goal was was to take financial financial information from different municipalities standardize it and try to compare it the problem is that municipal accounting is not exactly cookie cutter and so you can slice things different ways and put things in different funds and accounts etc and it makes it very difficult to standardize and so for example we keep cash in

  29. and approve our corrective action plan and that corrective action plan would say what are we doing proactively to increase the funding level of our retirement funds and so in 2025 treasury determined that we are no longer in underfunded status in our opet plan and that therefore no correction active no correction corrective action plan is required from us um and so that was the state department of treasury that determined that um on the next slide uh i'd like to address the community dashboard and for those of you that might remember 10 12 years ago we used to participate with this company called munetrix and munetrix was kind of the precursor to this community dashboard it's what their goal was was to take financial financial information from different municipalities standardize it and try to compare it the problem is that municipal accounting is not exactly cookie cutter and so you can slice things different ways and put things in different funds and accounts etc and it makes it very difficult to standardize and so for example we keep cash in marketable securities and marketable securities means bonds CDs things like that that are not considered cash or cash equivalents but the community dashboard doesn't look at the marketable securities account they only look at the cash account and we try to keep as much of our cash in marketable securities because that's where we're earning the real return is in marketable securities in our in our bond portfolio in our CDs in our local government investment pools so and that's where the real return is generated and so we try to keep as much of our cash and marketable securities but the but both new metrics and now the Michigan community dashboard which is done which is set up by the Department of Treasury only looks at the cash account it does not look at marketable security so it's leaving out the bulk of our resources because they're not being included in that calculation so when it's trying to standardize it's actually doing us a disservice because it's not comparing apples to apples as you look across different municipalities in addition

  30. makes it very difficult to standardize and so for example we keep cash in marketable securities and marketable securities means bonds CDs things like that that are not considered cash or cash equivalents but the community dashboard doesn't look at the marketable securities account they only look at the cash account and we try to keep as much of our cash in marketable securities because that's where we're earning the real return is in marketable securities in our in our bond portfolio in our CDs in our local government investment pools so and that's where the real return is generated and so we try to keep as much of our cash and marketable securities but the but both new metrics and now the Michigan community dashboard which is done which is set up by the Department of Treasury only looks at the cash account it does not look at marketable security so it's leaving out the bulk of our resources because they're not being included in that calculation so when it's trying to standardize it's actually doing us a disservice because it's not comparing apples to apples as you look across different municipalities in addition we have a separate public safety fund we also have a separate road fund which many municipalities do not in many municipalities the public safety activities and the road activities are considered are put into the general fund they only have one fund that they keep track of everything in we do it separately and so when you're looking at general fund fund balance or net position whether it's per capita or you know or just in just the nominal number in general if you just look at our general fund it's actually a small slice of our total operations because we have account we have separate funds for road public safety cable building inspection we've got all of these different governmental funds when many communities just keep them consolidated into one fund and so again you're not comparing apples to apples when you're only looking at the general fund what's even more important i think to know is that the community dashboard is comparing us against all of the other townships in the state and the vast majority of the thousand townships in the state of michigan are small and rural they don't have many employees they don't do very many things in terms of

  31. we have a separate public safety fund we also have a separate road fund which many municipalities do not in many municipalities the public safety activities and the road activities are considered are put into the general fund they only have one fund that they keep track of everything in we do it separately and so when you're looking at general fund fund balance or net position whether it's per capita or you know or just in just the nominal number in general if you just look at our general fund it's actually a small slice of our total operations because we have account we have separate funds for road public safety cable building inspection we've got all of these different governmental funds when many communities just keep them consolidated into one fund and so again you're not comparing apples to apples when you're only looking at the general fund what's even more important i think to know is that the community dashboard is comparing us against all of the other townships in the state and the vast majority of the thousand townships in the state of michigan are small and rural they don't have many employees they don't do very many things in terms of government operations most of the small townships when you think of up north or in in the up or the western part of the state all of these small townships their counties provide all of their services the townships themselves don't provide the services so they don't have very many employees you know they don't have a big budget for example Southfield Township Southfield Township as you might know on our southern border consists of the villages of Franklin Bingham Farms and Beverly Hills well those villages do most of the services the Southfield Township exists only to handle elections and to collect the tax money so the entire budget of Southfield Township is 1 million dollars that's the entire budget they have maybe five or six full-time employees so that's who we're being compared against when you compare us against the townships in Michigan what we really should be compared against our municipalities that are similar in size and scope to up to us which would be things like Troy Novi Birmingham Southfield and then the township the other large township out there which are West Bloomfield Shelby and Clinton those are the other

  32. of michigan are small and rural they don't have many employees they don't do very many things in terms of government operations most of the small townships when you think of up north or in in the up or the western part of the state all of these small townships their counties provide all of their services the townships themselves don't provide the services so they don't have very many employees you know they don't have a big budget for example Southfield Township Southfield Township as you might know on our southern border consists of the villages of Franklin Bingham Farms and Beverly Hills well those villages do most of the services the Southfield Township exists only to handle elections and to collect the tax money so the entire budget of Southfield Township is 1 million dollars that's the entire budget they have maybe five or six full-time employees so that's who we're being compared against when you compare us against the townships in Michigan what we really should be compared against our municipalities that are similar in size and scope to up to us which would be things like Troy Novi Birmingham Southfield and then the township the other large township out there which are West Bloomfield Shelby and Clinton those are the other three really large city-like townships that exist but when you compare us to all of these other rural townships yeah our OPEB liability is going to be worse well that's because most of those townships don't have OPEB liabilities because they didn't have employees so they don't have an OPEB liability so if they have zero and we have a net a negative liability or a net liability then yeah we're going to be the worst but that's because we have you know 250 employees and 300 retirees. Most of these communities don't have any of that and so it's really a flawed comparison to try to use and we have told the Treasury Department this. We told Munetrics this in the past and they're just tunnel vision and how they do this. They want to say you're a township you get compared to townships and so that that's really it. So between the different methods of accounting and the different ways to organize your funding and also the fact that we're being compared to these rural townships the Michigan community dashboard is really not worth much of the salt that it's you know that it purports to be. So just to summarize and to close this out before I call up our auditors if you

  33. out there which are West Bloomfield Shelby and Clinton those are the other three really large city-like townships that exist but when you compare us to all of these other rural townships yeah our OPEB liability is going to be worse well that's because most of those townships don't have OPEB liabilities because they didn't have employees so they don't have an OPEB liability so if they have zero and we have a net a negative liability or a net liability then yeah we're going to be the worst but that's because we have you know 250 employees and 300 retirees. Most of these communities don't have any of that and so it's really a flawed comparison to try to use and we have told the Treasury Department this. We told Munetrics this in the past and they're just tunnel vision and how they do this. They want to say you're a township you get compared to townships and so that that's really it. So between the different methods of accounting and the different ways to organize your funding and also the fact that we're being compared to these rural townships the Michigan community dashboard is really not worth much of the salt that it's you know that it purports to be. So just to summarize and to close this out before I call up our auditors if you go to the last slide there Sean thank you. So who really has credibility on all of these issues? Who can speak with conviction about these issues? Well S&P Global Ratings as I said is one of the top international rating agencies. They look at financials for every government and every major corporation in this country and probably the world too. But they are the top credit rating agency and they give us a triple-A credit rating which is one of a handful in the entire state of Michigan that a local government has a triple-A credit rating. Oakland County has a triple-A credit rating. Okay the state of Michigan is not even a triple-A rated state. But we are a triple-A we are a triple-A rated local government because of all of the things that they review in our financials and in talking to us going over our long-term planning and I quoted before in an earlier slide what they've said about us so and as recently as last Friday they reaffirmed our AAA credit rating. UHY which is an international accounting and audit firm they have reviewed our financials and conducted our audit every year for the last 10 years and we always receive the highest rated audit an unmodified

  34. So just to summarize and to close this out before I call up our auditors if you go to the last slide there Sean thank you. So who really has credibility on all of these issues? Who can speak with conviction about these issues? Well S&P Global Ratings as I said is one of the top international rating agencies. They look at financials for every government and every major corporation in this country and probably the world too. But they are the top credit rating agency and they give us a triple-A credit rating which is one of a handful in the entire state of Michigan that a local government has a triple-A credit rating. Oakland County has a triple-A credit rating. Okay the state of Michigan is not even a triple-A rated state. But we are a triple-A we are a triple-A rated local government because of all of the things that they review in our financials and in talking to us going over our long-term planning and I quoted before in an earlier slide what they've said about us so and as recently as last Friday they reaffirmed our AAA credit rating. UHY which is an international accounting and audit firm they have reviewed our financials and conducted our audit every year for the last 10 years and we always receive the highest rated audit an unmodified opinion. Milliman is our nationally recognized actuarial expert that we rely on to go over our OPEB and pension liabilities so that we properly manage that and we can properly fund it because they tell us where we stand and how much the liabilities are and how much money we need to put in to manage those liabilities. We've had two law firms in the last 20 years Seacrest Whirl and now GMH who are experts in municipal law they know this stuff inside and out and they've advised us and have reviewed our procedures and our policies. Raftelis which is an expert in utility rate setting they have looked at us and said and seen how we've set our policies and advised us on how to set our rates. Somebody mentioned before a lawsuit well we were sued about 10 years ago for our rate setting policies and the court found in our favor and that we that demonstrated that we follow not only state law but best practices in rate setting that that that case we we were found completely not responsible or whatever it's called the acquitted or I

  35. audit every year for the last 10 years and we always receive the highest rated audit an unmodified opinion. Milliman is our nationally recognized actuarial expert that we rely on to go over our OPEB and pension liabilities so that we properly manage that and we can properly fund it because they tell us where we stand and how much the liabilities are and how much money we need to put in to manage those liabilities. We've had two law firms in the last 20 years Seacrest Whirl and now GMH who are experts in municipal law they know this stuff inside and out and they've advised us and have reviewed our procedures and our policies. Raftelis which is an expert in utility rate setting they have looked at us and said and seen how we've set our policies and advised us on how to set our rates. Somebody mentioned before a lawsuit well we were sued about 10 years ago for our rate setting policies and the court found in our favor and that we that demonstrated that we follow not only state law but best practices in rate setting that that that case we we were found completely not responsible or whatever it's called the acquitted or I know it wasn't a criminal case but what's what's the term vindicated thank you thank you we were vindicated in that Maximus is our cost allocation provider they're an expert in allocating costs across different activities in different departments the Michigan Department of Treasury which reviews our annual audit and also reviews our documentation to make sure that we are not underfunded in any of our retirement liabilities and as I said in 2025 the Department of Treasury said that we were no longer underfunded Jason Tice our finance director is a certified public finance officer one of only a handful that has that designation in the entire state and it's very rare to find somebody with that designation working for a local government most of them either work for the state or for a county like Oakland County which is a large county and a very complicated one so the fact that we have a certified public finance officer here is our finance director is a real blessing for us supervisor McCready who served on the Appropriations Committee in Lansing he's very familiar with budgets

  36. were found completely not responsible or whatever it's called the acquitted or I know it wasn't a criminal case but what's what's the term vindicated thank you thank you we were vindicated in that Maximus is our cost allocation provider they're an expert in allocating costs across different activities in different departments the Michigan Department of Treasury which reviews our annual audit and also reviews our documentation to make sure that we are not underfunded in any of our retirement liabilities and as I said in 2025 the Department of Treasury said that we were no longer underfunded Jason Tice our finance director is a certified public finance officer one of only a handful that has that designation in the entire state and it's very rare to find somebody with that designation working for a local government most of them either work for the state or for a county like Oakland County which is a large county and a very complicated one so the fact that we have a certified public finance officer here is our finance director is a real blessing for us supervisor McCready who served on the Appropriations Committee in Lansing he's very familiar with budgets how budgets work and setting budgets myself two advanced degrees in finance Wall Street experience corporate finance experience and a former finance professor so I know the ins and outs of both finance and accounting and I wanted to highlight Neil Barnett our trustee who's been on the board of trustees for 25 years and has worked through four different supervisors four different treasurers and two finance directors two finance directors and only two clerks no three clerks three clerks three clerks right three okay but 25 years of service on the board constantly looking at our policies reviewing our financials and so I think that it's important to note that that level of continuity and that level of experience with our financials provides you with the credibility to speak about our finances so at this point I want to call up UHY Amber and Josh John John not Josh okay John and they would like to speak to a few things in your packet you should have received a letter from them and they wanted to come and provide some

  37. how budgets work and setting budgets myself two advanced degrees in finance Wall Street experience corporate finance experience and a former finance professor so I know the ins and outs of both finance and accounting and I wanted to highlight Neil Barnett our trustee who's been on the board of trustees for 25 years and has worked through four different supervisors four different treasurers and two finance directors two finance directors and only two clerks no three clerks three clerks three clerks right three okay but 25 years of service on the board constantly looking at our policies reviewing our financials and so I think that it's important to note that that level of continuity and that level of experience with our financials provides you with the credibility to speak about our finances so at this point I want to call up UHY Amber and Josh John John not Josh okay John and they would like to speak to a few things in your packet you should have received a letter from them and they wanted to come and provide some additional color so I'll hand it off to you guys yeah so my name is Amber Sutter I'm the engagement partner I was on it this this year that's undergoing and then last year as well. So I just wanted to give you a little bit of background on what an audit is and kind of what we do, right? So our objective is to obtain reasonable assurance whether or not the financial statements as a whole are free from material misstatement, whether it's due to fraud or error in accordance with GAAP. You know, reasonable assurance is a high-level assurance, but it's not absolute, right? So there could be some things there that we didn't catch in our audit procedures. We perform our audit in accordance with our generally accepted accounting standards, and this includes providing professional skepticism and maintaining professional skepticism throughout our entire audit. We're identifying and assessing risks of material misstatement of the financial statements, such as the procedures of examining, we're testing on a test basis certain transactions regarding the amounts and the disclosures and the financial statements. We're also obtaining an understanding of our internal

  38. should have received a letter from them and they wanted to come and provide some additional color so I'll hand it off to you guys yeah so my name is Amber Sutter I'm the engagement partner I was on it this this year that's undergoing and then last year as well. So I just wanted to give you a little bit of background on what an audit is and kind of what we do, right? So our objective is to obtain reasonable assurance whether or not the financial statements as a whole are free from material misstatement, whether it's due to fraud or error in accordance with GAAP. You know, reasonable assurance is a high-level assurance, but it's not absolute, right? So there could be some things there that we didn't catch in our audit procedures. We perform our audit in accordance with our generally accepted accounting standards, and this includes providing professional skepticism and maintaining professional skepticism throughout our entire audit. We're identifying and assessing risks of material misstatement of the financial statements, such as the procedures of examining, we're testing on a test basis certain transactions regarding the amounts and the disclosures and the financial statements. We're also obtaining an understanding of our internal controls that are relevant to the audit so that we can develop that audit plan and design those procedures to be able to express the opinion on the financial statements, even though we're not expressing an opinion on the internal control procedures or internal control themselves. We have issued an unmodified opinion throughout these years. We have not had any findings associated with the internal control walkthroughs that we've done. In the . . . . . . . . . . . . . . . . . letter, they had talked about the risks that are identified. So we always have to send out a letter to those charged with governance. That comes at the beginning of the audit, and then a lot of times at the end, you'll get the closing audit letter. The letter really communicates the plan timing and scope of our audit, so basically everything that I just spoke about right now, along with what our significant risks are, which are always, almost always, management override of controls and then the risk of revenue recognition. So in our work, that doesn't necessarily mean that there is a risk there and we found something, right, with our management override of controls. These are just

  39. disclosures and the financial statements. We're also obtaining an understanding of our internal controls that are relevant to the audit so that we can develop that audit plan and design those procedures to be able to express the opinion on the financial statements, even though we're not expressing an opinion on the internal control procedures or internal control themselves. We have issued an unmodified opinion throughout these years. We have not had any findings associated with the internal control walkthroughs that we've done. In the . . . . . . . . . . . . . . . . . letter, they had talked about the risks that are identified. So we always have to send out a letter to those charged with governance. That comes at the beginning of the audit, and then a lot of times at the end, you'll get the closing audit letter. The letter really communicates the plan timing and scope of our audit, so basically everything that I just spoke about right now, along with what our significant risks are, which are always, almost always, management override of controls and then the risk of revenue recognition. So in our work, that doesn't necessarily mean that there is a risk there and we found something, right, with our management override of controls. These are just the risks that we develop around our audit procedures, and that's what was also discussed. So next item I want to touch base on is the independence conflict of interest. So Michael, you had mentioned, you know, yes, we've been auditors now for 10 years, but amongst, you know, along those 10 years, we've had four different engagement and partners that were on the account. Behind the scenes, there were three different quality review partners, and they come in at it totally, you know, not related to the engagement. They're looking at our significant assumptions and our conclusions on all of the work that we did and making sure that, you know, everything was good and there's no holes. or flaws in the work that we did. We've had no issues there. In addition, our firm is subject to periodic peer reviews and internal inspections. So that also helps kind of make sure that all of our procedures and our internal processes are working correctly and there's no issues there. So I wanted to just make sure that everyone is aware of there really isn't a conflict of interest or an issue of self-review. There's a lot of self-review. There's a lot of quality control reviews

  40. there and we found something, right, with our management override of controls. These are just the risks that we develop around our audit procedures, and that's what was also discussed. So next item I want to touch base on is the independence conflict of interest. So Michael, you had mentioned, you know, yes, we've been auditors now for 10 years, but amongst, you know, along those 10 years, we've had four different engagement and partners that were on the account. Behind the scenes, there were three different quality review partners, and they come in at it totally, you know, not related to the engagement. They're looking at our significant assumptions and our conclusions on all of the work that we did and making sure that, you know, everything was good and there's no holes. or flaws in the work that we did. We've had no issues there. In addition, our firm is subject to periodic peer reviews and internal inspections. So that also helps kind of make sure that all of our procedures and our internal processes are working correctly and there's no issues there. So I wanted to just make sure that everyone is aware of there really isn't a conflict of interest or an issue of self-review. There's a lot of self-review. There's a lot of quality control reviews that take place and procedures that we have in process. The next item I wanted to discuss was the forensic audit. In our opinion, in the things that we've done in our findings and our audits, there's nothing to indicate that no matters that came to our attention that would indicate that we would need or recommend to have a state-led forensic audit. And lastly, the investment policy, which was a topic of conversation. We agree with everything that Michael has said up there. You know, there was a sentence in the footnote that was not updated through the years, which is going to be updated this year. I'm not, you know, denying that by any means, but it, you know, the financial statements are the townships. And, you know, we all looked at those statements and we all ticked and tied every number and we did all of our auditing procedures behind that and one sentence was not updated. it's not which we're going to get that corrected. But just generally speaking, the policies and the internal policies that have been set up by the township,

  41. There's a lot of quality control reviews that take place and procedures that we have in process. The next item I wanted to discuss was the forensic audit. In our opinion, in the things that we've done in our findings and our audits, there's nothing to indicate that no matters that came to our attention that would indicate that we would need or recommend to have a state-led forensic audit. And lastly, the investment policy, which was a topic of conversation. We agree with everything that Michael has said up there. You know, there was a sentence in the footnote that was not updated through the years, which is going to be updated this year. I'm not, you know, denying that by any means, but it, you know, the financial statements are the townships. And, you know, we all looked at those statements and we all ticked and tied every number and we did all of our auditing procedures behind that and one sentence was not updated. it's not which we're going to get that corrected. But just generally speaking, the policies and the internal policies that have been set up by the township, we are in agreement with how they are allocating the interests, and we find no issues with them at all. Does anyone have any other questions on anything? I do. I'm here for... Was the inaccurate statement over all years? I'm sorry? Was the inaccurate note in the audited financials incorrect for all years? I would have to take a look back, but I know for the past three, two years, I believe it was in there. Okay. I would like to know why the 2018 investment income was $70,785. The 2017 was $128,000. And 37, the 2016 was $45,328. And the 2015 was $48,163. Those are all considerably higher than it is now. And at a time where investment was significantly lower. Cash in bank was getting less than 1%. Bond returns were significantly lower, and those numbers are there. I think that's going to be able to make my investment in the market. I think that's a good thing. But I think that's going to be worth it. I think that's a good point.

