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2018-10-10 / Front Page

Town Meeting Makes Village Finances More Transparent

Brian Camiller, on stage, CPA of the firm Plante Moran explained the ins and outs of the Newberry Village finances of the last ten years last Wednesday evening. Brian Camiller, on stage, CPA of the firm Plante Moran explained the ins and outs of the Newberry Village finances of the last ten years last Wednesday evening. Wednesday evening, October 3 approximately 40 to 50 people filed into the Bystrom Auditorium at Tahquamenon Area Schools to get a clearer picture of the overall financial health of the Village of Newberry.

Eric Cline, a department manager for the Michigan Department of Treasury; Brenda Gartland, an auditor with the Department of Treasury out of Escanaba; and Brian Camiller, a CPA representing the accounting firm of Plante Moran were at the meeting to explain the current finances of the Village.

Cline works with the Community Services division to help cities that are having financial problems. His division was first contacted in 2017 by the Michigan Economic Development Corporation for advice about the Rising Tide program being incorporated into village finances.

Gartland related that the audit report has not yet been finalized. When completed the document will be on the Department of Treasury Website in about two to three weeks.

Camiller offered most of the explanation of village finances going over the last 10 years. He identified certain cause and effects and made some suggestions for improvements.

One of the biggest causes of financial repercussion was the fact that the sewage receivable fund has been supplemented to a large extent by the general fund, leaving the latter seriously depleted.

The general fund is the primary operating fund of the village. It pays for general management, but when another category needs help financially, money is taken out of the general fund.

“If the general fund does not stabilize or start to collect its receivable from sewer, the general fund cannot support other projects,” Camille stated. “If the village suffered a financial emergency, the general fund may not have enough cash to take care of it.”

Camiller also related that the general fund has been subsidizing the major and local street funds, but once again, if there were a disaster, such as a sinkhole developing on McMillan Avenue, the general fund might not be able to pay for the repair.

“Electric, water and sewer are ‘Enterprise’ or ‘Proprietary’ funds; they’re supposed to be operated like a business and charge users a fee for service,” he said. “That fee is supposed to be sufficient for the fund to stand on its own.

“The 2017 rate increase for water and sewer was necessary. You can expect more rate increases for all three enterprise funds (water, sewer and electric).” Camiller explained. “Sewer also needs to collect its nonresident receivables, or else the necessary rate increases to the Village customers will be even greater.”

He ended up the meeting by talking about village employees. “The average compensation for full-time employees has been under $40,000 per year. The financial difficulties the village has experienced are not tied to personnel wages.”

Although the village is required by law to make annual pension contributions, promised healthcare benefits are not, but those costs are expected to rise as well due to people living longer.

“You’ve been given a lot of information to digest,” concluded Cline. “What I fully expect to happen in a very short period of time is that you and your managers are going to get together and begin to break all this apart, and start prioritizing and figure out what you’re going to do next.

“One of the other major things that we have to push is training not only for your employees, but also for you, the council, as well. It also applies to your board commissions, planning, zoning board of appeals. Nobody comes in knowing how to do all of this.”

“For the first time in almost a year and a half, we have gotten some information about what’s been going on in the village as far as our finances,” stated Erik Buckler, an audience member. “A group of citizens has been regularly going to the meetings for approximately a year and a half to two years, and all this time we’ve gotten almost nothing from the village management…The devil is in the details of how these monies are being shifted across the accounts.”

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