Charter Township of Orion
Oakland County, Michigan

Township Board

Minutes, Special Meeting, Saturday, July 12, 2008
Capital Improvement Plan & Five Year Financial Plan Workshop

  The Charter Township of Orion Board of Trustees held a special meeting, in the form of a Board workshop, on Saturday, July 12, 2008, at the Orion Township Hall, 2525 Joslyn Road, Lake Orion, Michigan for the purpose of a discussion with Plante & Moran, Township auditors, regarding the development of a Capital Improvement Plan (CIP) and a 5-Year Financial Plan.  Supervisor Dywasuk called the special meeting to order at 8:45 a.m.

2.  BOARD MEMBERS PRESENT: Dywasuk, Young, Bastian, Garlicki, Porter, Steimel, Gibb (9:05 a.m.).

OTHERS PRESENT: Beth Bialy, Dan Myslakowski

3.  APPROVAL OF AGENDA.  Moved by Steimel, seconded by Young, to approve the Agenda as presented.  MOTION CARRIED.

4.  BOARD WORKSHOP.  Beth Bialy, Plante & Moran, Township auditors, facilitated the workshop, walking the Township Board through the process for long-range budgeting, or doing a 5-year forecast, to be a rolling plan that would be used as a management tool.  [Hand-outs: Overview (including items from Board goals workshop of 2005); Find Your Path to Fiscal Sustainability: A Planning Process (excerpts – flow chart, department prioritization matrix, comparison prioritization method); a copy of the Township L-4029 Form – 2007 Tax Rate Request, submitted annual to the County Equalization Department; City of Lincoln Park Five-Year Financial Forecast; City of Lincoln Park Capital Needs Survey; Find Your Path to Fiscal Sustainability: A Planning Process (copy of PowerPoint slides); and Revenue Producing and Cost Cutting Checklist.]

The goal would be to get a plan in place, which would be reviewed after a few years.  The Township needs to determine where we are today and where we will be in 5 years, looking at the long-range impact if we do certain projects.  The Township’s current fund balance amount is approximately 82% of the General Fund budget; Plante & Moran usually recommends that a community have a 10%-20% fund balance (or maybe up to 40%, in some cases).  The fund balance should be used as a cushion, to guard against shortfalls or unplanned expenditures as unexpected situations arise. 

It was noted that Orion Township has a voted millage of 1.41 mills for the General Fund, which has been rolled back to .9322 mill.  In the last few years, the Board has voted to roll the millage rate back even further, to .8200 mill.

Board discussion of what was hoped to be accomplished during the workshop; current economic conditions; doing a review of Township assets; a safety path maintenance fund, for future self-sufficiency; request to understand the Water & Sewer Fund, as an enterprise fund; and how the Township could borrow from itself to move forward with certain projects.

Ms. Bialy explained the 5-Year Forecast: it is a rolling budget plan, with 3 years of historical information, the current budget, and looking 5 years into the future.  The Township Board might want to look at the General Fund, Fire Fund, Police Fund, and Host Fee Fund.  Because of the potential decrease in property tax revenue (3%-7% annually) during the next few years, Plante & Moran could assist the Township in looking at different scenarios with regard to revenues and expenditures.  [She cited the City of Lincoln Park (hand-out materials).]  It was noted that Orion Township is in good financial shape in comparison with many other municipalities, especially because the retirement plan for employees is a “defined contribution” plan rather than a “defined benefit” plan.  Ms. Bialy reviewed how the Township could use a Capital Needs Survey to rate priorities of proposed expenditures; she referred to the “incremental-based” budgeting that the Township uses, as opposed to “zero-based” budget (which means departments would have to start from scratch to develop their budget each year).  She discussed the flow charts which were used in the Fiscal Sustainability seminar that Plante & Moran recently held for their clients (Mr. Dywasuk, Ms. Bastian, and Ms. Armstrong attended).

Board discussion of looking at two budgets: one if millages are approved and one if they are not; that the safety path fund budget is being submitted in that dual format for 2009; separating out capital expenditures from operating expenses; the difficulty in long-range planning when the Township Board membership changes every few years; the plan needs to be built and then implemented (referring to the recently adopted Parks & Recreation Master Plan); using Plante & Moran to guide the Township; staffing needs; contracting for services vs accomplishing the same work with in-house staff; that HR is not commonly outsourced, in P& M’s experience; using Township accounting staff to assist in moving the process forward: in producing the different financial scenarios; public perception; and how best to proceed, following this workshop.

It was Board consensus for Ms. Bialy to prepare a proposal for the Township to consider at the July 30, 2008 meeting, with approximate costs included and a variety of different options to consider as to how to go forward.  She proposes to submit a proposal for the following: base (historical) information; facility; capital improvement plan, including Department Head survey; future workshop to rate services; renovation of Township Hall; and cost estimates if Plante & Moran does all the work vs if Township staff does some of the work.

With regard to the Public Safety Complex, there was interest in the cost of that project appearing in the proposed 2009 budgets for various departments.

5.  PUBLIC COMMENT.   Dan Myslakowski, citizen, commented on budgeting using incremental increases.

6.  ADJOURNMENT.  Moved by Young, seconded by Porter, to adjourn.  MOTION CARRIED.  The meeting was adjourned at 11:40 a.m.