  42. But just generally speaking, the policies and the internal policies that have been set up by the township, we are in agreement with how they are allocating the interests, and we find no issues with them at all. Does anyone have any other questions on anything? I do. I'm here for... Was the inaccurate statement over all years? I'm sorry? Was the inaccurate note in the audited financials incorrect for all years? I would have to take a look back, but I know for the past three, two years, I believe it was in there. Okay. I would like to know why the 2018 investment income was $70,785. The 2017 was $128,000. And 37, the 2016 was $45,328. And the 2015 was $48,163. Those are all considerably higher than it is now. And at a time where investment was significantly lower. Cash in bank was getting less than 1%. Bond returns were significantly lower, and those numbers are there. I think that's going to be able to make my investment in the market. I think that's a good thing. But I think that's going to be worth it. I think that's a good point. I would also, so did you look at those numbers or no? The numbers that you just said, no. I mean, without having all the financial statements in front of me and taking a look at what the investment. So you didn't evaluate when the policy, if a policy changed? The base of your questions. From 2018 or prior? Yeah. I mean, based on what you're asking me is why the numbers changed. Is that what your question is? Or is the question, when did the investment policy change? Yeah. So, I mean, if there was a note, it looks like there was investment income. That would mean there was a policy change. And you haven't identified any of that in your response. At the end of the day, you have a lot of things. There were 40 things, I believe, in your letter, right? A lot of those items are outside the scope of my financial statement audit. As I just explained, the work that we go through and what we look at, right? So whether or not there was a policy change back in 2018, 2016, I'd have to go back and look through my audit files. But off the top of my head, I do not know. Okay. Because, again, if the requirement is that there's no policy and they can keep the money

  43. I would also, so did you look at those numbers or no? The numbers that you just said, no. I mean, without having all the financial statements in front of me and taking a look at what the investment. So you didn't evaluate when the policy, if a policy changed? The base of your questions. From 2018 or prior? Yeah. I mean, based on what you're asking me is why the numbers changed. Is that what your question is? Or is the question, when did the investment policy change? Yeah. So, I mean, if there was a note, it looks like there was investment income. That would mean there was a policy change. And you haven't identified any of that in your response. At the end of the day, you have a lot of things. There were 40 things, I believe, in your letter, right? A lot of those items are outside the scope of my financial statement audit. As I just explained, the work that we go through and what we look at, right? So whether or not there was a policy change back in 2018, 2016, I'd have to go back and look through my audit files. But off the top of my head, I do not know. Okay. Because, again, if the requirement is that there's no policy and they can keep the money and there clearly was a policy, then the items weren't checked. And the procedures that you mentioned were in place weren't checked and validate. We don't know. We don't have any corrective action, either from, and we don't even know why it was missed. None of that has been explained to us. Well, I don't think it was hidden. Yeah, I don't think it was out in plain sight in the financial statements that you reviewed, right? Right, and it's always been a practice, and it's always legal under the law that Michael stated in his presentation. So I'm not sure what you're fishing for, Mark, other than they're updating their policies and procedures, which is a normal practice. Yes, which is fine, but we did have investment income, and it's clear that there was a policy at one point, and the auditors haven't identified when that changed, and they have not identified in their policy and procedures why the note wasn't changed at that time. I really don't know how important that is, though. I mean, we're in such good shape. I served on the Bankruptcy Legislative Committee in Lansing, and if you could see the condition of many other municipalities, it'd be a great eye-opener for you, because some of those statements

  44. Because, again, if the requirement is that there's no policy and they can keep the money and there clearly was a policy, then the items weren't checked. And the procedures that you mentioned were in place weren't checked and validate. We don't know. We don't have any corrective action, either from, and we don't even know why it was missed. None of that has been explained to us. Well, I don't think it was hidden. Yeah, I don't think it was out in plain sight in the financial statements that you reviewed, right? Right, and it's always been a practice, and it's always legal under the law that Michael stated in his presentation. So I'm not sure what you're fishing for, Mark, other than they're updating their policies and procedures, which is a normal practice. Yes, which is fine, but we did have investment income, and it's clear that there was a policy at one point, and the auditors haven't identified when that changed, and they have not identified in their policy and procedures why the note wasn't changed at that time. I really don't know how important that is, though. I mean, we're in such good shape. I served on the Bankruptcy Legislative Committee in Lansing, and if you could see the condition of many other municipalities, it'd be a great eye-opener for you, because some of those statements I just listened to are so inaccurate. You really got to go look at other communities, other townships. There's 1,800 municipalities in the state of Michigan, and I think, Mark, in your letter you quoted, we're at 89. I'll take it. Well, let's... And if you want to go on a fishing expedition, you're good at it. Keep going. But, Jason, will you come up for a minute? I've got to ask you a question about our debt. Well, I'm not done asking any questions. Well, hang on just a second. We'll come right back to you, okay? Because I want to clarify something. Jason, will you come up here for a second? I'll come right back to you, Mark, okay? Jason, Mr. Thomas... as mentioned, we have, what, $183 million worth of debt. Can you clarify our debt and where it stands today? And take out, use SADs too, because SADs represent, what, about $43 million? Yeah, and the number I'm thinking of off the top of my head, which would exclude water and sewer debt as well, is before even backing out the special assessment road bonds, I want to say it's $92 million. Again, I would want to verify that, but it's not $183 or whatever the number was stated. Right, and then in what, 2030 and then 2033, we take off how much? The biggest drop-off, between 80% and 90% will be, again,

  45. of many other municipalities, it'd be a great eye-opener for you, because some of those statements I just listened to are so inaccurate. You really got to go look at other communities, other townships. There's 1,800 municipalities in the state of Michigan, and I think, Mark, in your letter you quoted, we're at 89. I'll take it. Well, let's... And if you want to go on a fishing expedition, you're good at it. Keep going. But, Jason, will you come up for a minute? I've got to ask you a question about our debt. Well, I'm not done asking any questions. Well, hang on just a second. We'll come right back to you, okay? Because I want to clarify something. Jason, will you come up here for a second? I'll come right back to you, Mark, okay? Jason, Mr. Thomas... as mentioned, we have, what, $183 million worth of debt. Can you clarify our debt and where it stands today? And take out, use SADs too, because SADs represent, what, about $43 million? Yeah, and the number I'm thinking of off the top of my head, which would exclude water and sewer debt as well, is before even backing out the special assessment road bonds, I want to say it's $92 million. Again, I would want to verify that, but it's not $183 or whatever the number was stated. Right, and then in what, 2030 and then 2033, we take off how much? The biggest drop-off, between 80% and 90% will be, again, if you exclude these newer road SADs that are being funded by the parcels, petitioning them, between 80% and 90% of that will be paid off around 2032, 2033, mostly because of the 2007 township campus project, which was a 25-year bond, and then the pension obligation bonds, that was $80 million over 20 years. Right, so those are real numbers. Okay, clarify that. Thank you, Mark. I'm sorry to interrupt you, but I wanted to get back to this, to that point, but go ahead, pick up where you left off. Okay, can you go back to the slide in the presentation? Alright, thanks to everybody, the Presenter and Employee Media. I had the opportunity to look through the presentation. Just a brief expedition. regarding the dashboard slide, please. I can use this one. It's further up. So this slide, I think, is very important because when you look at $21,007, less 12, less 1, that means the general fund was below the starting balance at the beginning of the year.

  46. The biggest drop-off, between 80% and 90% will be, again, if you exclude these newer road SADs that are being funded by the parcels, petitioning them, between 80% and 90% of that will be paid off around 2032, 2033, mostly because of the 2007 township campus project, which was a 25-year bond, and then the pension obligation bonds, that was $80 million over 20 years. Right, so those are real numbers. Okay, clarify that. Thank you, Mark. I'm sorry to interrupt you, but I wanted to get back to this, to that point, but go ahead, pick up where you left off. Okay, can you go back to the slide in the presentation? Alright, thanks to everybody, the Presenter and Employee Media. I had the opportunity to look through the presentation. Just a brief expedition. regarding the dashboard slide, please. I can use this one. It's further up. So this slide, I think, is very important because when you look at $21,007, less 12, less 1, that means the general fund was below the starting balance at the beginning of the year. And the township board was never notified. What are you talking about? The $21,000,000. I'm talking about 12, 31, 24, correct, Mark? Yes. So if you subtract those numbers out, that means the general fund, which is the only fund that can be used to make payments for public safety and road, was below $16,000,000. That's our starting balance. We were at a negative balance two months at this point. If you backtrack two weeks and you pull out the expenses, we're still below the $16,000,000. For me, that's a problem. What $16,000,000 are you talking about? The $16,000,000 starting fund balance in the general fund. Yeah, but that wasn't in 2023. Fiscal 24 began on April 1st of 2023. Oh, so it was less? Well, I don't know what it was. I don't have that audit in front of me. He's quoting the 12-31-24 on general fund. I'm sorry. The fiscal year would have started at 4-1-24 is when the fiscal year began.

  47. at the beginning of the year. And the township board was never notified. What are you talking about? The $21,000,000. I'm talking about 12, 31, 24, correct, Mark? Yes. So if you subtract those numbers out, that means the general fund, which is the only fund that can be used to make payments for public safety and road, was below $16,000,000. That's our starting balance. We were at a negative balance two months at this point. If you backtrack two weeks and you pull out the expenses, we're still below the $16,000,000. For me, that's a problem. What $16,000,000 are you talking about? The $16,000,000 starting fund balance in the general fund. Yeah, but that wasn't in 2023. Fiscal 24 began on April 1st of 2023. Oh, so it was less? Well, I don't know what it was. I don't have that audit in front of me. He's quoting the 12-31-24 on general fund. I'm sorry. The fiscal year would have started at 4-1-24 is when the fiscal year began. So I don't know that it was $16 million on 4-1-24. It was probably less because it goes up a little bit every year, but it's still we were dipping into our fund reserves to make payment obligations. Now, that's never been reflected anywhere in the meeting notes or anywhere in the meetings that we've had, and that's been happening over the last several years. Now, when we pull out the $25 million on the new bond payments, that means all those balances are going to drop. And what money is... What are you talking about? The $25 million that we're going to talk about that is being proposed to be removed. Right. That's on part of this. It says that would be in the total major funds. Oh, no, I'm sorry. That would be in the other governmental funds. So the other governmental funds, if you drop that, that's $4 million left, if it was $20 million at that time. So there's not a lot of cash left. And what are the actual fund balances prior to that occurring? And were any of the townships restricted funds, restricted millages, restricted enterprise price funds?

  48. The fiscal year would have started at 4-1-24 is when the fiscal year began. So I don't know that it was $16 million on 4-1-24. It was probably less because it goes up a little bit every year, but it's still we were dipping into our fund reserves to make payment obligations. Now, that's never been reflected anywhere in the meeting notes or anywhere in the meetings that we've had, and that's been happening over the last several years. Now, when we pull out the $25 million on the new bond payments, that means all those balances are going to drop. And what money is... What are you talking about? The $25 million that we're going to talk about that is being proposed to be removed. Right. That's on part of this. It says that would be in the total major funds. Oh, no, I'm sorry. That would be in the other governmental funds. So the other governmental funds, if you drop that, that's $4 million left, if it was $20 million at that time. So there's not a lot of cash left. And what are the actual fund balances prior to that occurring? And were any of the townships restricted funds, restricted millages, restricted enterprise price funds? funds used to make those payments. Enterprise funds are not restricted. But you're talking about the millages for public safety. You're talking about public safety and roads? That's restricted. Those are restricted. Yes, and so is safety path. So isn't the cable? No, cable doesn't get taxed. So the PEG fees are not restricted? Well PEG fees are restricted to capital expenses only. The building inspection those are all fee based. That's restricted. It's not restricted. No. So then why do we have $4 million in it? $4 million in what? The fund balance? The fund balance is $4 million. Because we never used it up. It's reserved. Well it's been going up in the last five years. And it went down for many years during the recession. Right. And so we're leaving it in there in case we do up in So the issue is that if we go into another recession where there isn't home building and there isn't construction we're not going to have all that permit revenue. Right. And so that's what it's there to cushion. And it's also there to cushion the general fund until we collect taxes. No, the general fund has

  49. funds used to make those payments. Enterprise funds are not restricted. But you're talking about the millages for public safety. You're talking about public safety and roads? That's restricted. Those are restricted. Yes, and so is safety path. So isn't the cable? No, cable doesn't get taxed. So the PEG fees are not restricted? Well PEG fees are restricted to capital expenses only. The building inspection those are all fee based. That's restricted. It's not restricted. No. So then why do we have $4 million in it? $4 million in what? The fund balance? The fund balance is $4 million. Because we never used it up. It's reserved. Well it's been going up in the last five years. And it went down for many years during the recession. Right. And so we're leaving it in there in case we do up in So the issue is that if we go into another recession where there isn't home building and there isn't construction we're not going to have all that permit revenue. Right. And so that's what it's there to cushion. And it's also there to cushion the general fund until we collect taxes. No, the general fund has $21.8 million in it at 1231-24. So where did the funds come from to pay public safety and road? Out of the general fund. Correct. So you went into a negative balance position. the Board of Trustees. Where's our negative balance position? What are you talking about? 21 minus 12 is what? 9. 9. 20 minus an additional 1. 80. Okay. What did the township start with? I don't know what it started with on 4-1-24. Okay. If it started with 14 million, that means you're dipping into the beginning reserve. Well, first of all, you're confusing two different things. You're confusing fund balance with cash balance. And if the cash balance, let's just hypothetically say was 14. And I don't have that number with me. But actually, you know what? I probably do. Because this audit would show the 24 numbers. But it's higher, you know, it's at 12-31-24, we had $21.8 million in cash in the general fund. And then that's more than enough to cover the public safety fund and the road fund for two days until the tax collection fund distributed

  50. No, the general fund has $21.8 million in it at 1231-24. So where did the funds come from to pay public safety and road? Out of the general fund. Correct. So you went into a negative balance position. the Board of Trustees. Where's our negative balance position? What are you talking about? 21 minus 12 is what? 9. 9. 20 minus an additional 1. 80. Okay. What did the township start with? I don't know what it started with on 4-1-24. Okay. If it started with 14 million, that means you're dipping into the beginning reserve. Well, first of all, you're confusing two different things. You're confusing fund balance with cash balance. And if the cash balance, let's just hypothetically say was 14. And I don't have that number with me. But actually, you know what? I probably do. Because this audit would show the 24 numbers. But it's higher, you know, it's at 12-31-24, we had $21.8 million in cash in the general fund. And then that's more than enough to cover the public safety fund and the road fund for two days until the tax collection fund distributed the tax money. Right. Because Michael explained earlier that on January 2nd or 3rd, whatever the first business day is, there is an influx of cash. And it's not represented on the 3rd and 1st. I'm not disputing that. What I'm saying is we're dipping in to reserves during the financial year that the general fund and the Board of Trustees was never notified. No, I don't think that's accurate. Jason, can you come up to the microphone, please? I think we'll have to go back and revisit this. We're using cash balance that's on our balance sheet to cover the payments until the next year's taxes get paid that cash is there but as soon as the bills go out we start getting paid right away people start coming in right away Jason can you help answer Mark's question I know we've answered this before but let's revisit it I can try so I agree with everything the treasurer has been saying the only thing I can add is I think there's just confusion on difference between cash balances reserves fund balance fund equity net position and when is the proper time to record those things and I can just say and I'm sure the auditors can back me up that the regulations and GASB requirements and gap are only concerned with making sure at your fiscal year end you are reporting

  51. public safety fund and the road fund for two days until the tax collection fund distributed the tax money. Right. Because Michael explained earlier that on January 2nd or 3rd, whatever the first business day is, there is an influx of cash. And it's not represented on the 3rd and 1st. I'm not disputing that. What I'm saying is we're dipping in to reserves during the financial year that the general fund and the Board of Trustees was never notified. No, I don't think that's accurate. Jason, can you come up to the microphone, please? I think we'll have to go back and revisit this. We're using cash balance that's on our balance sheet to cover the payments until the next year's taxes get paid that cash is there but as soon as the bills go out we start getting paid right away people start coming in right away Jason can you help answer Mark's question I know we've answered this before but let's revisit it I can try so I agree with everything the treasurer has been saying the only thing I can add is I think there's just confusion on difference between cash balances reserves fund balance fund equity net position and when is the proper time to record those things and I can just say and I'm sure the auditors can back me up that the regulations and GASB requirements and gap are only concerned with making sure at your fiscal year end you are reporting your activities for the year in entirety in the way that they want it presented fund balance does not change except one time a year and that's at the end of the fiscal year when all activities are settled all revenues recorded receivables payables expenditures everything's being done you close the fiscal year that's when your fund balance changes is not treated like a cash cash account or bank account that as the activities going through your your adding to on a daily basis or monthly or even quarterly or subtracting from so if Mark is getting at us, how low would our general fund get to at any point in time? What would be the lowest we've seen? The general fund cash balance? Cash balance, thank you. Cash balance. Cash balance, I think the Treasury has addressed that. I mean, it's on the chart right there. That's the, on December 31st is getting... Well, let's tell the audience what that number is. Well, okay. So if you look at quarter by quarter, it went from 21 to 30 to 16 to 17 to 23. That's the cash balance at each quarter end in the general fund.

