Source: Sherman Publications

Officials debate what to do with $224K in surplus funds

by CJ Carnacchio

July 20, 2011

Whenever local governments discuss money these days, it seems like the topic is always how they don’t have enough.

Not Oxford Township.

Officials last week discussed what to do with $223,927 in unspent funds from the township’s 2010 fiscal year.

Rather than do nothing with the money and simply add it to the general fund’s fund balance – which as of Dec. 31, 2010 had grown to $2.026 million – Trustee Mike Spisz suggested allocating the $223,927 to various township funds.

He proposed splitting it up in the following manner – 40 percent to the safety path fund; 40 percent to the roads fund; 10 percent toward salary increases for the 2012 fiscal year; 5 percent for equipment upgrades such as computers, servers and software; and 5 percent toward improving the township boundary signs along M-24 on the north and south ends.

Spisz indicated he gets lots of inquiries from residents about safety paths.

“They all keep asking the same questions,” he said. “When are we going to have safety paths to the parks? When are we going to have safety paths that connect everything to the downtown?”

Spisz noted he realizes $89,570 (40 percent) wouldn’t be enough to construct a safety path, but it would be enough to get the legwork done for a future project should more grant monies become available.

Ultimately, his proposal failed 5-1.

“If you don’t agree with the breakdown, I’m open,” Spisz said. “I just threw some ideas out there.”

“I’m not for it,” said Supervisor Bill Dunn. “We’ve got so much on our plate. We’ve got Elkview. We’ve some wells that are going out. We’ve got bonds that are coming up. I think there’s a lot more important things than more safety paths at this present time. I’m in full support of supplying that type of stuff when we’re flush, but we’re not.”

The issues Dunn referred to were:

n Fixing the road and drainage issues in the Elkview Estates subdivision, for which the township previously agreed to pay 65 percent of the total cost. The last project estimate was $325,000 back in 2009.

n Three out of the four township wells at Seymour Lake and Dunlap roads are off-line due to various problems. The township’s already agreed to spend up to $42,000 on one well. As for the other two wells, one is covered by warranty, while the other is a complete unknown. It’s unknown at this time if it can be repaired or if a new one will have to be drilled. It’s also unknown if the township’s going to have to pay for it or sue to get the money from the responsible party or parties.

n The township still owes approximately $14.48 million in bond debt (principal plus interest) for improvements made to its water system. The municipality makes two bond payments a year totaling about $915,000, according to Treasurer Joe Ferrari. The bond is set to be paid off in April 2031.

Dunn said the biggest concern is the water bond debt because the township’s not getting the growth it expected – and needed – to help pay for the improvements.

“What happens when we don’t have money for the bond?” he said. “Guess where they’re going to come for it? From the general fund.”

Even though the water debt is currently being paid with charges levied against system users, if for some reason in the future the township’s water fund doesn’t have enough to cover its bond payments, officials could be forced to dip into the general fund to cover them because the “full faith and credit” of the municipality was pledged to pay off the debt.

Trustee Buck Cryderman suggested perhaps the extra money should be used to give the taxpayers a break.

“Maybe we ought to cut the taxes,” he said. “Maybe we’re making too much money. That’s a possibility because we do have a lot of money.”

Given the uncertain state of the economy, Trustee Sue Bellairs favored playing it safe with the extra funds.

“The economy is going down. It isn’t going up,” she said. “I just think that we need to be a little bit more conservative . . . We are in strange times that haven’t happened (before) in this board’s lifetime. We’re going to get less and less money.”

Bellairs isn’t in favor of placing the extra money in funds where she knows it’s going to disappear. “I am for allocating it, but I know darn well if it goes into that safety path fund, that money will be spent,” she said.

Bellairs indicated she’s in favor of putting some money into the township’s building and site fund, then at some point, using it to complete the lower level of the township hall, which was left unfinished when it was built due to a lack of funds at the time. She suggested the space could be used to house the Oakland County Sheriff’s substation as opposed to leasing space from the private party as is done now.

Spisz noted allocating the extra money to various township funds “doesn’t mean you have to spend” it. “You’re just going to put it into those accounts,” he said. “We, as a board, still have to approve (spending) those monies.”

In the end, township officials agreed to discuss what to do with the excess funds when they begin their 2012 budget discussions in September.