To: Martin L. Cousineau, Finance Committee Chairperson
From: Chrystal Simpson, Chief Financial Officer
title
RE: Approval of the fiscal year 2023 Deficit Elimination Plan and directing the Office of Fiscal Services to submit the plan to the State of Michigan
recommendation
BOARD ACTION REQUESTED:
Approval of amended 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 will be filed timely for the year ended September 30, 2023, 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 in fiscal year ending September 30, 2024. Genesee Health System Millage which is the result of a property tax chargeback that will be resolved in fiscal year ending September 30, 2024. 2018 Capital Improvement Bond Fund and the Hughes & Hatcher Center Debt Service Fund have a deficit due to bond interest payment being due October 1st and the Fund making the payment in September before the payment is due and these should be resolved by fiscal year ending September 30, 2028.
IMPACT ON HUMAN RESOURCES:
N/A
IMPACT ON BUDGET:
N/A
IMPACT ON FACILITIES:
N/A
IMPACT ON TECHNOLOGY:
N/A
CONFORMITY TO COUNTY PRIORITIES:
Monitoring of funds with deficits aligns with the Long-Term Financial Stability priority.
rTO 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 $850,421 on September 30, 2023; 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, IT IS RESOLVED that the County of Genesee’s legislative body adopts the following as the Vehicles and Equipment Fund Deficit Elimination Plan:
|
|
2024 |
|
Unrestricted Net Position (Deficit) Oct. 1 |
$(2,240,954) |
|
|
|
|
Revenue |
|
|
Charges to other Funds |
2,009,800 |
|
Investment Income |
7,200 |
|
Gain on Sale of Assets |
80,000 |
|
Transfers In |
1,220,000 |
|
Total Revenue |
3,317,000 |
|
|
|
|
Expenditures |
|
|
Salaries and Fringe Benefits |
225,800 |
|
Supplies and other operating expenses |
1,496,800 |
|
Depreciation |
800,000 |
|
Total Expenditures |
2,522,600 |
|
|
|
|
Add Back Depreciation (Net Investment in Capital Assets Net Position) |
800,000 |
|
|
|
|
Unrestricted Net Position (Deficit) Sept. 30 |
$(646,554) |
|
|
2024 |
|
CA-CL (Deficit) Oct. 1 |
$(850,421) |
|
Revenues |
3,317,000 |
|
Expenditures |
(2,522,600) |
|
Add Back Depreciation |
800,000 |
|
CA-CL (Deficit) Sept. 30 |
$743,979 |
Explanation: Increase charges to other funds by approximately 2% in 2024 and another year of transfers in of $1,220,000.
BE IT FURTHER RESOLVED that the County of Genesee’s Chief Financial Officer submits the Deficit Elimination Plan to the Michigan Department of Treasury for certification.
WHEREAS, the County of Genesee’s Genesee Health System Millage Fund has an unrestricted fund balance deficit of $16,142 on September 30, 2023; 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, IT IS RESOLVED that the County of Genesee’s legislative body adopts the following as the Genesee Health System Millage Fund Deficit Elimination Plan:
|
|
2024 |
|
Unrestricted Fund Balance (Deficit) Oct. 1 |
$(16,142) |
|
|
|
|
Revenue |
|
|
Taxes |
10,275,800 |
|
|
|
|
Expenditures |
|
|
Supplies and Other Operating Expenditures |
10,259,658 |
|
|
|
|
|
|
|
Unrestricted Fund Balance Sept. 30 |
$- |
|
|
|
|
|
|
Explanation: This deficit was the result of a property tax chargeback. In 2024, the taxes collected by the millage are expected to increase by $201,415. The expenditures paid for 2024 will be less than the taxes collected by $16,142 to recover the chargeback amount.
BE IT FURTHER RESOLVED that the County of Genesee’s Chief Financial Officer submits the Deficit Elimination Plan to the Michigan Department of Treasury for certification.
WHEREAS, the County of Genesee’s 2018 Capital Improvement Bond Debt Service Fund has an unrestricted fund balance deficit of $205,103 on September 30, 2023; 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, IT IS RESOLVED that the County of Genesee’s legislative body adopts the following as the 2018 Capital Improvement Bond Fund Deficit Elimination Plan:
|
|
2024 |
2025 |
2026 |
|
Unrestricted Fund Balance (Deficit) Oct. 1 |
$(205,103) |
$(187,741) |
$(169,751) |
|
|
|
|
|
|
|
|
|
|
|
Expenditures |
|
|
|
|
Principal |
970,000 |
1,005,000 |
1,040,000 |
|
Interest |
409,374 |
374,648 |
338,668 |
|
Other |
500 |
500 |
500 |
|
Total Expenditures |
1,379,874 |
1,380,148 |
1,379,168 |
|
|
|
|
|
|
Other Financing Sources |
|
|
|
|
Transfers In |
1,397,236 |
1,398,138 |
1,548,919 |
|
|
|
|
|
|
Unrestricted Fund Balance Sept. 30 |
$(187,741) |
$(169,751) |
$- |
Explanation: Increase transfers in by $150,781 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 service payments.
BE IT FURTHER RESOLVED that the County of Genesee’s Chief Financial Officer submits the Deficit Elimination Plan to the Michigan Department of Treasury for certification.
WHEREAS, the County of Genesee’s Hughes & Hatcher Center Debt Service Fund has an unrestricted fund balance deficit of $33,975 that is not a result of deferred inflows for unavailable revenue on September 30, 2023; 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, IT IS RESOLVED that the County of Genesee’s legislative body adopts the following as the Hughes & Hatcher Center Debt Service Fund Deficit Elimination Plan:
|
|
2024 |
2025 |
2026 |
2027 |
2028 |
|
Unrestricted Fund Balance (Deficit) Oct. 1 |
$(33,975) |
$(30,975) |
$(26,925) |
$(21,030) |
$(12,555) |
|
Revenue |
|
|
|
|
|
|
Rental Income |
150,950 |
152,500 |
154,500 |
156,950 |
160,615 |
|
Expenditures |
|
|
|
|
|
|
Principal |
80,000 |
85,000 |
90,000 |
95,000 |
100,000 |
|
Interest |
67,200 |
62,700 |
57,855 |
52,725 |
47,310 |
|
Other |
750 |
750 |
750 |
750 |
750 |
|
Total Expenditures |
147,950 |
148,450 |
148,605 |
148,475 |
148,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrestricted Fund Balance Sept. 30 |
$(30,975) |
$(26,925) |
$(21,030) |
$(12,555) |
$- |
Explanation: Increase rental income each year from 2024 through 2028 to align with required principal and interest payments on the debt and to eliminate the unrestricted fund balance deficit. Expenditures are increased or decreased each year to agree to required debt service payments.
BE IT FURTHER RESOLVED that the County of Genesee’s Chief Financial Officer submits the Deficit Elimination Plan to the Michigan Department of Treasury for certification.