  52. gap are only concerned with making sure at your fiscal year end you are reporting your activities for the year in entirety in the way that they want it presented fund balance does not change except one time a year and that's at the end of the fiscal year when all activities are settled all revenues recorded receivables payables expenditures everything's being done you close the fiscal year that's when your fund balance changes is not treated like a cash cash account or bank account that as the activities going through your your adding to on a daily basis or monthly or even quarterly or subtracting from so if Mark is getting at us, how low would our general fund get to at any point in time? What would be the lowest we've seen? The general fund cash balance? Cash balance, thank you. Cash balance. Cash balance, I think the Treasury has addressed that. I mean, it's on the chart right there. That's the, on December 31st is getting... Well, let's tell the audience what that number is. Well, okay. So if you look at quarter by quarter, it went from 21 to 30 to 16 to 17 to 23. That's the cash balance at each quarter end in the general fund. Right. That's as low as we've had. So where did the money come from to pay those bills for public safety and road? The general fund. The general fund, we move money over when they need it. Well, actually, that's not the case. That's not what's shown in the quarterly reports. In the quarterly reports, it's a negative balance for public safety. There's no negative balance on the quarterly reports. So unless there's... Trying to think... The quarterly reports don't show cash balance. It shows... Fund balance. No, it doesn't show fund balance. It shows the income and expenses as compared to budget. It's a budget to actual report, which is what is required for us to, as a board, review every quarter. Budget to actual... Would Mark be looking at the fact that we have to move money over? So he's looking at the negative until we move it over, maybe? Well, I don't know what he's looking at. I'm telling you, this is a cash balance chart. This is not part of the quarterly report. The quarterly report... Quarterly report is a budget to actual report. It shows what we've collected and what we've spent as compared to our approved budget. I'm just trying to figure out where you're seeing the negative though. Well the negative 12 million. That means if you have a negative 12 million, that means they got a loan.

  53. That's the cash balance at each quarter end in the general fund. Right. That's as low as we've had. So where did the money come from to pay those bills for public safety and road? The general fund. The general fund, we move money over when they need it. Well, actually, that's not the case. That's not what's shown in the quarterly reports. In the quarterly reports, it's a negative balance for public safety. There's no negative balance on the quarterly reports. So unless there's... Trying to think... The quarterly reports don't show cash balance. It shows... Fund balance. No, it doesn't show fund balance. It shows the income and expenses as compared to budget. It's a budget to actual report, which is what is required for us to, as a board, review every quarter. Budget to actual... Would Mark be looking at the fact that we have to move money over? So he's looking at the negative until we move it over, maybe? Well, I don't know what he's looking at. I'm telling you, this is a cash balance chart. This is not part of the quarterly report. The quarterly report... Quarterly report is a budget to actual report. It shows what we've collected and what we've spent as compared to our approved budget. I'm just trying to figure out where you're seeing the negative though. Well the negative 12 million. That means if you have a negative 12 million, that means they got a loan. If you have a negative 12 million dollar balance, that means a loan. It came from the general fund. The general fund and the rest of the governmental funds have more than enough cash. Did you take it out of the general fund in the quarterly report? The quarterly report is a budget to actual, it is not a cash report, it is a budget to actual. I have no idea how that 12 million was paid and you can't explain to me where that cash came from. How many times can I just say it? I think you don't agree with it, Mark. I think just to clarify, this is going to be a little bit more technical, but essentially that 21 million is a pooled cash account. So between those three funds, you can use those funds anywhere, right? So essentially, as of year end, they're owed that much money from the pooled cash account. It's all shared. What I'm seeing, it's clearly positive as of 12, 31, 24 and 25 because you have to take out those two negative balances. That would give you your cash balance. Now, your change in that position, your actual fund balance, that's not really associated with what you're seeing here. That's a whole separate schedule. Now, your quarterly reports from...

  54. That means if you have a negative 12 million, that means they got a loan. If you have a negative 12 million dollar balance, that means a loan. It came from the general fund. The general fund and the rest of the governmental funds have more than enough cash. Did you take it out of the general fund in the quarterly report? The quarterly report is a budget to actual, it is not a cash report, it is a budget to actual. I have no idea how that 12 million was paid and you can't explain to me where that cash came from. How many times can I just say it? I think you don't agree with it, Mark. I think just to clarify, this is going to be a little bit more technical, but essentially that 21 million is a pooled cash account. So between those three funds, you can use those funds anywhere, right? So essentially, as of year end, they're owed that much money from the pooled cash account. It's all shared. What I'm seeing, it's clearly positive as of 12, 31, 24 and 25 because you have to take out those two negative balances. That would give you your cash balance. Now, your change in that position, your actual fund balance, that's not really associated with what you're seeing here. That's a whole separate schedule. Now, your quarterly reports from... what I'm hearing are your like expenses and revenue only so this is a balance sheet only schedule so this is not even related to your quarterly reports exactly just to clarify so this is an overview so but again what money are they allowed to use they're allowed to use anything in the poor cash count so so they can use water and sewer to pay it no so the general fund well wait a minute to clarify well yes talking about interest from water and sewer no we're not talking about interest we're talking about cash cash yeah there yeah it is township water sir funds are not restricted they are township cash any township cash can be used to satisfy the bill that's the simplest way to put it but we don't need to because there's more than enough cash in the general fund and to cover it so it's that's why I highlighted the water is that a true statement water and sewer can be used to pay public safety towns can be used to fund these insufficient fund balances I'm seeing up here yes and if just a further sewer can be used to pay for public if they're included in the poor cash count that's the key question it's not it's township it's now it's my policies that are

  55. what I'm hearing are your like expenses and revenue only so this is a balance sheet only schedule so this is not even related to your quarterly reports exactly just to clarify so this is an overview so but again what money are they allowed to use they're allowed to use anything in the poor cash count so so they can use water and sewer to pay it no so the general fund well wait a minute to clarify well yes talking about interest from water and sewer no we're not talking about interest we're talking about cash cash yeah there yeah it is township water sir funds are not restricted they are township cash any township cash can be used to satisfy the bill that's the simplest way to put it but we don't need to because there's more than enough cash in the general fund and to cover it so it's that's why I highlighted the water is that a true statement water and sewer can be used to pay public safety towns can be used to fund these insufficient fund balances I'm seeing up here yes and if just a further sewer can be used to pay for public if they're included in the poor cash count that's the key question it's not it's township it's now it's my policies that are director Tice we're gonna say thank you to further clarify those statements that's in reference to cash and pooled cash and investments not revenues and expenditures all of our revenues and expenditures that we're booking are allocated and recorded in the proper fund they go to no matter if you have that cash available at that same point or day in time or to cover those or not if your revenues and expenses are going to the right funds we're we're you can have the cash coming out while it's being floated but the the each fund has its own revenues being recorded and expenditure so water and sewer is not recording in its ledger expenses of the general fund you won't find wages or benefit costs from a police officer in the water and sewer fund or vice versa okay and then i want to clarify one other thing mark can i take a break from this for a minute sure okay thank you noah can you come up for a second mr thomas made a comment about the cost of water meters maybe you have that or jason has i think mr thomas said that we spent 15 million dollars on water meters versus what 300 000 you said was voted on i'll have to do an overview of

  56. township it's now it's my policies that are director Tice we're gonna say thank you to further clarify those statements that's in reference to cash and pooled cash and investments not revenues and expenditures all of our revenues and expenditures that we're booking are allocated and recorded in the proper fund they go to no matter if you have that cash available at that same point or day in time or to cover those or not if your revenues and expenses are going to the right funds we're we're you can have the cash coming out while it's being floated but the the each fund has its own revenues being recorded and expenditure so water and sewer is not recording in its ledger expenses of the general fund you won't find wages or benefit costs from a police officer in the water and sewer fund or vice versa okay and then i want to clarify one other thing mark can i take a break from this for a minute sure okay thank you noah can you come up for a second mr thomas made a comment about the cost of water meters maybe you have that or jason has i think mr thomas said that we spent 15 million dollars on water meters versus what 300 000 you said was voted on i'll have to do an overview of the project but it's not near 15 million we were kind of batting it around back there i'll do an overview of it and a project overview for you right now we're not buying any meters we're only paying to have the meters installed into homes right so but i i'll dig that the number up we bought them over two years ago to get the the pricing the bulk price on it yeah and how far along are we on the water meter we'll complete it this year yeah good and how much has it saved residents do you spec using these new water meters? Tough to tell. You know, we have had cases, tens and twenties of cases, where they've had overages that have been caught by the new system. I think our treasurer can speak firsthand on this. I wish I had that meter when I got a $6,000 water bill. I had a third. I had my third issue. And what it was, was I was watering. It's been dry. And I shut the hose nozzle off and forgot to turn the tap off. And the next day I got this thing, you have a leak. And a leak is considered over a gallon an hour with a new meter. This is the third one. The other ones were like plumbing toilet issues that we had no clue. But this one just happened two days ago.

  57. dollars on water meters versus what 300 000 you said was voted on i'll have to do an overview of the project but it's not near 15 million we were kind of batting it around back there i'll do an overview of it and a project overview for you right now we're not buying any meters we're only paying to have the meters installed into homes right so but i i'll dig that the number up we bought them over two years ago to get the the pricing the bulk price on it yeah and how far along are we on the water meter we'll complete it this year yeah good and how much has it saved residents do you spec using these new water meters? Tough to tell. You know, we have had cases, tens and twenties of cases, where they've had overages that have been caught by the new system. I think our treasurer can speak firsthand on this. I wish I had that meter when I got a $6,000 water bill. I had a third. I had my third issue. And what it was, was I was watering. It's been dry. And I shut the hose nozzle off and forgot to turn the tap off. And the next day I got this thing, you have a leak. And a leak is considered over a gallon an hour with a new meter. This is the third one. The other ones were like plumbing toilet issues that we had no clue. But this one just happened two days ago. And I thought, well, now what? What's leaking now? And it was my own fault. And I went out and went to turn the hose on and it already was on. And I could see the water was under pressure and leaking around where it comes to the tap. And it was telling me because the pressure was leaking more than two gallons an hour, even though the hose wasn't running on the other end. So, I mean, something as simple and frankly stupid as that, you know, I turned the nozzle off, but forgot to crank the water off all the way. I was losing over two gallons an hour. And the next day, it reports every, is it four hours or there's a lag. The next morning it says, you have a new leak. And I was like, really? I'm going to, you know, come every front. So I'm like energía in the divisionalERS are Punk to theACHnee review. And I'll see you next time. The third one, but those add up. Thank you, Val. Thank you. And, Noah, thank you. So we'll get... And it's really the accuracy of the reading. We'll correct that. We'll get that corrected for you. Okay? Thank you. Thanks, Noah. Any other questions for our UHY? UHY questions, Mark? Okay. The Uniform Chart of Accounts. We first heard water and sewer was an enterprise fund. Now we're saying that it's a pooled cash. That's two different things. Two different things. Yeah.

  58. But this one just happened two days ago. And I thought, well, now what? What's leaking now? And it was my own fault. And I went out and went to turn the hose on and it already was on. And I could see the water was under pressure and leaking around where it comes to the tap. And it was telling me because the pressure was leaking more than two gallons an hour, even though the hose wasn't running on the other end. So, I mean, something as simple and frankly stupid as that, you know, I turned the nozzle off, but forgot to crank the water off all the way. I was losing over two gallons an hour. And the next day, it reports every, is it four hours or there's a lag. The next morning it says, you have a new leak. And I was like, really? I'm going to, you know, come every front. So I'm like energía in the divisionalERS are Punk to theACHnee review. And I'll see you next time. The third one, but those add up. Thank you, Val. Thank you. And, Noah, thank you. So we'll get... And it's really the accuracy of the reading. We'll correct that. We'll get that corrected for you. Okay? Thank you. Thanks, Noah. Any other questions for our UHY? UHY questions, Mark? Okay. The Uniform Chart of Accounts. We first heard water and sewer was an enterprise fund. Now we're saying that it's a pooled cash. That's two different things. Two different things. Yeah. And the township can use the water and sewer cash to pay any bill they want at any time? If it's in a pooled cash account, the money can be used anywhere. Yes. Go ahead, Mark. Go ahead. Tony, do you want to answer that? I just want to make sure that we clarify because that's an attempt at a trick question and it's not availing in any way. The water and sewer fund will be closed out with every single penny allocated to the water sewer fund. All of its revenue will be properly used. Some of the money from it is put into the pooled cash account which is a totally separate and distinct thing solely for purposes of making sure we maximize our investment on all of the cash that the township has. But water and sewer funds, the water sewer fund will never be used for general fund expenses. Period. And we've said that many times. Yes. Yes. Okay. Yes. And, um, I- under GASB 34 enterprises funds, those are allowed to be pooled and invested separately. So we have in our OPEP documents,

  59. And the township can use the water and sewer cash to pay any bill they want at any time? If it's in a pooled cash account, the money can be used anywhere. Yes. Go ahead, Mark. Go ahead. Tony, do you want to answer that? I just want to make sure that we clarify because that's an attempt at a trick question and it's not availing in any way. The water and sewer fund will be closed out with every single penny allocated to the water sewer fund. All of its revenue will be properly used. Some of the money from it is put into the pooled cash account which is a totally separate and distinct thing solely for purposes of making sure we maximize our investment on all of the cash that the township has. But water and sewer funds, the water sewer fund will never be used for general fund expenses. Period. And we've said that many times. Yes. Yes. Okay. Yes. And, um, I- under GASB 34 enterprises funds, those are allowed to be pooled and invested separately. So we have in our OPEP documents, water and sewers considered an enterprise fund. Building inspection is considered an enterprise fund. And okay. No, that's part of our general fund. It's a governmental fund. Then why is it considered an enterprise fund on OPEP? It says it right on the OPEP Milliman report. I think you might be misinterpreting it. So I think this highlights one point I wanted to make, Mark, which is I read your materials you submitted, and thanks for taking the time to share your thoughts with us in writing, finally, rather than just bringing it up here. And in your opening sentence of the memo, you state that as a trustee, you have, quote, a statutory fiduciary duty to investigate and study important issues affecting the township. Well, on that point, I completely agree, 100%. But Mark, not once have you accepted our repeated invitations to come into the township, meet with elected officials, meet with the subject matter experts, and have some of these profound misunderstandings discussed. Through it. You know, and- Did you say not once? Material- Material- Not once? Information there. Not once if you accept our invitation to come-

  60. So we have in our OPEP documents, water and sewers considered an enterprise fund. Building inspection is considered an enterprise fund. And okay. No, that's part of our general fund. It's a governmental fund. Then why is it considered an enterprise fund on OPEP? It says it right on the OPEP Milliman report. I think you might be misinterpreting it. So I think this highlights one point I wanted to make, Mark, which is I read your materials you submitted, and thanks for taking the time to share your thoughts with us in writing, finally, rather than just bringing it up here. And in your opening sentence of the memo, you state that as a trustee, you have, quote, a statutory fiduciary duty to investigate and study important issues affecting the township. Well, on that point, I completely agree, 100%. But Mark, not once have you accepted our repeated invitations to come into the township, meet with elected officials, meet with the subject matter experts, and have some of these profound misunderstandings discussed. Through it. You know, and- Did you say not once? Material- Material- Not once? Information there. Not once if you accept our invitation to come- I have come in and I have discussed things with you and I've asked you questions. Your particular concerns at the moment, what I'm talking about is an opportunity to come in and meet with the treasurer, meet with the finance director, meet with other people and talk about these sorts of things in detail so we don't have to debate about what the definition of certain financial words are. But let me say, I mean, the invitation still stands. We'll spend time with you in the office to discuss these questions any time that you can fit in that we can all work out. And so, you know, please take us up on that. Again, I prefer to discuss them in an open session. Well, you can't hijack all the meetings for these silly questions. We've gone over them and over and over them. Again, I don't think the questions are silly. Well, once they're repeated, doing the same thing and expecting a different result, Well, you know, it's an unexpected comment. Well, let me go through the remaining questions that I do have regarding the OPEP funding. We do not have a water and sewer budget. We only approve revenue. So I would like to know why it's appropriate for payments above what was approved in the corrective action plan to be made from water and sewer into OPEP.

