CITY OF HUNTINGTON WOODS Discuss Fire and Police Pension Millage - - PowerPoint PPT Presentation

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CITY OF HUNTINGTON WOODS Discuss Fire and Police Pension Millage - - PowerPoint PPT Presentation

Jan 07, 2024 115 likes •296 views

1 CITY OF HUNTINGTON WOODS Discuss Fire and Police Pension Millage and Road Improvement Plan February 2020 V ettraino C onsulting , LLC 2 Consultants Jaymes Vettraino Founded Vettraino Consulting, focused on a wide range of municipal

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CITY OF HUNTINGTON WOODS

Discuss Fire and Police Pension Millage and Road Improvement Plan February 2020

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Vettraino Consulting, LLC

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Consultants

  • Jaymes Vettraino
  • Founded Vettraino Consulting, focused on a wide range of municipal

consulting in Michigan

  • Specializing in facilitation, financial planning, organizational

management and human resources

  • 17 years as a City Manager in Michigan and Pennsylvania
  • Faculty member, School of Business, Rochester University
  • Cheryl Gregory, P.E.
  • Senior Project Manager, Rowe Professional Services Company
  • Over 32 years’ experience in civil engineering, specializing in

transportation infrastructure

  • Management positions with MDOT, Spalding DeDecker Associates

and Rowe Professional Services

  • Lawrence Tech University Civil Engineering Advisory Board - Chair

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Goals of the project:

(1) Develop a comprehensive road improvement strategy (2) Review the potential of redirecting public safety pension funding to a new road strategy

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(1) Develop a comprehensive road improvement strategy

  • Working with the engineering firm Spalding DeDecker,

the City’s roads were rated using the State standard PASER system

  • An important concept in the report is the overall

condition of the pavement network represented by an “Overall Condition Index” (OCI) rating

  • As of November 2018, the City’s OCI rating was a

5.093

  • Asphalt Roads: 4.721
  • Concrete Roads: 6.760

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The engineer expressed an opinion that an average OCI score higher than 5.70 produces a pavement network that has satisfactory driving conditions and allows for efficient use of resources to maintain the pavement.

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(1) Develop a comprehensive road improvement strategy

  • Target: achieve an OCI rating above the “critical condition

point” and to have more sustainable “good” & “fair” roads

  • Models were created to evaluate OCI rating of 5.70 as quickly as

possible and to maintain the rating at year 20

  • Multiple street infrastructure funding scenarios were

tested to optimize the balance between investment, timing and sustained OCI improvement.

  • Models were reviewed to evaluate the current streets maintenance

spending, additional capital spending and additional maintenance spending

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(1) Develop a comprehensive road improvement strategy

  • More than nine scenarios were reviewed by the
  • Committee. Below are the five streets infrastructure

funding scenarios reviewed in detail by the Committee:

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Subcommittee Recommends A-9

  • A-9 positions the City well at the end of the 20 years
  • Above the 5.70 target
  • Slope of the graph shows that continuing to spend at a consistent and

manageable rate would maintain more roads in good condition.

  • The strategy invests an additional $1.734 million in each of the

first 3 years

  • This will significantly improve the OCI of the City road network
  • immediately. These results will be viewed favorably by the residents.
  • Capital investment of $4,500,000 over the first three years is a

feasible investment

  • 20-year capital improvement bonds
  • Annual debt cost of $331,000
  • Maintenance investment of $400,000 for road maintenance in

years 1 – 20

  • An increase of $234,000 per year from the City’s current road
  • spending. The Subcommittee thought it might be practical to identify

this level of increase in spending.

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Subcommittee Recommends A-9

  • The Subcommittee reviewed a theoretical scenario of how

many roads would be impacted by construction in these first three years and opined that the amount of construction would not overly burden the community nor jeopardize access for emergency vehicles.

  • The Subcommittee recommends an educational campaign be

developed to inform residents of the need for a different strategy for sustainable street infrastructure.

  • The information should focus on the current condition of the

pavement network and the goal of improving the average condition of the entire network, focusing both on the ride quality

  • f the streets and the future financial savings by investing in

the network before the average condition deteriorates further.

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(2) PA 345 pension for public safety

  • Public Act 345
  • “Fire Fighters and Police Offices Retirement Act”
  • The act establishes specific legislative authority to create a

pension system for public safety officers and authorizes a funding source

  • The act requires two actions:
  • A referendum vote adopting an Act 345 pension system
  • A referendum vote establishing a maximum levy
  • Huntington Woods is currently at its maximum General Fund

Millage, and it is subject to Headlee.

  • PA 345 has no ceiling and is not restricted by the Headlee

Amendment

  • This act is intended to actually fund the City’s public safety pension
  • It is one of the only ways a municipality can establish a new revenue

stream that matches its obligations

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http://www.legislature.mi.gov/(S(4gabekio1jf3ymwdzawzglqg))/mileg.aspx?page=GetObject&objectname=mcl-Act-345-of-1937 https://www.canr.msu.edu/news/act_345_a_viable_tool_for_your_community https://www.canr.msu.edu/news/fire_fighters_police_officer_retirement_act_345

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(2) PA 345 pension for public safety

  • The City currently has a public safety pension plan. The

plan is funded by the General Fund and administered by MERS

  • The City also has non-public safety pension liabilities, these can

not be paid for with PA 345 funds

  • The cost to the General Fund of the public safety pension

plan annual contribution is approximately $800,000

  • This cost will continue to grow in the future years
  • The General Fund savings is “locked” at $800,000 (available for

funding other items)

  • The PA 345 millage can be adjusted to meet the annual public

safety pension plan contribution

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(2) PA 345 pension for public safety

  • Actions needed – voter approved:
  • Establish an Act 345 compliant pension board
  • Set a maximum levy for funding public pensions
  • Action needed – non-voter approved:
  • Set the actual levy for funding public safety pension annually during

budget adoption

  • Selection of an investment administrator (recommended to be

MERS, the same plan administrator)

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(2) Plan to implement the road improvement strategy

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(2) Plan to implement the road improvement strategy

  • It is recommended the City consider allocating funds

available ($800,000) from the PA 345 proposal for two specific priorities: road improvements and long-term liability (pension and OPEB) reduction.

  • The Subcommittee recommends $565,000 of the

$800,000 available General Fund money be allocated for road improvements, as outlined in Scenario A-9

  • The remaining $235,000 is recommended to be allocated

to fund long-term liabilities (non-public safety pensions and OPEB obligations) or other infrastructure priorities

16 800,000