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File #:
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RES-2025-1376
Version:
1
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Type:
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Resolution
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Status:
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Referred
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On agenda:
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4/23/2025
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Final action:
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Title:
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RE: Approval of the fiscal year 2024 Deficit Elimination Plan and directing the Department of Fiscal Services to submit the plan to the State of Michigan
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To: Martin L. Cousineau, Finance Committee Chairperson
From: Chrystal Simpson, Chief Financial Officer
title
RE: Approval of the fiscal year 2024 Deficit Elimination Plan and directing the Department of Fiscal Services to submit the plan to the State of Michigan
recommendation
BOARD ACTION REQUESTED:
Approval of the deficit elimination plan to be submitted to the State.
BACKGROUND:
In accordance with Public Act 140 of 1971, a local unit of government ending its fiscal year in a deficit condition shall formulate and file a Deficit Elimination Plan (DEP) with the Department of Treasury within 30 days of receiving a letter after the filing of the County’s Annual Comprehensive Financial Report (ACFR).
DISCUSSION:
The county’s ACFR was filed timely for the year ended September 30, 2024, as required, with the Michigan Department of Treasury. The DEP must be certified by Treasury for the County to obtain “qualified status”. Qualified status is required before the County can issue bonds or notes, such as the annual delinquent tax notes issue.
The deficit elimination plan is outlined in the resolution which includes the following Funds:
Vehicles and Equipment Fund which should be resolved by fiscal year ending
September 30, 2026. During the budget process for fiscal year ending September 30, 2025, the rates for motor pool were re-evaluated as the cost for vehicles and upfitting has increased significantly. As a result of the rate changes, the revenue for the use of vehicles was projected to increase 19%. This increase in revenue will aid in resolving the deficit that existed as of September 30, 2024, whereby the current assets exceeded the current liabilities in that fund by $1,647,731.
2018 Capital Improvement Bond Fund has a deficit due to the bond interest payment being due October 1st and the Fund making the payment in September before the payment is due and this should be resolved by fiscal year ending September 30, 2026.
IMPACT ON HUMAN RESOURCES:
None.
IMPACT ON BUDGET:
None.
IMPACT ON FACILITIES:
None.
IMPACT ON TECHNOLOGY:
None.
CONFORMITY TO COUNTY PRIORITIES:
Monitoring of funds with deficits aligns with the Long-Term Financial Stability priority.
resolution
TO THE HONORABLE CHAIRPERSON AND MEMBERS OF THE GENESEE COUNTY BOARD OF COMMISSIONERS, GENESEE COUNTY, MICHIGAN
LADIES AND GENTLEMEN:
WHEREAS, the County of Genesee’s Vehicles and Equipment Fund has a current asset minus current liability deficit of $1,647,731 on September 30, 2024; and
WHEREAS, the County of Genesee’s 2018 Capital Improvement Bond Debt Service Fund has an unrestricted fund balance deficit of $187,740 on September 30, 2024; and
WHEREAS, 1971 PA 140 requires that a Deficit Elimination Plan be formulated by the local unit of government and filed with the Michigan Department of Treasury.
NOW, THEREFORE, BE IT RESOLVED, that the County of Genesee’s legislative body adopts the following as the Vehicles and Equipment Fund Deficit Elimination Plan:
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2025 |
2026 |
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Unrestricted Net Position (Deficit) Oct. 1 |
$(3,037,656) |
$(1,489,186) |
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Revenue |
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Charges to other Funds |
2,264,400 |
2,309,700 |
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Investment Income |
4,500 |
4,680 |
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Gain on Sale of Assets |
240,000 |
245,000 |
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Transfers In |
1,000,159 |
1,000,000 |
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Total Revenue |
3,509,059 |
3,559,380 |
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Expenditures |
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Salaries and Fringe Benefits |
442,496 |
455,770 |
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Supplies and other operating expenses |
1,518,093 |
1,548,455 |
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Depreciation |
1,200,000 |
1,250,000 |
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Total Expenditures |
3,160,589 |
3,254,225 |
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Add Back Depreciation (Net Investment in Capital Assets Net Position) |
1,200,000 |
1,250,000 |
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Unrestricted Net Position (Deficit) Sept. 30 |
$(1,489,186) |
$65,969 |
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2025 |
2026 |
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CA-CL (Deficit) Oct. 1 |
$(1,647,731) |
$(99,261) |
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Revenues |
3,509,059 |
3,559,380 |
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Expenditures |
(3,160,589) |
(3,254,225) |
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Add Back Depreciation |
1,200,000 |
1,250,000 |
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CA-CL (Deficit) Sept. 30 |
$(99,261) |
$1,455,894 |
Explanation: Rates for charges to other funds were reviewed during the FYE 2025 budget process and increased by approximately 19%. Increase charges to other funds by approximately 2% in 2026.
BE IT FURTHER RESOLVED, that the County of Genesee’s legislative body adopts the following as the 2018 Capital Improvement Bond Fund Deficit Elimination Plan:
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2025 |
2026 |
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Unrestricted Fund Balance (Deficit) Oct. 1 |
$(187,740) |
$(169,750) |
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Expenditures |
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Principal |
1,005,000 |
1,040,000 |
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Interest |
374,648 |
338,668 |
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Other |
500 |
500 |
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Total Expenditures |
1,380,148 |
1,379,168 |
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Other Financing Sources |
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Transfers In |
1,398,138 |
1,548,918 |
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Unrestricted Fund Balance Sept. 30 |
$(169,750) |
$- |
Explanation: Increase transfers in by $150,780 from 2025 to 2026 to align with required principal and interest payments on the debt and to eliminate the unrestricted fund balance deficit with a transfer from General Fund. Expenditures are increased or decreased each year to agree to required debt services payments.
BE IT FURTHER RESOLVED, that the County of Genesee’s Chief Financial Officer is directed to submit the Deficit Elimination Plans to the Michigan Department of Treasury for certification.
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