  61. I have come in and I have discussed things with you and I've asked you questions. Your particular concerns at the moment, what I'm talking about is an opportunity to come in and meet with the treasurer, meet with the finance director, meet with other people and talk about these sorts of things in detail so we don't have to debate about what the definition of certain financial words are. But let me say, I mean, the invitation still stands. We'll spend time with you in the office to discuss these questions any time that you can fit in that we can all work out. And so, you know, please take us up on that. Again, I prefer to discuss them in an open session. Well, you can't hijack all the meetings for these silly questions. We've gone over them and over and over them. Again, I don't think the questions are silly. Well, once they're repeated, doing the same thing and expecting a different result, Well, you know, it's an unexpected comment. Well, let me go through the remaining questions that I do have regarding the OPEP funding. We do not have a water and sewer budget. We only approve revenue. So I would like to know why it's appropriate for payments above what was approved in the corrective action plan to be made from water and sewer into OPEP. So I think we've made it to be a lot easier. I would like to know why it's already enough to come up because of the fact that we've done a lot. Let's move through. Once the side of the right side of the right side that we've got to keep in the right side of the right side. We have over $1.4 million that was paid in above it. Okay, Jason's going to help us come up and answer the question for you, Mark. That's not a question. That should be addressed to the auditors. Well, it's a budget item, so why wouldn't it be addressed by the auditors? If we only budget $2 million or $1.5 million in contributions and we claim everything else is a benefit payment, that does not pass through the OPEP account. And that's contrary to what's being presented by the auditors. I would like to understand why. I don't agree with those statements, so I'll just speak to what I know is true, and that is we make contributions based on input from the board, the actuarial reports, discussions with our actuary, the expert, our financial advisors, our treasurer. We followed the PA-202, so that's the state providing feedback as well,

  62. So I would like to know why it's appropriate for payments above what was approved in the corrective action plan to be made from water and sewer into OPEP. So I think we've made it to be a lot easier. I would like to know why it's already enough to come up because of the fact that we've done a lot. Let's move through. Once the side of the right side of the right side that we've got to keep in the right side of the right side. We have over $1.4 million that was paid in above it. Okay, Jason's going to help us come up and answer the question for you, Mark. That's not a question. That should be addressed to the auditors. Well, it's a budget item, so why wouldn't it be addressed by the auditors? If we only budget $2 million or $1.5 million in contributions and we claim everything else is a benefit payment, that does not pass through the OPEP account. And that's contrary to what's being presented by the auditors. I would like to understand why. I don't agree with those statements, so I'll just speak to what I know is true, and that is we make contributions based on input from the board, the actuarial reports, discussions with our actuary, the expert, our financial advisors, our treasurer. We followed the PA-202, so that's the state providing feedback as well, and we have been on a payment plan to do a minimum of $1.25 million. That is one contributing factor to us not being underfunded according to PA-202, effective last year. The Water and Sewer Fund is the only enterprise fund we have in true accounting speak, and that one. being a full accrual versus a modified accrual basis, that one we would have to follow for actual contribution of new funds into the trust, the amount of the ADC that is actually in that plan for, and so that was $50,000 I believe the last couple years and the most recent fiscal year, I think the actual report said zero, so there was no contribution. So beyond that, I don't know, we discussed this multiple times as well and I don't know where else to go with that. Jason, wasn't the corrective action plan that we were under inclusive of both the $1.25 million cash contribution to the trust, but also contingent on us continuing to fund the benefits out of the operating budget,

  63. We followed the PA-202, so that's the state providing feedback as well, and we have been on a payment plan to do a minimum of $1.25 million. That is one contributing factor to us not being underfunded according to PA-202, effective last year. The Water and Sewer Fund is the only enterprise fund we have in true accounting speak, and that one. being a full accrual versus a modified accrual basis, that one we would have to follow for actual contribution of new funds into the trust, the amount of the ADC that is actually in that plan for, and so that was $50,000 I believe the last couple years and the most recent fiscal year, I think the actual report said zero, so there was no contribution. So beyond that, I don't know, we discussed this multiple times as well and I don't know where else to go with that. Jason, wasn't the corrective action plan that we were under inclusive of both the $1.25 million cash contribution to the trust, but also contingent on us continuing to fund the benefits out of the operating budget, so that that $1.25 million would continue to grow the trust rather than depleting it through the benefit payments? Correct. Unlike the pension fund, where the pension fund benefits are paid out of the pension trust because that's pretty close to fully funded. Right, and when we were in the legislature, part of Governor Snyder's initiative was to help the OPEB with the, we started this dashboard for all communities, and we had the grand bargain back in 2013, and just to kind of reminisce a little bit here, the city of Detroit needed help with their pensions, and they had thousands of people on pensions, but they weren't big pensions, you know, most of them probably. $20,000, $25,000 a year, but they had no money set aside for the health care. And that's a big issue for people to have that health care. And so when they started looking across the state and looking at communities that didn't have money set aside for pensions, much less OPEP, we realized the state's on the hook for all the pensions. If you read in a fine print of the state constitution, the state guarantees all municipal pensions, but they didn't guarantee OPEP, the benefit side. So the idea was we have to start putting money aside.

  64. so that that $1.25 million would continue to grow the trust rather than depleting it through the benefit payments? Correct. Unlike the pension fund, where the pension fund benefits are paid out of the pension trust because that's pretty close to fully funded. Right, and when we were in the legislature, part of Governor Snyder's initiative was to help the OPEB with the, we started this dashboard for all communities, and we had the grand bargain back in 2013, and just to kind of reminisce a little bit here, the city of Detroit needed help with their pensions, and they had thousands of people on pensions, but they weren't big pensions, you know, most of them probably. $20,000, $25,000 a year, but they had no money set aside for the health care. And that's a big issue for people to have that health care. And so when they started looking across the state and looking at communities that didn't have money set aside for pensions, much less OPEP, we realized the state's on the hook for all the pensions. If you read in a fine print of the state constitution, the state guarantees all municipal pensions, but they didn't guarantee OPEP, the benefit side. So the idea was we have to start putting money aside. Many communities, like the township, like the city of Bloomington Hills, bonded for their pensions to get up to speed. And with the market growth, we've been able to be successful and we're 96% funded now in our pension, Jason? 89% pension. Okay, about 90%. As of the last year, but we haven't gotten the final numbers for this past year yet. Right, but we've been fortunate with that. And when will that bond be done? It's coming up soon, isn't it? Well, the pension bonds, yeah, 20, 32, 33. Right, but the OPEPs are different because this is health care benefits. And probably back whenever we were doing it on a day-to-day basis, paying it. But now, because of the market and the investing and we've had the cash flow, we've been able to get our OPEB up to 39% funded. Most recently, 36%. I think it's going to be at jumping up from the prior year. All right. All right. 20 29 or 30 okay which is a which is a big increase and remember every year we have a handful of retirees that add to this cost that we have to adjust for which makes it harder to keep up right and the township got out of the pension business back in was it 2005 and then pension

  65. So the idea was we have to start putting money aside. Many communities, like the township, like the city of Bloomington Hills, bonded for their pensions to get up to speed. And with the market growth, we've been able to be successful and we're 96% funded now in our pension, Jason? 89% pension. Okay, about 90%. As of the last year, but we haven't gotten the final numbers for this past year yet. Right, but we've been fortunate with that. And when will that bond be done? It's coming up soon, isn't it? Well, the pension bonds, yeah, 20, 32, 33. Right, but the OPEPs are different because this is health care benefits. And probably back whenever we were doing it on a day-to-day basis, paying it. But now, because of the market and the investing and we've had the cash flow, we've been able to get our OPEB up to 39% funded. Most recently, 36%. I think it's going to be at jumping up from the prior year. All right. All right. 20 29 or 30 okay which is a which is a big increase and remember every year we have a handful of retirees that add to this cost that we have to adjust for which makes it harder to keep up right and the township got out of the pension business back in was it 2005 and then pension 2005 2011 was retiree health care right right and so having served on that legislative committee and at the time we kind of went by different communities our our community is in such great financial situation we're very fortunate because of the high values we have but there's many out there that are still struggling to get by that are still under state oversight and they will be for some time and again i'll remind you it's the state that's on the hook for these pensions if a municipality can't pay them but it's but not opep so kind of just give you a little background of why we got there and in 2017 that's when we voted in it was a p202 so kind of lived it saw it firsthand and go to lansing try and fight for money for bloomfield township when we're in this kind of situation it's very difficult you know because you have to help out these other communities first and foremost okay so um this is from the actuary report on the township website um in the financial financial year ending march 31 2021 the benefit payment for water and sewer was 28 200

  66. up right and the township got out of the pension business back in was it 2005 and then pension 2005 2011 was retiree health care right right and so having served on that legislative committee and at the time we kind of went by different communities our our community is in such great financial situation we're very fortunate because of the high values we have but there's many out there that are still struggling to get by that are still under state oversight and they will be for some time and again i'll remind you it's the state that's on the hook for these pensions if a municipality can't pay them but it's but not opep so kind of just give you a little background of why we got there and in 2017 that's when we voted in it was a p202 so kind of lived it saw it firsthand and go to lansing try and fight for money for bloomfield township when we're in this kind of situation it's very difficult you know because you have to help out these other communities first and foremost okay so um this is from the actuary report on the township website um in the financial financial year ending march 31 2021 the benefit payment for water and sewer was 28 200 $585,881 but the contribution was $530,249 and for the year ending March 22 the benefit payment was $301,691 and the contribution from water and sewer was $565,016. the contribution in full was never approved by the board because there's no budget for water and sewer I would like to know how those were authorized and why the audit didn't catch it over 1.4 million dollars from 2018 to 2024 I believe were moved out above benefit payments and above what the board authorized in the corrective action plan and that's what I'm asking you want to answer that Jason or again I don't I don't think you have any comment yeah I don't have any comment on that I don't know what more I can say right we could continue the analysis being done is the 2 million is there from the general fund right the 1.25 million in

  67. $585,881 but the contribution was $530,249 and for the year ending March 22 the benefit payment was $301,691 and the contribution from water and sewer was $565,016. the contribution in full was never approved by the board because there's no budget for water and sewer I would like to know how those were authorized and why the audit didn't catch it over 1.4 million dollars from 2018 to 2024 I believe were moved out above benefit payments and above what the board authorized in the corrective action plan and that's what I'm asking you want to answer that Jason or again I don't I don't think you have any comment yeah I don't have any comment on that I don't know what more I can say right we could continue the analysis being done is the 2 million is there from the general fund right the 1.25 million in all those years was going in and the additional contribution was never approved by the board and I'm asking why the auditors haven't reviewed that I think any that's not true yeah that's not contributions are within the budget or approved by the board so and that's why in a prior conversation I can all be together and have documents in front of us rather than you just bringing stuff up out of the blue it impedes a meaningful conversation but maybe that's your purpose but no I'm coming to the office and talk about it fairly I have brought it up at that stand in public comment multiple times before I was elected to the board but now I'm asking those same questions and the contributions are over what was a approved in the budget meetings and I'm asking how does that approval transfer to water and sewer if it's not included and it's over that dollar value that was in the corrective action plan approved by I don't think we'd agree with your statement and I will make another point to you mark is in in some of these departments we're gonna see a larger amount of retirees than in other departments so that is preparation but also Noah would you say since January

  68. the analysis being done is the 2 million is there from the general fund right the 1.25 million in all those years was going in and the additional contribution was never approved by the board and I'm asking why the auditors haven't reviewed that I think any that's not true yeah that's not contributions are within the budget or approved by the board so and that's why in a prior conversation I can all be together and have documents in front of us rather than you just bringing stuff up out of the blue it impedes a meaningful conversation but maybe that's your purpose but no I'm coming to the office and talk about it fairly I have brought it up at that stand in public comment multiple times before I was elected to the board but now I'm asking those same questions and the contributions are over what was a approved in the budget meetings and I'm asking how does that approval transfer to water and sewer if it's not included and it's over that dollar value that was in the corrective action plan approved by I don't think we'd agree with your statement and I will make another point to you mark is in in some of these departments we're gonna see a larger amount of retirees than in other departments so that is preparation but also Noah would you say since January well let's just use January because we're crossing over fiscal years how many water main breaks that we had do you think in the township and in the last seven months because this is very costly and they happen we average yearly 15 to 25 water main breaks depending on weather and circumstances right it was good we've had a couple even the last few weeks which you have normal in the middle of the but we've had a couple weeks of work with us I think we've had a couple of And what was the worst one we had, the one I remember that really took out a whole neighborhood recently? Yeah, we've had two back-to-back, and they range $35,000 to $100,000, depending on if it goes into a roadway or if there's different things going on. Right, and we have a 60-year-old infrastructure, at least here, that we put money aside because we're prepared to tackle any of these things that happen with money on hand versus having to run out and do emergency loans. We've been fortunate in that. Very fortunate. Our planning this year, now we've had two very dry months during the summer. We can't plan for that. Weather outside is weather, right? So we look at norms and trends, but these drought will probably end up in an overcollection this summer,

  69. departments so that is preparation but also Noah would you say since January well let's just use January because we're crossing over fiscal years how many water main breaks that we had do you think in the township and in the last seven months because this is very costly and they happen we average yearly 15 to 25 water main breaks depending on weather and circumstances right it was good we've had a couple even the last few weeks which you have normal in the middle of the but we've had a couple weeks of work with us I think we've had a couple of And what was the worst one we had, the one I remember that really took out a whole neighborhood recently? Yeah, we've had two back-to-back, and they range $35,000 to $100,000, depending on if it goes into a roadway or if there's different things going on. Right, and we have a 60-year-old infrastructure, at least here, that we put money aside because we're prepared to tackle any of these things that happen with money on hand versus having to run out and do emergency loans. We've been fortunate in that. Very fortunate. Our planning this year, now we've had two very dry months during the summer. We can't plan for that. Weather outside is weather, right? So we look at norms and trends, but these drought will probably end up in an overcollection this summer, not knowing what it's going to do into the fall. Right. But it's kind of that same position we've been in. Now, luckily, we've got Maple Road that we're going to dig up next year across the entire length and replace the transmission main. From Losser to Cranbrook getting lease. So we'll be in the fortunate position of being able to fund that ourselves instead of paying, you know, interest on a loan or bonds. Right. Which is good financial planning. Correct. And we are trying to achieve the reserve goal. Right. It's these outside factors have, you know, come to bear. And if you look at our whole body of our staffing, I think that we might have approximately 80 people that will retire in the next how many years that are going to receive full pension. Right. Thank you. and health care benefits. Five or six years. Over the next five or six years, right? And I think, who was it told us, I'm sorry, I think it was, what was the outfit that came and told us, was it Brian Green that told us, it's going to take us about 60 years to flush it all out of the system, right? So we have to be prepared for all that because it's very expensive. These pensions that were handed out, very expensive to us. Unfortunately, it stopped in 2005, and then the health care stopped in 2011, correct? Yeah.

  70. So we look at norms and trends, but these drought will probably end up in an overcollection this summer, not knowing what it's going to do into the fall. Right. But it's kind of that same position we've been in. Now, luckily, we've got Maple Road that we're going to dig up next year across the entire length and replace the transmission main. From Losser to Cranbrook getting lease. So we'll be in the fortunate position of being able to fund that ourselves instead of paying, you know, interest on a loan or bonds. Right. Which is good financial planning. Correct. And we are trying to achieve the reserve goal. Right. It's these outside factors have, you know, come to bear. And if you look at our whole body of our staffing, I think that we might have approximately 80 people that will retire in the next how many years that are going to receive full pension. Right. Thank you. and health care benefits. Five or six years. Over the next five or six years, right? And I think, who was it told us, I'm sorry, I think it was, what was the outfit that came and told us, was it Brian Green that told us, it's going to take us about 60 years to flush it all out of the system, right? So we have to be prepared for all that because it's very expensive. These pensions that were handed out, very expensive to us. Unfortunately, it stopped in 2005, and then the health care stopped in 2011, correct? Yeah. Very expensive benefits. And for the first time. Not the problem, though. The benefits were good, but in the past, the board didn't fund them in advance. And that's not a problem. We're fixing that problem. It's something that maybe I wouldn't have done back then, but hindsight's perfect. But to me, that's the real problem of it. It is. It wasn't funded, but then Michael came up with a nice program to offer buyouts. So when they retire, instead of getting the annual pension benefit, Michael, do you want to just recap? Yeah, I mean, we haven't had any takers yet. I'm trying. But that doesn't stop me from trying. But yeah, I mean, the idea is, I mean, coming back to your point, Martin, about the setting aside, well, I agree with you that our predecessors did not set aside enough money to be able to fund these benefits. But part of the problem is that when these benefits were put into place in the 1960s... ... ... ... the 1950s and the retirement age was set at 52 there was no expectation that somebody was going to live more than 10 to 20 years on that pension and now you know we've got people we've got almost

  71. Very expensive benefits. And for the first time. Not the problem, though. The benefits were good, but in the past, the board didn't fund them in advance. And that's not a problem. We're fixing that problem. It's something that maybe I wouldn't have done back then, but hindsight's perfect. But to me, that's the real problem of it. It is. It wasn't funded, but then Michael came up with a nice program to offer buyouts. So when they retire, instead of getting the annual pension benefit, Michael, do you want to just recap? Yeah, I mean, we haven't had any takers yet. I'm trying. But that doesn't stop me from trying. But yeah, I mean, the idea is, I mean, coming back to your point, Martin, about the setting aside, well, I agree with you that our predecessors did not set aside enough money to be able to fund these benefits. But part of the problem is that when these benefits were put into place in the 1960s... ... ... ... the 1950s and the retirement age was set at 52 there was no expectation that somebody was going to live more than 10 to 20 years on that pension and now you know we've got people we've got almost a dozen people that are in their mid to late 90s still collecting we had somebody who was 105 who was still collecting and that was not contemplated when these benefits were put into place and therefore besides the fact that they did underfund anyway and then the worst uh thing for the pension plan was that ridiculous prudential contract that they got into where we were putting money into this plan and it was earning two percent three percent at most in a given year and yet people were living longer so like it was if we had been invested in the market right from the 60s and 70s we'd be in a much different position but we were invested in that guaranteed deposit account contract which limited how much we earned year after year so it wasn't until 2014 that we sold the pension bonds and moved that money into the equity markets and where we've generated a 10 percent annualized return um that has helped increase our funded ratio but the biggest problem is that you know that back then there was no way to contemplate how long people were going to live in so one of the one of the reasons the biggest plan to allow for these buyouts is to eliminate that long-term risk

  72. a dozen people that are in their mid to late 90s still collecting we had somebody who was 105 who was still collecting and that was not contemplated when these benefits were put into place and therefore besides the fact that they did underfund anyway and then the worst uh thing for the pension plan was that ridiculous prudential contract that they got into where we were putting money into this plan and it was earning two percent three percent at most in a given year and yet people were living longer so like it was if we had been invested in the market right from the 60s and 70s we'd be in a much different position but we were invested in that guaranteed deposit account contract which limited how much we earned year after year so it wasn't until 2014 that we sold the pension bonds and moved that money into the equity markets and where we've generated a 10 percent annualized return um that has helped increase our funded ratio but the biggest problem is that you know that back then there was no way to contemplate how long people were going to live in so one of the one of the reasons the biggest plan to allow for these buyouts is to eliminate that long-term risk because you know we're looking at today people are living to their 80s 90s well in 20 years maybe we'll see somebody at 110. you know and you know i mean as medical technology improves and all that kind of you know science and all that people are going to live longer so if we can offer a buyout today that ends our responsibility i think that's an investment worth making and so i would like to see that happen now at the same time you know while i think it's a great idea these recipients who are earning who got the pensions are saying well i don't know how long i'm going to live so you know maybe it's better to take the guaranteed you know lifetime income so it's it's you know it's a trade-off yeah it's a great choice it's a hard thing you know you can't predict the future and mark mentioned something about well in 2016 2016 was 10 years ago we were three treasurers different back then you know three supervisors different back then you know there were so many other things going on that to go back that far would be i don't know how we can compare to that anymore because it's just not reality it's not where we're at it's not the same people and different laws different economy yeah i think you were the only one who was here in 2016 which we appreciate by the way yes the rest of us have we've been here in 2016 so um it it's like i don't know how far back

  73. because you know we're looking at today people are living to their 80s 90s well in 20 years maybe we'll see somebody at 110. you know and you know i mean as medical technology improves and all that kind of you know science and all that people are going to live longer so if we can offer a buyout today that ends our responsibility i think that's an investment worth making and so i would like to see that happen now at the same time you know while i think it's a great idea these recipients who are earning who got the pensions are saying well i don't know how long i'm going to live so you know maybe it's better to take the guaranteed you know lifetime income so it's it's you know it's a trade-off yeah it's a great choice it's a hard thing you know you can't predict the future and mark mentioned something about well in 2016 2016 was 10 years ago we were three treasurers different back then you know three supervisors different back then you know there were so many other things going on that to go back that far would be i don't know how we can compare to that anymore because it's just not reality it's not where we're at it's not the same people and different laws different economy yeah i think you were the only one who was here in 2016 which we appreciate by the way yes the rest of us have we've been here in 2016 so um it it's like i don't know how far back you want to go but at some point we can't change the past no we can't but if there was a policy under one of the previous treasurers to pay out investment allocate investment income we should know that what that policy was the auditor should advise us and they should advise us when the policy changed and was approved by the board that's I think a reasonable request I also want to understand the water and sewer rate stability with Noah's current comments with all of the extra income coming in because it's a dry season that also causes rate instability because you have more cash coming in so if we can't manage interest income for what water and sewer to get rate stability how is the township expected to manage dry seasons like we've had these past two months you know what do you mean by the dry seasons mark Noah's recent comments he said we're going to be collecting more revenue because it's dry seasons people are watering more people are watering more so if they're going to irrigate more that means revenue

  74. the way yes the rest of us have we've been here in 2016 so um it it's like i don't know how far back you want to go but at some point we can't change the past no we can't but if there was a policy under one of the previous treasurers to pay out investment allocate investment income we should know that what that policy was the auditor should advise us and they should advise us when the policy changed and was approved by the board that's I think a reasonable request I also want to understand the water and sewer rate stability with Noah's current comments with all of the extra income coming in because it's a dry season that also causes rate instability because you have more cash coming in so if we can't manage interest income for what water and sewer to get rate stability how is the township expected to manage dry seasons like we've had these past two months you know what do you mean by the dry seasons mark Noah's recent comments he said we're going to be collecting more revenue because it's dry seasons people are watering more people are watering more so if they're going to irrigate more that means revenue goes up and that causes rate instability so the UH wise argument is inconsistent with what Noah just said well I think I think that's a fair point mark but we can't control whether we can control interest income and the rates to instability in that so there's only certain factors that we can control as a board so what Noah is saying is I can't control the weather so to create the best packet possible and then if we get more revenue we will find a way to smooth that over several years it's not one year we can control interest income and to make sure that we have the best rate stability possible we are going to mitigate that risk yeah because i think last year we had a lot of rain wasn't we have a lot of rain in september so there was wasn't as much water use noah remember you so come on up so are come on up noah i think it's a wet spring last year so generally weather balances out to the norms of the past unless you subscribe to big weather changes that we're a part of right now um so we look at almanacs and we look at the history what you have is these anomalies that differ from that you try to take the middle of the road

  75. people are watering more so if they're going to irrigate more that means revenue goes up and that causes rate instability so the UH wise argument is inconsistent with what Noah just said well I think I think that's a fair point mark but we can't control whether we can control interest income and the rates to instability in that so there's only certain factors that we can control as a board so what Noah is saying is I can't control the weather so to create the best packet possible and then if we get more revenue we will find a way to smooth that over several years it's not one year we can control interest income and to make sure that we have the best rate stability possible we are going to mitigate that risk yeah because i think last year we had a lot of rain wasn't we have a lot of rain in september so there was wasn't as much water use noah remember you so come on up so are come on up noah i think it's a wet spring last year so generally weather balances out to the norms of the past unless you subscribe to big weather changes that we're a part of right now um so we look at almanacs and we look at the history what you have is these anomalies that differ from that you try to take the middle of the road and hope the dry matches the wet but weather outside is weather and we can't control that weather we can't uh we try to have odd even days and things like that but we literally can't go in and shut people's water off uh for use so that's where that comes into play and we have to be solvent in the water department so i can't plan on a drought year every year and under collect you know at a lower rate but with your meters now we can control any leaks which help residents the meters accurately reflect the water going into the facility which is by ordinance i'm required and so we're getting better we're getting real readings yeah and that's the bond that i have with the customer that i'm going to accurately reflect that right Are your water and sewer rates based on the expected minimum use of water? Based on a five-year history. Right, and we covered that in our conversations when we went through the water and sewer budget. The comments made by the auditors in the report are inconsistent with what NOAA has to deal with every year. I don't think so. I don't see that. I think you're putting words in their mouth there, Mark. No, I'm not. I think you are. No, I'm not. We've gone from, Raftelis required a $17 million reserve, and we're at $39 million because we have stable rates.

  76. history what you have is these anomalies that differ from that you try to take the middle of the road and hope the dry matches the wet but weather outside is weather and we can't control that weather we can't uh we try to have odd even days and things like that but we literally can't go in and shut people's water off uh for use so that's where that comes into play and we have to be solvent in the water department so i can't plan on a drought year every year and under collect you know at a lower rate but with your meters now we can control any leaks which help residents the meters accurately reflect the water going into the facility which is by ordinance i'm required and so we're getting better we're getting real readings yeah and that's the bond that i have with the customer that i'm going to accurately reflect that right Are your water and sewer rates based on the expected minimum use of water? Based on a five-year history. Right, and we covered that in our conversations when we went through the water and sewer budget. The comments made by the auditors in the report are inconsistent with what NOAA has to deal with every year. I don't think so. I don't see that. I think you're putting words in their mouth there, Mark. No, I'm not. I think you are. No, I'm not. We've gone from, Raftelis required a $17 million reserve, and we're at $39 million because we have stable rates. Well, $39 million is not the reserve. That's not the reserve. That's the net position, which includes the pipes in the ground. Right. That you're being totally disingenuous. So then what is the reserve? The cash balance is about $20 million. And we also have to put in all the extra cash in OPEP above what's funded. That should be counted, too. Right? That's extra money in there. No, you just ask for cash on hand. No, I ask for reserves. Yeah, cash reserves. And you also have $11 million in receivables. Well, I mean, you can call the reserves $14 million, and then our operating working capital is $6 million, or it's $10 million. Well, I'm not asking you to back up UHY's statement. They made the statement. I'm asking you. I had never made a statement about water rates and the stability. It's in your life. In the township, there are the people that are setting those rates, right? You're coming up with your studies about investment income. That is, I didn't say anything about droughts and how they're coming up with the rates. So one is okay, the other one is not?

  77. We've gone from, Raftelis required a $17 million reserve, and we're at $39 million because we have stable rates. Well, $39 million is not the reserve. That's not the reserve. That's the net position, which includes the pipes in the ground. Right. That you're being totally disingenuous. So then what is the reserve? The cash balance is about $20 million. And we also have to put in all the extra cash in OPEP above what's funded. That should be counted, too. Right? That's extra money in there. No, you just ask for cash on hand. No, I ask for reserves. Yeah, cash reserves. And you also have $11 million in receivables. Well, I mean, you can call the reserves $14 million, and then our operating working capital is $6 million, or it's $10 million. Well, I'm not asking you to back up UHY's statement. They made the statement. I'm asking you. I had never made a statement about water rates and the stability. It's in your life. In the township, there are the people that are setting those rates, right? You're coming up with your studies about investment income. That is, I didn't say anything about droughts and how they're coming up with the rates. So one is okay, the other one is not? You're talking about two entirely different things. You know what, at the end of the day, I think you really are just attacking the fact that I am not saying what you want to hear, right? I am just lining up two different scenarios that yield the same result. One is appropriate, one is inappropriate. I'm not sure what you're stating is inappropriate, though. I'm saying that if the township is concerned about rate stability, because of dry and wet seasons, we have inherent rate instability. It's going to happen. And you do your best to mitigate those. I think you're challenging them. Can I just kind of, Mark, can I say one thing? I'll be short. I think your bottom line is you're always worried about the financials and the cost, as we all are. We all truly are. But the amount of time that you are tying up the employees, the police department, the auditors, the amount of times we've had to bring in an attorney to answer your questions, come in and sit down during business hours when everybody's right here and can answer.

  78. So one is okay, the other one is not? You're talking about two entirely different things. You know what, at the end of the day, I think you really are just attacking the fact that I am not saying what you want to hear, right? I am just lining up two different scenarios that yield the same result. One is appropriate, one is inappropriate. I'm not sure what you're stating is inappropriate, though. I'm saying that if the township is concerned about rate stability, because of dry and wet seasons, we have inherent rate instability. It's going to happen. And you do your best to mitigate those. I think you're challenging them. Can I just kind of, Mark, can I say one thing? I'll be short. I think your bottom line is you're always worried about the financials and the cost, as we all are. We all truly are. But the amount of time that you are tying up the employees, the police department, the auditors, the amount of times we've had to bring in an attorney to answer your questions, come in and sit down during business hours when everybody's right here and can answer. anything you want but you're costing the taxpayers money by making these meetings go on later all of these people are here because they work here and they're trying to do their very best but we've been here late at night and it's not solving the problem you still have questions i well and i might not like the answers but i would like the answers then come in and talk to them talk to jason in his office when he has his whole resource in front of him all right why is here i have questions for you have any other questions mark yes i do okay i want to know if uhy is asserting that neither gasby nor michigan law generally require earnings from pooled cash to be allocated to participating funds based on their cash balances unless specifically required by a bond covenant or grant whether or not and what what is your question are you reading that from it was from my letter and yes i said what i said in the letter right we went through michael's whole entire presentation about how it's at why it's not allocated and he cited numerous mcls and went through the entire thing so what is your question so under the gasby disclosure for pooled investment

  79. anything you want but you're costing the taxpayers money by making these meetings go on later all of these people are here because they work here and they're trying to do their very best but we've been here late at night and it's not solving the problem you still have questions i well and i might not like the answers but i would like the answers then come in and talk to them talk to jason in his office when he has his whole resource in front of him all right why is here i have questions for you have any other questions mark yes i do okay i want to know if uhy is asserting that neither gasby nor michigan law generally require earnings from pooled cash to be allocated to participating funds based on their cash balances unless specifically required by a bond covenant or grant whether or not and what what is your question are you reading that from it was from my letter and yes i said what i said in the letter right we went through michael's whole entire presentation about how it's at why it's not allocated and he cited numerous mcls and went through the entire thing so what is your question so under the gasby disclosure for pooled investment income yes okay where i learned about it was at the michigan township association okay the township paid for training there they should interested follow principle i asked them about water and sewer they said no interest should follow principle and i kept hearing that over and over again from the michigan township association and i'm just trying to understand why they would say something and what you're saying is totally different and we have discussed well the michigan the michigan townships association is a trade organization and they're typically advising people from rural townships they're not they're not dealing with the the kind of sophisticated people that manage these larger communities um and so i've pointed out that where in the law it says that interest should go to the general fund and and and i also pointed out the case from the court of appeals where interest follows principle came from and it only specifically relates to tax money that belongs to other agencies the grand rapids schools for example that that's exactly right it was the grand rapids case i'm just trying to clarify some points okay well and and that's fine i'm just

  80. through the entire thing so what is your question so under the gasby disclosure for pooled investment income yes okay where i learned about it was at the michigan township association okay the township paid for training there they should interested follow principle i asked them about water and sewer they said no interest should follow principle and i kept hearing that over and over again from the michigan township association and i'm just trying to understand why they would say something and what you're saying is totally different and we have discussed well the michigan the michigan townships association is a trade organization and they're typically advising people from rural townships they're not they're not dealing with the the kind of sophisticated people that manage these larger communities um and so i've pointed out that where in the law it says that interest should go to the general fund and and and i also pointed out the case from the court of appeals where interest follows principle came from and it only specifically relates to tax money that belongs to other agencies the grand rapids schools for example that that's exactly right it was the grand rapids case i'm just trying to clarify some points okay well and and that's fine i'm just clarifying my point and that's it um and then the i'll i've got a question about the um uniform chart of accounts um um how does the unit if you with the uniform charter of accounts since the individual funds own the asset the only cash how does that the unit is and i'll see you next time reconcile with the pooled investments because the township doesn't own the cash or the uh general fund doesn't own the cash the the various funds own the cash the various funds are funds of the township it is one entity we are one government we are one entity all of the cash that belongs to us is our cash whether it's in the general fund or the public safety fund or water and sewer fund it's our cash and the law is very clear that the interest earned on township cash goes into the general fund now if a board resolution is made and approved to do it otherwise that would be appropriate the board can pass a resolution to transfer money out of the general

  81. clarifying my point and that's it um and then the i'll i've got a question about the um uniform chart of accounts um um how does the unit if you with the uniform charter of accounts since the individual funds own the asset the only cash how does that the unit is and i'll see you next time reconcile with the pooled investments because the township doesn't own the cash or the uh general fund doesn't own the cash the the various funds own the cash the various funds are funds of the township it is one entity we are one government we are one entity all of the cash that belongs to us is our cash whether it's in the general fund or the public safety fund or water and sewer fund it's our cash and the law is very clear that the interest earned on township cash goes into the general fund now if a board resolution is made and approved to do it otherwise that would be appropriate the board can pass a resolution to transfer money out of the general fund to any fund that it wants and it can call it for any reason that it wants so if the township board wanted to pass a resolution to say look we're going to transfer x amount of dollars to water and sewer because we believe that it should get some interest earnings the board can do that but the money has to be booked in the in the general fund first and then it can be transferred later what uh the i'll restate my question i was asking about passing a policy regarding investment income and allocate it based on principal balance if the board approves that that then that would have to be followed correct but it wouldn't be but it would be a transfer from the general fund which for it which you don't need any reason to do The interest earnings have to be booked in the general fund. At that point, you can take general fund money and put it wherever you want. Okay. I appreciate that. Let's see. The only other question I have is I'd like you to go down two, three more slides, if you can.

  82. that would be appropriate the board can pass a resolution to transfer money out of the general fund to any fund that it wants and it can call it for any reason that it wants so if the township board wanted to pass a resolution to say look we're going to transfer x amount of dollars to water and sewer because we believe that it should get some interest earnings the board can do that but the money has to be booked in the in the general fund first and then it can be transferred later what uh the i'll restate my question i was asking about passing a policy regarding investment income and allocate it based on principal balance if the board approves that that then that would have to be followed correct but it wouldn't be but it would be a transfer from the general fund which for it which you don't need any reason to do The interest earnings have to be booked in the general fund. At that point, you can take general fund money and put it wherever you want. Okay. I appreciate that. Let's see. The only other question I have is I'd like you to go down two, three more slides, if you can. Back up one. So Troy pays out investment income to water and sewer and multiple funds. So does Birmingham. So does West Bloomfield. Okay. So that's if we're going to. Okay. But here's what I would say about that. Troy and Birmingham are cities. I'm quoting the statute from the General Township Act. And it's the Township Act, 41.77, that dictates how a township treasurer is supposed to book interest income. Cities may be completely different. Correct me if I'm wrong. Yeah, I don't think the Home Rule Cities Act has the same prohibition. But regardless, Michael said. statement is very important because he explained procedurally under applicable laws MCL 4177 sub 2 you can't have a policy that directly puts investment income in water sewer fund under

  83. The only other question I have is I'd like you to go down two, three more slides, if you can. Back up one. So Troy pays out investment income to water and sewer and multiple funds. So does Birmingham. So does West Bloomfield. Okay. So that's if we're going to. Okay. But here's what I would say about that. Troy and Birmingham are cities. I'm quoting the statute from the General Township Act. And it's the Township Act, 41.77, that dictates how a township treasurer is supposed to book interest income. Cities may be completely different. Correct me if I'm wrong. Yeah, I don't think the Home Rule Cities Act has the same prohibition. But regardless, Michael said. statement is very important because he explained procedurally under applicable laws MCL 4177 sub 2 you can't have a policy that directly puts investment income in water sewer fund under state law the policy is required to put it in general fund where then you can have reappropriation by resolution to any fund you want but it applies to townships not so west boomfield is paying out the interest income well okay then I mean that's the process they're doing it though crew then is putting it in general and reallocating it which is why I was bringing up the fact that it's in the notes yeah but you also have to remember they subsidize their rates and they paid dearly from the general fund that's because they were transferring money from the general fund and now they've had to stop because they can't determine it wasn't sustainable subsidizing their water bills to keep them lower getting double-digit rate increases they made us look worse by subsidizing water bills and the time ran out they can't afford to do that whether whether they made the right decision or wrong decision is not for us to say right they're running their municipality we're running ours 41.77 says the interest goes into the general fund after that we can do whatever the hell we want to with it and so so we don't we so that means we do not have a

  84. you can't have a policy that directly puts investment income in water sewer fund under state law the policy is required to put it in general fund where then you can have reappropriation by resolution to any fund you want but it applies to townships not so west boomfield is paying out the interest income well okay then I mean that's the process they're doing it though crew then is putting it in general and reallocating it which is why I was bringing up the fact that it's in the notes yeah but you also have to remember they subsidize their rates and they paid dearly from the general fund that's because they were transferring money from the general fund and now they've had to stop because they can't determine it wasn't sustainable subsidizing their water bills to keep them lower getting double-digit rate increases they made us look worse by subsidizing water bills and the time ran out they can't afford to do that whether whether they made the right decision or wrong decision is not for us to say right they're running their municipality we're running ours 41.77 says the interest goes into the general fund after that we can do whatever the hell we want to with it and so so we don't we so that means we do not have a policy on investment income allocation. The written policy is the statute. So the policy so no I thought a policy has to be approved by the board. Well the statute was passed by the legislature and we have to follow following the statute and then we passed the budget which policy is only something that we are allowed to do under a statute specific statute it says that we can you know pass a policy that relates to you know the investment earnings. PA20 says that I can only invest in money markets, CDs, commercial paper, and government and agency bonds. That's what PA20 says. However we can pass a policy that says well we want to make it more restrictive than that. Right? Correct. But it has to be it has to comply with the statute. We can't say that in our investment policy that I can invest in corporate bonds. Well we can't do that because PA20 is very clear corporate bonds are not allowed for township investment. I've never questioned our policy on where we can put money and where we can invest. Well I'm just giving you an example that you're trying to draw a distinction between a policy and a statute.

  85. policy on investment income allocation. The written policy is the statute. So the policy so no I thought a policy has to be approved by the board. Well the statute was passed by the legislature and we have to follow following the statute and then we passed the budget which policy is only something that we are allowed to do under a statute specific statute it says that we can you know pass a policy that relates to you know the investment earnings. PA20 says that I can only invest in money markets, CDs, commercial paper, and government and agency bonds. That's what PA20 says. However we can pass a policy that says well we want to make it more restrictive than that. Right? Correct. But it has to be it has to comply with the statute. We can't say that in our investment policy that I can invest in corporate bonds. Well we can't do that because PA20 is very clear corporate bonds are not allowed for township investment. I've never questioned our policy on where we can put money and where we can invest. Well I'm just giving you an example that you're trying to draw a distinction between a policy and a statute. We can pass policy as long as it's in compliance with a statute. The statute very clearly states that interest income goes into the general fund. We can't have have a policy that that changes the statute. We have to comply with the statute. Okay, and the, this question. Okay, thank you for that explanation. And then, so since the since we were removed from the corrective action plan, and there's no budget for water and sewer, have benefit payments still been made by water and sewer? Say it again, Mark. Have benefit payments been made by water and sewer? Yes, that's correct. So why? All benefit payments for OPEB are being made by their respective operating budgets based on where the retirees are from. It's not like that for the pension, but for OPEB, we are paying for benefits out of our operating budget so that we

  86. Well I'm just giving you an example that you're trying to draw a distinction between a policy and a statute. We can pass policy as long as it's in compliance with a statute. The statute very clearly states that interest income goes into the general fund. We can't have have a policy that that changes the statute. We have to comply with the statute. Okay, and the, this question. Okay, thank you for that explanation. And then, so since the since we were removed from the corrective action plan, and there's no budget for water and sewer, have benefit payments still been made by water and sewer? Say it again, Mark. Have benefit payments been made by water and sewer? Yes, that's correct. So why? All benefit payments for OPEB are being made by their respective operating budgets based on where the retirees are from. It's not like that for the pension, but for OPEB, we are paying for benefits out of our operating budget so that we can allow the trust to grow so that in the future, the trust will be able to take on those payments. But why aren't sewers fully funded? Why would it need to keep paying in? Because our actuary has advised us that we do not want to start depleting that fund because it's not because we have many more because there's not enough money in there. We're not going to generate enough of a return to cover that cost. We're going to end up depleting it down. So his recommendation is to allow it to grow. so that in the future we'll be able to make benefit payments out of the trust without worry that it's going to get depleted that is their recommendation but in addition the state looks at the OPEB liability as a whole it looks at it the trust as a whole and the liability as a whole so water and sewer paid an extra it became for more than what was required now it's fully funded and it has to keep paying in because the general fund cannot make that payment on their behalf since they're fully funded go ahead Chris I don't think that's accurate our director Jason Tyson said well the last few years minimum payments were 50,000 and then in this last budget year that we that we approved the budget it was nothing so that don't believe that's above benefit payment

  87. for the pension, but for OPEB, we are paying for benefits out of our operating budget so that we can allow the trust to grow so that in the future, the trust will be able to take on those payments. But why aren't sewers fully funded? Why would it need to keep paying in? Because our actuary has advised us that we do not want to start depleting that fund because it's not because we have many more because there's not enough money in there. We're not going to generate enough of a return to cover that cost. We're going to end up depleting it down. So his recommendation is to allow it to grow. so that in the future we'll be able to make benefit payments out of the trust without worry that it's going to get depleted that is their recommendation but in addition the state looks at the OPEB liability as a whole it looks at it the trust as a whole and the liability as a whole so water and sewer paid an extra it became for more than what was required now it's fully funded and it has to keep paying in because the general fund cannot make that payment on their behalf since they're fully funded go ahead Chris I don't think that's accurate our director Jason Tyson said well the last few years minimum payments were 50,000 and then in this last budget year that we that we approved the budget it was nothing so that don't believe that's above benefit payment benefit payment comes out of operating and then we are not depleted hopefully so when I was on that retirement health their Savings Committee we were not paying any benefits out of it because we need that fund to grow so it can be self-sufficient did the in the actuarial calculation that the actuary require water and sewer to make a payment I don't know if it is appropriate to challenge the experts at Milliman I am NOT an actuary expert so I take the experts at face value it's that's what I'm it's a mark your calculation are you an actuary because I'm having a tough time arguing with experts amber and josh are experts in municipal government and finance us Josh I wrote Josh. I'm sorry. I said Josh at first, so I screwed up. I worked in corporate government. I worked at Ernst & Young. But I'm not going to argue with people who are partners and have expertise that are outside of my purview. I'm going to take it at face value. That's their word. I'm not going to argue with Milliman if they tell us this is the amount we should do. I think that would be foolish. And as a fiduciary here, I don't understand why we keep arguing with experts.

  88. budget it was nothing so that don't believe that's above benefit payment benefit payment comes out of operating and then we are not depleted hopefully so when I was on that retirement health their Savings Committee we were not paying any benefits out of it because we need that fund to grow so it can be self-sufficient did the in the actuarial calculation that the actuary require water and sewer to make a payment I don't know if it is appropriate to challenge the experts at Milliman I am NOT an actuary expert so I take the experts at face value it's that's what I'm it's a mark your calculation are you an actuary because I'm having a tough time arguing with experts amber and josh are experts in municipal government and finance us Josh I wrote Josh. I'm sorry. I said Josh at first, so I screwed up. I worked in corporate government. I worked at Ernst & Young. But I'm not going to argue with people who are partners and have expertise that are outside of my purview. I'm going to take it at face value. That's their word. I'm not going to argue with Milliman if they tell us this is the amount we should do. I think that would be foolish. And as a fiduciary here, I don't understand why we keep arguing with experts. Dirk is an expert. Tony is an expert. Jason is an expert. John and Amber are experts. I don't want to continue arguing with experts because I'm not an expert in this. I don't know why we're doing that. You know what? I am not an expert, but I do read their reports. But we are reading it and misinterpreting it. So I'll ask you a question. So you're speaking with such conviction about all of these accounting principles. And I'd like to know what expertise you have that allows you to speak with such conviction about these topics. When I point out, if you go to the last slide there, Sean, all of the various experts that we have. I mean, Amber, you've been doing this for, you know, despite your youthful appearance here. You've been doing this, what, 20 plus years? Yeah. Okay. So she's been doing municipal accounting and auditing for 20 plus years. She is an expert in this and this is what she's telling us. And you are challenging all of our experts. These are the things. And then, you know that, what, what identify is, what, what, what, what type of aircraft. So, who's a director of this. And I'd like to know, what gives you the conviction to be able to do that? I was elected by the residents. That's true. Okay, but what's your qualification to be able to understand and question all of these experts? Well, first I read the report. So this is a report from Milliman dated April 1, 2024.

  89. And as a fiduciary here, I don't understand why we keep arguing with experts. Dirk is an expert. Tony is an expert. Jason is an expert. John and Amber are experts. I don't want to continue arguing with experts because I'm not an expert in this. I don't know why we're doing that. You know what? I am not an expert, but I do read their reports. But we are reading it and misinterpreting it. So I'll ask you a question. So you're speaking with such conviction about all of these accounting principles. And I'd like to know what expertise you have that allows you to speak with such conviction about these topics. When I point out, if you go to the last slide there, Sean, all of the various experts that we have. I mean, Amber, you've been doing this for, you know, despite your youthful appearance here. You've been doing this, what, 20 plus years? Yeah. Okay. So she's been doing municipal accounting and auditing for 20 plus years. She is an expert in this and this is what she's telling us. And you are challenging all of our experts. These are the things. And then, you know that, what, what identify is, what, what, what, what type of aircraft. So, who's a director of this. And I'd like to know, what gives you the conviction to be able to do that? I was elected by the residents. That's true. Okay, but what's your qualification to be able to understand and question all of these experts? Well, first I read the report. So this is a report from Milliman dated April 1, 2024. And it shows a negative payment required from water and sewer. It shows minus 58,458 is a required contribution from water and sewer to OPEP. What year? Right here. You didn't say what year when you said it. And then, Jason, do you remember what was our contribution? Did it say, Mark? I would have to look on the later one, but it was above. It was above zero because the benefit is considered a contribution by the auditors and by Milliman. Go ahead, Jason. I don't have all the information in front of me, so I might need to circle back to it. But I do know we've discussed and I've answered this multiple times in the past. The benefit payments are required in financial statement disclosure to be treated that way. Does not, that is different from required.

  90. So this is a report from Milliman dated April 1, 2024. And it shows a negative payment required from water and sewer. It shows minus 58,458 is a required contribution from water and sewer to OPEP. What year? Right here. You didn't say what year when you said it. And then, Jason, do you remember what was our contribution? Did it say, Mark? I would have to look on the later one, but it was above. It was above zero because the benefit is considered a contribution by the auditors and by Milliman. Go ahead, Jason. I don't have all the information in front of me, so I might need to circle back to it. But I do know we've discussed and I've answered this multiple times in the past. The benefit payments are required in financial statement disclosure to be treated that way. Does not, that is different from required. requiring new funds, new cash to be contributed or infused into the trust. So those are two different, completely separate things. Also when looking at the actuarial reports, there's a timing difference from when they're released and for what fiscal year that they are pertaining to. Typically they're done in advance so that you have that information in front of you to be able to make the decisions when you come into that new budget year or new financial year. So again, without looking back at it again to fine tune my answer, I do believe that it's being misinterpreted on one of those facets. Because we're required to make a payment by Milliman or we're not required to make a payment by Milliman. If the actuary from Milliman says zero and then a future error set is negative, that we won't be making a payment moving forward, correct? So my recollection is the year that just ended, March 31, 2026, I believe the appropriate actuarial report for that was the one dated April 1, 2024, is my recollection. Because that report is issued every two years.

  91. requiring new funds, new cash to be contributed or infused into the trust. So those are two different, completely separate things. Also when looking at the actuarial reports, there's a timing difference from when they're released and for what fiscal year that they are pertaining to. Typically they're done in advance so that you have that information in front of you to be able to make the decisions when you come into that new budget year or new financial year. So again, without looking back at it again to fine tune my answer, I do believe that it's being misinterpreted on one of those facets. Because we're required to make a payment by Milliman or we're not required to make a payment by Milliman. If the actuary from Milliman says zero and then a future error set is negative, that we won't be making a payment moving forward, correct? So my recollection is the year that just ended, March 31, 2026, I believe the appropriate actuarial report for that was the one dated April 1, 2024, is my recollection. Because that report is issued every two years. And I also, again, if I'm accurate in my recollection, that that is the first year where it had a zero contribution noted in it and that would coincide with... ... what I recalled as this being our first year of making a zero contribution. But go back to the question is that why are contributions being made in the form of benefit payment if it's zero? Do we follow the Millennium Report as how we determine what our actuary determined contribution is? Is that how we determine it? Yes. It's used in advisement of that as well as their reports help determine what should be disclosed in the audited financial statements and how they should be disclosed and reported. And they're the experts so we take their word. Yes. So if it's zero and we're paying money in that would be inappropriate? I think I stated that it was zero and we contributed zero. Right. Did you pay the benefit payments according to what's in the audit? Because I'm looking at the audit and the audit requires no benefit payments.

  92. Because that report is issued every two years. And I also, again, if I'm accurate in my recollection, that that is the first year where it had a zero contribution noted in it and that would coincide with... ... what I recalled as this being our first year of making a zero contribution. But go back to the question is that why are contributions being made in the form of benefit payment if it's zero? Do we follow the Millennium Report as how we determine what our actuary determined contribution is? Is that how we determine it? Yes. It's used in advisement of that as well as their reports help determine what should be disclosed in the audited financial statements and how they should be disclosed and reported. And they're the experts so we take their word. Yes. So if it's zero and we're paying money in that would be inappropriate? I think I stated that it was zero and we contributed zero. Right. Did you pay the benefit payments according to what's in the audit? Because I'm looking at the audit and the audit requires no benefit payments. And the Milliman Actuary includes, looks at the benefit payment, the expected benefits going out, and the contributions coming in to keep it fully funded. That's the way the actuaries are structured. But the benefit payments are paid out of our operating, not out of a trust. The report provides for an actuarially determined contribution. We don't pay the full ADC for OPEB. We pay our contribution of $1.25 million on top of the benefits. Thank you very much for this. Thanks for tuning in. so the financial statements and the and the recommendation from milliman are applied to the trust as a whole and that's where the adc is determined from just like the adc for the pension it's looked at the trust as a whole so the in other words the 100 funded water and sewer shouldn't be paying anything in no the building inspection 100 over 100 should it be that's not what i said yeah and they're not paying the current contributions because it's the fiscal mark you're fishing for answers we're not giving you but you're just going back to what um we've talked about it actually said well you don't like our answers amber did not okay can i can i say something yeah you've had the floor for an hour and a half or longer i'd like to say a couple things thank you mark you're more than entitled to bring up whatever

  93. And the Milliman Actuary includes, looks at the benefit payment, the expected benefits going out, and the contributions coming in to keep it fully funded. That's the way the actuaries are structured. But the benefit payments are paid out of our operating, not out of a trust. The report provides for an actuarially determined contribution. We don't pay the full ADC for OPEB. We pay our contribution of $1.25 million on top of the benefits. Thank you very much for this. Thanks for tuning in. so the financial statements and the and the recommendation from milliman are applied to the trust as a whole and that's where the adc is determined from just like the adc for the pension it's looked at the trust as a whole so the in other words the 100 funded water and sewer shouldn't be paying anything in no the building inspection 100 over 100 should it be that's not what i said yeah and they're not paying the current contributions because it's the fiscal mark you're fishing for answers we're not giving you but you're just going back to what um we've talked about it actually said well you don't like our answers amber did not okay can i can i say something yeah you've had the floor for an hour and a half or longer i'd like to say a couple things thank you mark you're more than entitled to bring up whatever you want to do you brought this up as long as you've been on the board and we've had our attorneys respond to you we've had our financial people respond to you had our auditors respond to you all the experts have responded to you you may not like their responses but they have responded to you and nobody is ignoring you at the same time you've already had a previous complaint or letter to the treasury department which they never responded to so i would assume that means they don't take it too seriously and again you're you've sent another one to them which if they do respond to it and they want anything i'm sure that the township will do whatever is necessary but at the same time they still have not responded to it it so i don't really you know you're you've had your you've had your evening and you've had the opportunity to ask a lot of questions and since this is really uh before the treasury department at this time i really don't think we should bring this up anymore until we have some response it's like a litigation until there's some response from the treasury department i agree with you a hundred percent val as far as

  94. i'd like to say a couple things thank you mark you're more than entitled to bring up whatever you want to do you brought this up as long as you've been on the board and we've had our attorneys respond to you we've had our financial people respond to you had our auditors respond to you all the experts have responded to you you may not like their responses but they have responded to you and nobody is ignoring you at the same time you've already had a previous complaint or letter to the treasury department which they never responded to so i would assume that means they don't take it too seriously and again you're you've sent another one to them which if they do respond to it and they want anything i'm sure that the township will do whatever is necessary but at the same time they still have not responded to it it so i don't really you know you're you've had your you've had your evening and you've had the opportunity to ask a lot of questions and since this is really uh before the treasury department at this time i really don't think we should bring this up anymore until we have some response it's like a litigation until there's some response from the treasury department i agree with you a hundred percent val as far as this has taken hours and hours and hours of staff time all of our experts in addition to that every time you send something to the treasury department that only exacerbates the amount of time and effort and cost that the township pays and that the treasury department has to pay so i mean so far again they have not seen any validity in what you've had to complain about and if they do in the future as i've spoken to michael what's the response going to be we're going to cooperate fully there you go so with that said i i think we should just be done with this table this see what happens we have a lot of other things to take care of our finances are strong um and uh it's been very clear michael has answered and done an outstanding job of presenting this evening so has jason and our auditors and with that said i i think it's just time to to move on. I agree. Okay, so I'm going to close. Let's close item number four and move on to number five and talk about our solution to address police department present and future space needs presented by Michael Shostak, our treasurer. All right. So last time we, I presented a presentation on some

  95. there's some response from the treasury department i agree with you a hundred percent val as far as this has taken hours and hours and hours of staff time all of our experts in addition to that every time you send something to the treasury department that only exacerbates the amount of time and effort and cost that the township pays and that the treasury department has to pay so i mean so far again they have not seen any validity in what you've had to complain about and if they do in the future as i've spoken to michael what's the response going to be we're going to cooperate fully there you go so with that said i i think we should just be done with this table this see what happens we have a lot of other things to take care of our finances are strong um and uh it's been very clear michael has answered and done an outstanding job of presenting this evening so has jason and our auditors and with that said i i think it's just time to to move on. I agree. Okay, so I'm going to close. Let's close item number four and move on to number five and talk about our solution to address police department present and future space needs presented by Michael Shostak, our treasurer. All right. So last time we, I presented a presentation on some of the options that we were working on for addressing the space needs of the police department and mindful of the fact that, you know, we had two proposals that we are considering. One is proposal number one would be to build a new building and tear down this building. So it's one for one. This is a 90 year old building. And that brings with it a whole host of costs, both known and unknown. And then the second proposal was to build a smaller police department only building and leave this building standing and all of the administrative departments would stay in this building. Last time we discussed this, one question came up about what would it cost to operate this building? So I asked our director of public works, Noah Mahalski to put together his thoughts on that.

  96. by Michael Shostak, our treasurer. All right. So last time we, I presented a presentation on some of the options that we were working on for addressing the space needs of the police department and mindful of the fact that, you know, we had two proposals that we are considering. One is proposal number one would be to build a new building and tear down this building. So it's one for one. This is a 90 year old building. And that brings with it a whole host of costs, both known and unknown. And then the second proposal was to build a smaller police department only building and leave this building standing and all of the administrative departments would stay in this building. Last time we discussed this, one question came up about what would it cost to operate this building? So I asked our director of public works, Noah Mahalski to put together his thoughts on that. and that's what I'm passing out right now. That basically, in his view, between the 20-year capital plan for HVAC systems, elevator upgrades and repairs, roofing, any internal improvements that need to be, you know, for aesthetic purposes, window replacement, and other unknown, and then those are just the known items, and then he put together a budget of two million dollars for unknown items. That could be things like foundation cracks, that could be things like the roof caving in, I mean, anything that, you know, that could happen in a 90-year-old building, and... Did you notice how hot it was in here? Yeah, so we have three HVAC systems in this building that we have to maintain, and that's why we have different temperatures in different parts of the building. And we spent money to bring someone in to help get the air working again. Right, so his assessment is 6.7 million dollars. I would add that he's done, you know, the best he can to estimate what those costs are

  97. and that's what I'm passing out right now. That basically, in his view, between the 20-year capital plan for HVAC systems, elevator upgrades and repairs, roofing, any internal improvements that need to be, you know, for aesthetic purposes, window replacement, and other unknown, and then those are just the known items, and then he put together a budget of two million dollars for unknown items. That could be things like foundation cracks, that could be things like the roof caving in, I mean, anything that, you know, that could happen in a 90-year-old building, and... Did you notice how hot it was in here? Yeah, so we have three HVAC systems in this building that we have to maintain, and that's why we have different temperatures in different parts of the building. And we spent money to bring someone in to help get the air working again. Right, so his assessment is 6.7 million dollars. I would add that he's done, you know, the best he can to estimate what those costs are going to be over the next 15 to 20 years, but we don't really know where inflation is going to go. And so, you know, these numbers may be high, they may be low. in terms of what things will cost over the next 15 to 20 years. And so plus the unknown variable as well. So I hope that answers that question that we were talking about. The other thing I took back from last meeting was a discussion to look at a smaller building, a smaller space. And so I took the original two proposals and I am going to pass out modifications that look at slightly smaller buildings. And so and we can see what that does. The other thing we talked about was the training facility. And in the initial plan, there was an idea to build a training facility for our police and fire over on our Gulf Drive property.

  98. add that he's done, you know, the best he can to estimate what those costs are going to be over the next 15 to 20 years, but we don't really know where inflation is going to go. And so, you know, these numbers may be high, they may be low. in terms of what things will cost over the next 15 to 20 years. And so plus the unknown variable as well. So I hope that answers that question that we were talking about. The other thing I took back from last meeting was a discussion to look at a smaller building, a smaller space. And so I took the original two proposals and I am going to pass out modifications that look at slightly smaller buildings. And so and we can see what that does. The other thing we talked about was the training facility. And in the initial plan, there was an idea to build a training facility for our police and fire over on our Gulf Drive property. And we discussed that that might be a want, but not necessarily a need. I took the liberty to contact Sheriff Bouchard. And Sheriff informed me that he, his department, is building a new training facility in Rochester Hills that would be available for local agencies to use. Thank you. And I hope and you're welcome. Of course, yours is, I'm not gonna do anything. You've got to do anything. Thank you. And so based on that, I took out the training facility from these proposals, so that reduces the cost as well. And so I'm going to pass these out, and you're going to see that they look identical from a high level, but I highlighted that there's differences in the size. So here's the first one. This is a 27,500 square foot footprint, 220 by 125, and so for a three-story building, that would be 82,500 square feet.

  99. and fire over on our Gulf Drive property. And we discussed that that might be a want, but not necessarily a need. I took the liberty to contact Sheriff Bouchard. And Sheriff informed me that he, his department, is building a new training facility in Rochester Hills that would be available for local agencies to use. Thank you. And I hope and you're welcome. Of course, yours is, I'm not gonna do anything. You've got to do anything. Thank you. And so based on that, I took out the training facility from these proposals, so that reduces the cost as well. And so I'm going to pass these out, and you're going to see that they look identical from a high level, but I highlighted that there's differences in the size. So here's the first one. This is a 27,500 square foot footprint, 220 by 125, and so for a three-story building, that would be 82,500 square feet. For reference sake, last time we looked at a 90,000, a little over 90,000 square foot building, so this is now an 82,000 square foot building, or if we did just a two-story building for police only, it would be a 55,000 square foot building. And you see here, removing the training center. I lowered the budget for the animal shelter. I thought that might be a little bit generous, so I lowered that down to 1 million for upgrading or renovating the cable building to be the animal shelter, and increase the capital reserve to reflect what we're probably going to be at in two years. And you see that there's a difference in... total cost of between 60.1 million and 50.7 million. And so the bond sizes would be 60.8 and 51.3. The first year millage rates would be 0.4 or 0.32, which is a difference of a little short of $20 a year for the average taxpayer. So that's a 220 by 125 footprint. And the one I'm passing out now is a 200 by 125 footprint, which would be 25,000 square feet per floor.

  100. This is a 27,500 square foot footprint, 220 by 125, and so for a three-story building, that would be 82,500 square feet. For reference sake, last time we looked at a 90,000, a little over 90,000 square foot building, so this is now an 82,000 square foot building, or if we did just a two-story building for police only, it would be a 55,000 square foot building. And you see here, removing the training center. I lowered the budget for the animal shelter. I thought that might be a little bit generous, so I lowered that down to 1 million for upgrading or renovating the cable building to be the animal shelter, and increase the capital reserve to reflect what we're probably going to be at in two years. And you see that there's a difference in... total cost of between 60.1 million and 50.7 million. And so the bond sizes would be 60.8 and 51.3. The first year millage rates would be 0.4 or 0.32, which is a difference of a little short of $20 a year for the average taxpayer. So that's a 220 by 125 footprint. And the one I'm passing out now is a 200 by 125 footprint, which would be 25,000 square feet per floor. So it would be either a 50,000 or a 75,000 square foot building. Keeping in mind that the current Township Hall that we're in that includes police is about a 35,000 square foot building. Um, and so, and police is, I would say roughly, uh, 18,000 of that. Um, and so, uh, if we removed police into a, a separate building that would leave, um, that 18,000 square foot feet, um, that would need to be repurposed. Um, some of it would be easy to repurpose, some of it more difficult. Like we have, um, six holding cells, I believe. Um, right. Correct me if I'm wrong, chief. Six holding cells, seven. We have four, four adult holding cells. Okay, so five. So you have five holding cells. Those are designed as jail cells. That would be a little difficult to repurpose. And so, and we don't know structurally what we could do down there that wouldn't affect the, you know, what's load bearing and what's not load bearing.

  101. passing out now is a 200 by 125 footprint, which would be 25,000 square feet per floor. So it would be either a 50,000 or a 75,000 square foot building. Keeping in mind that the current Township Hall that we're in that includes police is about a 35,000 square foot building. Um, and so, and police is, I would say roughly, uh, 18,000 of that. Um, and so, uh, if we removed police into a, a separate building that would leave, um, that 18,000 square foot feet, um, that would need to be repurposed. Um, some of it would be easy to repurpose, some of it more difficult. Like we have, um, six holding cells, I believe. Um, right. Correct me if I'm wrong, chief. Six holding cells, seven. We have four, four adult holding cells. Okay, so five. So you have five holding cells. Those are designed as jail cells. That would be a little difficult to repurpose. And so, and we don't know structurally what we could do down there that wouldn't affect the, you know, what's load bearing and what's not load bearing. So we would need to study that further. But these are two additional proposals. So I bring that to the board for consideration. And I believe I've answered all the questions that I recall from the last meeting. And so, you know, I'm just, just doing the math and presenting it to the board for our consideration. I'd like to make a motion to amend item number five to include the fire department, present, future space needs, and the township hall, future and present space needs so we can discuss all three items. So you just want the, it to include? Yeah, because we can't discuss fire or township hall if it's not on the agenda. I don't think that's not true. I don't think that's not true. Is that true? We can talk about it. Absolutely. We can talk about it. You mean to make something for the future, for a future agenda? No, he's saying he wants to. No, the current agenda only allows us to discuss.

  102. Okay, so five. So you have five holding cells. Those are designed as jail cells. That would be a little difficult to repurpose. And so, and we don't know structurally what we could do down there that wouldn't affect the, you know, what's load bearing and what's not load bearing. So we would need to study that further. But these are two additional proposals. So I bring that to the board for consideration. And I believe I've answered all the questions that I recall from the last meeting. And so, you know, I'm just, just doing the math and presenting it to the board for our consideration. I'd like to make a motion to amend item number five to include the fire department, present, future space needs, and the township hall, future and present space needs so we can discuss all three items. So you just want the, it to include? Yeah, because we can't discuss fire or township hall if it's not on the agenda. I don't think that's not true. I don't think that's not true. Is that true? We can talk about it. Absolutely. We can talk about it. You mean to make something for the future, for a future agenda? No, he's saying he wants to. No, the current agenda only allows us to discuss. Agenda doesn't control that. The agenda item does not control the ability to talk about those, so I think we can continue to talk about those needs. I think maybe he's confused because when we go into closed session, we can only discuss what's on the agenda. But in open session, we can go in any direction. Is that correct? Okay. I guess I'll start. So I've always been kind of in the middle on this, specifically because we talk about needs versus wants. One of the things that Trustee Barnett brought up was understanding what the cost basis are for some of our renovations, as well as some of our expenses that we're going to have over the year, which I thought was a great point, to be able to understand what is the difference between new versus just keeping it as is and trying to be as fiscally prudent as possible. So when we start looking at some of these differences between I'm looking at the 25,000-square-foot building or the 200-by-125, the difference between Proposal 2 and Proposal 1 is so close, it almost comes into what our maintenance costs would be on the building. And again, in 20 years, now we have a 110-year-old building. Well, just one point of clarification there, I'm already including a reserve of $10 million for these costs.

  103. Agenda doesn't control that. The agenda item does not control the ability to talk about those, so I think we can continue to talk about those needs. I think maybe he's confused because when we go into closed session, we can only discuss what's on the agenda. But in open session, we can go in any direction. Is that correct? Okay. I guess I'll start. So I've always been kind of in the middle on this, specifically because we talk about needs versus wants. One of the things that Trustee Barnett brought up was understanding what the cost basis are for some of our renovations, as well as some of our expenses that we're going to have over the year, which I thought was a great point, to be able to understand what is the difference between new versus just keeping it as is and trying to be as fiscally prudent as possible. So when we start looking at some of these differences between I'm looking at the 25,000-square-foot building or the 200-by-125, the difference between Proposal 2 and Proposal 1 is so close, it almost comes into what our maintenance costs would be on the building. And again, in 20 years, now we have a 110-year-old building. Well, just one point of clarification there, I'm already including a reserve of $10 million for these costs. I'm saying, but if I went to my residence and say, we're narrowing this gap because there are expenses, that we have to use long term and some of these are unpredictable as I mentioned yes that's why as we narrow that yeah that's correct it makes proposal one meaning both Township Hall and the police from look more lucrative the other part of this that is weighing on me is our residents throughout the county have a lot of asks that are outside of our asks as a township so the intermediate school district ask of 1.5 mills is countywide not something we get to control or have a benefit for our local government as well as the recent museum countywide millage which is another 0.2 mills so there are a lot of asks which balance that could be in November November's gonna be museums okay so when I think about these other asks I want to be cognizant of our residents and the type of there's only so much money that they have so I want to make sure that we only ask for needs not once the second proposal with the smaller building

  104. Well, just one point of clarification there, I'm already including a reserve of $10 million for these costs. I'm saying, but if I went to my residence and say, we're narrowing this gap because there are expenses, that we have to use long term and some of these are unpredictable as I mentioned yes that's why as we narrow that yeah that's correct it makes proposal one meaning both Township Hall and the police from look more lucrative the other part of this that is weighing on me is our residents throughout the county have a lot of asks that are outside of our asks as a township so the intermediate school district ask of 1.5 mills is countywide not something we get to control or have a benefit for our local government as well as the recent museum countywide millage which is another 0.2 mills so there are a lot of asks which balance that could be in November November's gonna be museums okay so when I think about these other asks I want to be cognizant of our residents and the type of there's only so much money that they have so I want to make sure that we only ask for needs not once the second proposal with the smaller building footprint and the narrowing of it does make it challenging for me it makes it even harder when we looked at your original numbers there was such a gap in between what the cost was for the new building and what we need which is a police station and we need renovations the town hall right those are needs in order to let cable come in this now narrows that gap so I would love to hear some discussion on it but it makes me more considering of Town Hall and the police station together but I'm I'm not opposed to either one and what I appreciate is this is board has multiple options but there are a lot of asks of our residents and how are we able to tell them that what we're asking for is only the need thank you Michael for addressing my concerns from last meeting I'm in agreement with you Chris as far as the closer we can get this gap together you know close the gap rather so that the the costs of maintaining this building retrofitting it etc and getting it closer to the cost of a newer building

  105. only ask for needs not once the second proposal with the smaller building footprint and the narrowing of it does make it challenging for me it makes it even harder when we looked at your original numbers there was such a gap in between what the cost was for the new building and what we need which is a police station and we need renovations the town hall right those are needs in order to let cable come in this now narrows that gap so I would love to hear some discussion on it but it makes me more considering of Town Hall and the police station together but I'm I'm not opposed to either one and what I appreciate is this is board has multiple options but there are a lot of asks of our residents and how are we able to tell them that what we're asking for is only the need thank you Michael for addressing my concerns from last meeting I'm in agreement with you Chris as far as the closer we can get this gap together you know close the gap rather so that the the costs of maintaining this building retrofitting it etc and getting it closer to the cost of a newer building it makes the decision a lot easier because overall my original thought was just through the police station and keep this building and do what we have to do to it but as far as making sure that we can fit the other departments in here but if the if you continue to make a strong financial case that it's not going to be a significant difference in the cost between keeping this building and building a newer one where it will certainly won't have any surprises to it as far as whether it's future construction costs over the years additional structural problems that may come up then it makes it easier for me to move in the direction of a combined building or larger building which would be probably choice one choice one and the other choice pretty close as far as cost and size so it makes it easier for me to go no either way but certainly a larger building I can go along with that based on the cost differential well thank you Michael for the getting us the information about you know what are we

  106. of maintaining this building retrofitting it etc and getting it closer to the cost of a newer building it makes the decision a lot easier because overall my original thought was just through the police station and keep this building and do what we have to do to it but as far as making sure that we can fit the other departments in here but if the if you continue to make a strong financial case that it's not going to be a significant difference in the cost between keeping this building and building a newer one where it will certainly won't have any surprises to it as far as whether it's future construction costs over the years additional structural problems that may come up then it makes it easier for me to move in the direction of a combined building or larger building which would be probably choice one choice one and the other choice pretty close as far as cost and size so it makes it easier for me to go no either way but certainly a larger building I can go along with that based on the cost differential well thank you Michael for the getting us the information about you know what are we looking at with the age of this building you know and those costs because that's significant I guess you know I'm still in favor of this building is 90 years old I worked in a hundred year old school and the renovations were extensive to the point we moved out HVAC was insane even when they redid it we still had HVAC issues because of the age of the building drilling into concrete walls for some of the technology was challenging I I'm still in favor of even more so now the new building because again what that would do for us is allow this milk this building the administration and the police department to function while a new building is being built as opposed to living through renovation which I have done with some of the schools i've worked in uh it's always a difficult situation there's health concerns noise concerns displacing people all the running around of people some of the schools brought in trailers which is not ideal um so the fact that we would keep this building we could construct

  107. thank you Michael for the getting us the information about you know what are we looking at with the age of this building you know and those costs because that's significant I guess you know I'm still in favor of this building is 90 years old I worked in a hundred year old school and the renovations were extensive to the point we moved out HVAC was insane even when they redid it we still had HVAC issues because of the age of the building drilling into concrete walls for some of the technology was challenging I I'm still in favor of even more so now the new building because again what that would do for us is allow this milk this building the administration and the police department to function while a new building is being built as opposed to living through renovation which I have done with some of the schools i've worked in uh it's always a difficult situation there's health concerns noise concerns displacing people all the running around of people some of the schools brought in trailers which is not ideal um so the fact that we would keep this building we could construct everything move over there and then demolish this and put in even if it's a small part a park that i hear from residents all the time that was something that came up huge and the research that we did about you know our strategic plan we you know we keep running around about parks but um the farm is a great asset which is park-like and the county's gonna do some things there but that's on the other side of the township so i think there's a real value to being able to put a park on this property as part of as part of the renovation uh it wouldn't add a lot of expense and we'd be so safe because our police department would be right here and our ems is right here uh you know so in terms of public safety and location and i i'm i know it's money but you know you said the difference came to about twenty dollars a year twenty dollars for most people is what seems like to get something new

  108. trailers which is not ideal um so the fact that we would keep this building we could construct everything move over there and then demolish this and put in even if it's a small part a park that i hear from residents all the time that was something that came up huge and the research that we did about you know our strategic plan we you know we keep running around about parks but um the farm is a great asset which is park-like and the county's gonna do some things there but that's on the other side of the township so i think there's a real value to being able to put a park on this property as part of as part of the renovation uh it wouldn't add a lot of expense and we'd be so safe because our police department would be right here and our ems is right here uh you know so in terms of public safety and location and i i'm i know it's money but you know you said the difference came to about twenty dollars a year twenty dollars for most people is what seems like to get something new not have all the what-ifs of an ancient aging building would be worth a lot to me. Okay any other comments or questions? Mark? How long will the bond term be? I estimated 25 years but we could consider either a 20 or a 30. Okay and a 30 would reduce the payment in the early years but over the long run we'd be paying more in interest if we did a 30 year. So 25 is that sweet spot? I think 25 is the sweet spot but we we could look at either a 20 or a 20 either 20 25 or 30. You know 20 obviously we're going to pay the least amount of interest but the payments will be higher. 30 payments will be lower pay more interest over time but that you know that wouldn't really affect the first year's rate which is the only rate that we have to present. If we had some strong investment years and like what we've put into the equipment fund

  109. not have all the what-ifs of an ancient aging building would be worth a lot to me. Okay any other comments or questions? Mark? How long will the bond term be? I estimated 25 years but we could consider either a 20 or a 30. Okay and a 30 would reduce the payment in the early years but over the long run we'd be paying more in interest if we did a 30 year. So 25 is that sweet spot? I think 25 is the sweet spot but we we could look at either a 20 or a 20 either 20 25 or 30. You know 20 obviously we're going to pay the least amount of interest but the payments will be higher. 30 payments will be lower pay more interest over time but that you know that wouldn't really affect the first year's rate which is the only rate that we have to present. If we had some strong investment years and like what we've put into the equipment fund would that be appropriate as a use for some of that equipment reserve that we have? Well we're going to be using in in this proposal you you so 30 million of the reserve to construct the building which is why the cost is lower if you're talking in the future if we have call it surplus funds in a budget year I need I don't know if Jason can answer that question if we'd be able to pay it off sooner I guess that's what I'm well we can't pay it off sooner because if we bond bonds have a term right you can't prepay bonds until they reach you know a few years before they're retired but Jason do you know if we can apply budget funds towards a bond you know a bond that's funded by a village or not and then we'd be able to levy less that year I don't know so the question is if we if we have a surplus in a budget year can we apply those funds to towards the payment of these bonds which would mean that we could levy less for the tax that year so the so the in that scenario the bonds have already

  110. present. If we had some strong investment years and like what we've put into the equipment fund would that be appropriate as a use for some of that equipment reserve that we have? Well we're going to be using in in this proposal you you so 30 million of the reserve to construct the building which is why the cost is lower if you're talking in the future if we have call it surplus funds in a budget year I need I don't know if Jason can answer that question if we'd be able to pay it off sooner I guess that's what I'm well we can't pay it off sooner because if we bond bonds have a term right you can't prepay bonds until they reach you know a few years before they're retired but Jason do you know if we can apply budget funds towards a bond you know a bond that's funded by a village or not and then we'd be able to levy less that year I don't know so the question is if we if we have a surplus in a budget year can we apply those funds to towards the payment of these bonds which would mean that we could levy less for the tax that year so the so the in that scenario the bonds have already been sold mm-hmm let's say five years from now okay we have a surplus and we want to take a million dollars and apply it towards the annual payment on the bonds that year so we apply a million dollars and then we have to levy the millage rate less because we we're applying a million dollars to it can we apply operating funds towards a bonded millage I'm not sure I think that'd be, I think, a good question for bond counsel. I mean, financially, it seems like it's plausible. I mean, because, I mean, the board doesn't have to levy the full bond millage in a year. We just want to make sure we can make our principal an interest payment. Right, because the millage will fluctuate based on what our taxable value is for that year. So, we could levy less if we needed, and we only levy what we need to make that year's payment. So, if we apply a million dollars and lower the net payment, we could be able to levy less. I mean, it seems like you should be able to, like, make a transfer in.

  111. for the tax that year so the so the in that scenario the bonds have already been sold mm-hmm let's say five years from now okay we have a surplus and we want to take a million dollars and apply it towards the annual payment on the bonds that year so we apply a million dollars and then we have to levy the millage rate less because we we're applying a million dollars to it can we apply operating funds towards a bonded millage I'm not sure I think that'd be, I think, a good question for bond counsel. I mean, financially, it seems like it's plausible. I mean, because, I mean, the board doesn't have to levy the full bond millage in a year. We just want to make sure we can make our principal an interest payment. Right, because the millage will fluctuate based on what our taxable value is for that year. So, we could levy less if we needed, and we only levy what we need to make that year's payment. So, if we apply a million dollars and lower the net payment, we could be able to levy less. I mean, it seems like you should be able to, like, make a transfer in. I mean, when I'm thinking back to the 2007 to 2009 Township Campus Project, that was a scenario where it was a $26 million bond, but the construction costs came in actually closer to $29, so we allocated transfers out from some of the other funds, general fund, road, senior services, because they were getting, and that money was put into that, either the construction fund or the debt fund, to help pay that overage. And, like, when the library debt retirement fund was coming to an end, because we were not, you know, perfect balancing to the penny each year, there was a fund balance of... for differences of what we collect on taxes to what was actually paid out in principal interest. That final year, we didn't levy the library debt retirement millage. We had enough in fund balance to make that final debt payment. So I mean, it seems plausible, but obviously we would run that by Laura. So on that, and Mark's letting me kind of interject on his time, since we have the campus bond coming off, but that's a dedicated millage, but we also have the pension debt, which we're paying internal

  112. I mean, it seems like you should be able to, like, make a transfer in. I mean, when I'm thinking back to the 2007 to 2009 Township Campus Project, that was a scenario where it was a $26 million bond, but the construction costs came in actually closer to $29, so we allocated transfers out from some of the other funds, general fund, road, senior services, because they were getting, and that money was put into that, either the construction fund or the debt fund, to help pay that overage. And, like, when the library debt retirement fund was coming to an end, because we were not, you know, perfect balancing to the penny each year, there was a fund balance of... for differences of what we collect on taxes to what was actually paid out in principal interest. That final year, we didn't levy the library debt retirement millage. We had enough in fund balance to make that final debt payment. So I mean, it seems plausible, but obviously we would run that by Laura. So on that, and Mark's letting me kind of interject on his time, since we have the campus bond coming off, but that's a dedicated millage, but we also have the pension debt, which we're paying internal and operating, that could go to help subsidize this possibly in some future years, because it's already part of our operating, correct? I'm saying conceptually. Would you agree, Michael? Well, conceptually, when those pension bonds are paid off, that'll free up $5 million in our operating budget. However, Jason and I have done a forecast, and our expenses may grow faster than our tax revenue at that point, if inflation comes down and our tax revenue goes up by less. So conservatively speak, let me rephrase. What you're saying is correct. Yes, we would have money when the pension bonds are paid off. However, conservatively, we would want to make sure that we don't allocate those funds today, because in six or seven years. we're not going to know what we're collecting in taxes versus what our expenses are going to be so then we also can't tell our residents that we can utilize necessarily always utilize some of our operating reserves to subsidize this so if we vote on this we have to determine whatever year we go through

  113. have the pension debt, which we're paying internal and operating, that could go to help subsidize this possibly in some future years, because it's already part of our operating, correct? I'm saying conceptually. Would you agree, Michael? Well, conceptually, when those pension bonds are paid off, that'll free up $5 million in our operating budget. However, Jason and I have done a forecast, and our expenses may grow faster than our tax revenue at that point, if inflation comes down and our tax revenue goes up by less. So conservatively speak, let me rephrase. What you're saying is correct. Yes, we would have money when the pension bonds are paid off. However, conservatively, we would want to make sure that we don't allocate those funds today, because in six or seven years. we're not going to know what we're collecting in taxes versus what our expenses are going to be so then we also can't tell our residents that we can utilize necessarily always utilize some of our operating reserves to subsidize this so if we vote on this we have to determine whatever year we go through whether it's a 20 or 25 or 30 that this will be the maximum out that they could do we can't promise any difference that'd be a fair statement yes no no problem the very good questions based on the amount of cash that's gone into the capital reserve contribution fund over the last six years and if everything that's been discussed earlier today is accurate why would we need a dedicated bond millage to support the project um because the total cost of the project looking at um let's say the 27,500 numbers with a 220 by 125 the total cost of the project for proposal one would be a little over 80 million um we're going to use 20 of that 30 10 of it would be used for fire station 3 the other 20 million would go to reduce that cost down to 60 million so we'd only be bonding for 60 million even though the project

  114. this so if we vote on this we have to determine whatever year we go through whether it's a 20 or 25 or 30 that this will be the maximum out that they could do we can't promise any difference that'd be a fair statement yes no no problem the very good questions based on the amount of cash that's gone into the capital reserve contribution fund over the last six years and if everything that's been discussed earlier today is accurate why would we need a dedicated bond millage to support the project um because the total cost of the project looking at um let's say the 27,500 numbers with a 220 by 125 the total cost of the project for proposal one would be a little over 80 million um we're going to use 20 of that 30 10 of it would be used for fire station 3 the other 20 million would go to reduce that cost down to 60 million so we'd only be bonding for 60 million even though the project is 80. And so we do need a dedicated millage to be able to fund that $60 million because we don't have the internal cash flow to be able to support that debt service. Even though we generated $30 million in capital cash reserves since 2021? Right. And I think that the way I would answer that is there were some unique circumstances over the last five years that allowed us to generate those kind of surpluses that I don't think will continue going forward. Is that a fair statement, Jason? Yes. What are those unique circumstances? The fact that inflation, economic inflation, macroeconomically, was 7%, which meant that property tax revenue, our taxable values went up by 5% because it's capped at 5%. But our expenses did not go up by 5% because the majority of our expenses are labor costs. And we were in six-year contracts with our unions. And so the labor costs were fixed based on those six-year contracts. But yet our

  115. is 80. And so we do need a dedicated millage to be able to fund that $60 million because we don't have the internal cash flow to be able to support that debt service. Even though we generated $30 million in capital cash reserves since 2021? Right. And I think that the way I would answer that is there were some unique circumstances over the last five years that allowed us to generate those kind of surpluses that I don't think will continue going forward. Is that a fair statement, Jason? Yes. What are those unique circumstances? The fact that inflation, economic inflation, macroeconomically, was 7%, which meant that property tax revenue, our taxable values went up by 5% because it's capped at 5%. But our expenses did not go up by 5% because the majority of our expenses are labor costs. And we were in six-year contracts with our unions. And so the labor costs were fixed based on those six-year contracts. But yet our tax revenue went up by that increase in inflation. So the reason I say it's not likely to happen again is because, you know, we can't count on the fact that inflation is going to be 7% or even 5%. I hope it's not. Nobody wants inflation to be 5%, but this past year, the inflation rate was set at 2.7%, and going forward, I would expect inflation, the inflation rate's probably going to be between 2.5 and 3%. And then one other thing that happened during that time, we also went self-insured, which worked out timing-wise specifically on some of our health care costs that honestly worked out timing-wise perfectly, and that wasn't exactly how it was originally set up, right? It was a good plan, and it just worked out really well, which helped some of our reserves during that time. Correct, Michael? Yeah, I mean, I would say that, I mean, there was really a confluence of events. One is what I said, that the labor costs were fixed. The second is, like you said, we went self-insured back in 2020, and was it 2020 or 18? I think it was 2020, I think. 18? 2020. 2020. So we went, yeah, so we went self-insured in 2020, and the result of that was far better than we expected, in terms of the savings on our costs, and while everybody else that was paying fully insured was 8% trend increase, we saw far less than that.

  116. And so the labor costs were fixed based on those six-year contracts. But yet our tax revenue went up by that increase in inflation. So the reason I say it's not likely to happen again is because, you know, we can't count on the fact that inflation is going to be 7% or even 5%. I hope it's not. Nobody wants inflation to be 5%, but this past year, the inflation rate was set at 2.7%, and going forward, I would expect inflation, the inflation rate's probably going to be between 2.5 and 3%. And then one other thing that happened during that time, we also went self-insured, which worked out timing-wise specifically on some of our health care costs that honestly worked out timing-wise perfectly, and that wasn't exactly how it was originally set up, right? It was a good plan, and it just worked out really well, which helped some of our reserves during that time. Correct, Michael? Yeah, I mean, I would say that, I mean, there was really a confluence of events. One is what I said, that the labor costs were fixed. The second is, like you said, we went self-insured back in 2020, and was it 2020 or 18? I think it was 2020, I think. 18? 2020. 2020. So we went, yeah, so we went self-insured in 2020, and the result of that was far better than we expected, in terms of the savings on our costs, and while everybody else that was paying fully insured was 8% trend increase, we saw far less than that. And some of that may have been related to COVID as well, but the health care costs were a huge savings, and then the other part is, you know, with inflation being so high, interest rates were. were high uh and so we were generating more than expected uh interest earnings well and the unfortunate side that we don't want to think about or talk about too much is you know we did have a recession back in what 2008 9 10 right property values fell and eventually the you know the rates on our taxes for those properties were reduced and so if if the taxes value go down instead of flat or up that would cause a huge you know cash constraint or budget constraint right i i i would answer that by saying that because our um average taxable value is so far below our scvs our assessed

  117. 18? 2020. 2020. So we went, yeah, so we went self-insured in 2020, and the result of that was far better than we expected, in terms of the savings on our costs, and while everybody else that was paying fully insured was 8% trend increase, we saw far less than that. And some of that may have been related to COVID as well, but the health care costs were a huge savings, and then the other part is, you know, with inflation being so high, interest rates were. were high uh and so we were generating more than expected uh interest earnings well and the unfortunate side that we don't want to think about or talk about too much is you know we did have a recession back in what 2008 9 10 right property values fell and eventually the you know the rates on our taxes for those properties were reduced and so if if the taxes value go down instead of flat or up that would cause a huge you know cash constraint or budget constraint right i i i would answer that by saying that because our um average taxable value is so far below our scvs our assessed values it would take a significant uh decline in property values before we would see a decrease in our property taxes it would have to be almost 2008 levels where we saw 20 to 25 percent property value decreases before we would see any impact too well we certainly hope we don't see an economy like that again you know worst case that could be very difficult yes for a lot of reasons okay any other comments now close the discussion and move on to item uh 5a approved board minutes of july 13th mark you Yes, in my motion I cited a reason for the delay to table the discussion and I would like that included in the minutes. So I wanted to thank you, Mark, for writing me about your observations concerning the draft minutes. One suggestion I took I thought was accurate and correct, the other one concerning the statement I reviewed it really closely and I think the minutes accurately reflect the motion.

  118. answer that by saying that because our um average taxable value is so far below our scvs our assessed values it would take a significant uh decline in property values before we would see a decrease in our property taxes it would have to be almost 2008 levels where we saw 20 to 25 percent property value decreases before we would see any impact too well we certainly hope we don't see an economy like that again you know worst case that could be very difficult yes for a lot of reasons okay any other comments now close the discussion and move on to item uh 5a approved board minutes of july 13th mark you Yes, in my motion I cited a reason for the delay to table the discussion and I would like that included in the minutes. So I wanted to thank you, Mark, for writing me about your observations concerning the draft minutes. One suggestion I took I thought was accurate and correct, the other one concerning the statement I reviewed it really closely and I think the minutes accurately reflect the motion. The others were supporting statements and not part of the motion itself. My deputy clerk reviewed it, she agreed. So my position is that the minutes accurately reflect the content of your motion. I'd like to make a motion to approve the minutes. Support. Support. All in favor say aye. Aye. Any opposed? Passes 7-0. Item number B, Approved Payroll and Vouchers for July 27, 2026. Mark. My no vote still stands. I think we should be allocating the investment income based on fund balances for RETA. So I can't in good conscience approve the motion. Make a motion we approve. Support. All in favor say aye. Aye. Aye. Any opposed? Passes 7-0. Nay. Nay for me. Six to one. Six to one. Mark's a nay. Okay. Item number E. accept treasurer's quarterly investment report mark yep i've got a motion i'd like to make um i i would like to make a motion to all the way down yes to martin so he has a copy so he concluded in the minutes i'd like to make a resolution approving a board adopted methodology

  119. The others were supporting statements and not part of the motion itself. My deputy clerk reviewed it, she agreed. So my position is that the minutes accurately reflect the content of your motion. I'd like to make a motion to approve the minutes. Support. Support. All in favor say aye. Aye. Any opposed? Passes 7-0. Item number B, Approved Payroll and Vouchers for July 27, 2026. Mark. My no vote still stands. I think we should be allocating the investment income based on fund balances for RETA. So I can't in good conscience approve the motion. Make a motion we approve. Support. All in favor say aye. Aye. Aye. Any opposed? Passes 7-0. Nay. Nay for me. Six to one. Six to one. Mark's a nay. Okay. Item number E. accept treasurer's quarterly investment report mark yep i've got a motion i'd like to make um i i would like to make a motion to all the way down yes to martin so he has a copy so he concluded in the minutes i'd like to make a resolution approving a board adopted methodology for allocation of investment income and amending the treasury report whereas the board finds that michigan law requires the township investment policy to be adopted by the board and that the policy should include a written board approved methodology for allocating investment income among pooled funds to ensure consistency transparency and accurate financial reporting and whereas the board further finds that the township has not adopted a written board approved methodology for allocating investment income and that prior audited financial statements described in allocation methodology that differs from the methodology currently being applied by the township making it necessary for the board to formally adopt and document the government governing methodology and whereas the board of directors has reviewed the treasury report for the reporting period and whereas the board has determined that the method used to allocate and report investment income should be amended to more accurately reflect the allocation of investment earnings among the funds the funds

  120. concluded in the minutes i'd like to make a resolution approving a board adopted methodology for allocation of investment income and amending the treasury report whereas the board finds that michigan law requires the township investment policy to be adopted by the board and that the policy should include a written board approved methodology for allocating investment income among pooled funds to ensure consistency transparency and accurate financial reporting and whereas the board further finds that the township has not adopted a written board approved methodology for allocating investment income and that prior audited financial statements described in allocation methodology that differs from the methodology currently being applied by the township making it necessary for the board to formally adopt and document the government governing methodology and whereas the board of directors has reviewed the treasury report for the reporting period and whereas the board has determined that the method used to allocate and report investment income should be amended to more accurately reflect the allocation of investment earnings among the funds the funds on their respective balances during the reporting period and whereas the board finds that allocating investment income using each funds three-month weighted average fund balance provides a fair and equitable methodology for distributing investment earnings now therefore be it resolved that the board of directors hereby approves an amendment to the Treasury report to allocate investment income based on each funds three-month weighted average fund balance for the current reporting period and for all future reporting periods unless otherwise amended by subsequent action of the board be a further resolved that the Treasurer is authorized and directed to revise the Treasury report to reflect this methodology and apply this calculation in the allocation of investment income for the current reporting period and all future reporting periods be a further resolved that this amendment shall become effective immediately upon adoption of this resolution and shall be incorporated into the officially trip and into the official Treasury report presented to the board be a further resolved that this methodology shall be incorporated into the Township's written investment policy Treasury reporting procedure and future financial

  121. on their respective balances during the reporting period and whereas the board finds that allocating investment income using each funds three-month weighted average fund balance provides a fair and equitable methodology for distributing investment earnings now therefore be it resolved that the board of directors hereby approves an amendment to the Treasury report to allocate investment income based on each funds three-month weighted average fund balance for the current reporting period and for all future reporting periods unless otherwise amended by subsequent action of the board be a further resolved that the Treasurer is authorized and directed to revise the Treasury report to reflect this methodology and apply this calculation in the allocation of investment income for the current reporting period and all future reporting periods be a further resolved that this amendment shall become effective immediately upon adoption of this resolution and shall be incorporated into the officially trip and into the official Treasury report presented to the board be a further resolved that this methodology shall be incorporated into the Township's written investment policy Treasury reporting procedure and future financial statement disclosures so that all governing documents consistently describe the board approved allocation method I'd like to make a point of order that, um, number one, we are not a board of directors. We are a board of trustees. And number two, this would directly be in contravention to MCL 41.77, subsection two, which says that all investment income earned by township funds goes into the general fund. And as such, I, I would ask the chair to roll it out of order. Okay. And also I would suggest Mark in the future, if you want to do a motion to, to enter it earlier, so we have time to study it before we come into our meeting as well. It might be very helpful. I would confirm my interpretation of MCL, uh, 41.77, subsection two would prohibit the adoption of the resolution as stated, and so I would not recommend that it be adopted. Okay. And what's the, it's because I do not include the transfer from the general fund? Correct. It directly allocates investment income into the, into the funds which they come from. That's impermissible. It has to go to the general fund and subsequently be allocated back out. Yeah. Okay. Okay. So

  122. written investment policy Treasury reporting procedure and future financial statement disclosures so that all governing documents consistently describe the board approved allocation method I'd like to make a point of order that, um, number one, we are not a board of directors. We are a board of trustees. And number two, this would directly be in contravention to MCL 41.77, subsection two, which says that all investment income earned by township funds goes into the general fund. And as such, I, I would ask the chair to roll it out of order. Okay. And also I would suggest Mark in the future, if you want to do a motion to, to enter it earlier, so we have time to study it before we come into our meeting as well. It might be very helpful. I would confirm my interpretation of MCL, uh, 41.77, subsection two would prohibit the adoption of the resolution as stated, and so I would not recommend that it be adopted. Okay. And what's the, it's because I do not include the transfer from the general fund? Correct. It directly allocates investment income into the, into the funds which they come from. That's impermissible. It has to go to the general fund and subsequently be allocated back out. Yeah. Okay. Okay. So I'm, I'm going to ask if there's any support. There being no support, the motion fails. All right. And then next is item. We have to, we have to approve the two. I would like to make a motion that we approve the Treasurer's quarterly. Accept, accept, accept. Accept. Sorry. Accept the Treasurer quarterly report as submitted. Support. All in favor say aye. Aye. Any opposed? Nay. Nay. Okay. Passes six to one. Thank you. And I'll move to adjourn. I would like to make a motion to adjourn. All right. We are adjourned. Thank you, everyone. And all you watching from around the world.