Here you can learn about our latest projects and what's new at our's and other organizations.
Dear Clients & Friends:
We recently received letters addressed to several of our clients from City of Detroit Inspector General James Heath. The letter states that various entities may be required to register as a lobbyist with the City of Detroit.
We recently spoke with Inspector General Heath who told us that lobbyist registration is a relatively new city charter requirement (2012) and that he recently became aware that there is very little public knowledge or compliance with these requirements. As a result, he obtained a list of registered “lobbyists” from the Michigan Secretary of State’s Bureau of Elections and sent out thousands of these letters as part of public awareness campaign to promote greater compliance.
If you received one of these letters, please know that you are not being singled out. However, you may have register as a lobbyist with the Detroit City Clerk’s office, pay applicable fees and file quarterly reports.
We are in the process of registering several clients for whom we do City of Detroit work. However, we realize that many of you may do lobbying work in the City of Detroit via in-house employees or other contractors.
We wanted to make you aware of the background for these compliance letters and offer our assistance in compliance.
Below please find a brief summary of the City of Detroit requirements:
Natasha Oxender Kimmerly
208 North Capitol Avenue | 3rd Floor | Lansing, Michigan 48933-1356
517-371-1400 TEL | 517-371-3207 FAX | kelley-cawthorne.com
There needs to be more monitoring and greater transparency, along with a new state oversight board, to ensure local government finances are stable, said a report issued Tuesday by the Responsible Retirement Reform for Local Government Task Force.
The group did not make any recommendations on changes to employee retirement plans, such as switching workers from defined benefit pension plans to defined contribution plans like a 401(k).
Nor did the task force call for more state funding to local governments, though a number of members of the task force called for that as a position. The task force decided that was "beyond the scope of the task force's work."
Governor Rick Snyder, who announced the task force in his January State of the State address (and who, several administration officials have said, views stabilizing local government finances as one of his major goals in the remaining 18 months of his administration) said he would review the recommendations in the report and work with the Legislature on enacting reforms.
The report said the state's more than 2,800 various governments - school districts, intermediate school districts, cities, townships and counties - had pension and other post-employment benefit obligations that were underfunded by an estimated total of $17.4 billion. Of that, $10 billion is in OPEB obligations, and most of that is in retiree health care.
In terms of pensions, which are underfunded by some $7.4 billion, local governments have an estimated $28 billion in pension funds against $35.4 billion in liabilities.
Detroit has the largest total liabilities of all local governments at $2.9 billion.
The report said that on average most local governments are funding their pension plans at 78 percent of liabilities, a percentage most experts view as adequately funded. There are disputes in the financial industry on that, the report said, with the American Academy of Actuaries argued for 80 percent funding with a goal of 100 percent funding. But some members of the task force argued most communities are adequately funding their plans and that some solutions that critics of the pension funding have suggested could create more problems for local governments.
However, while the average funding level is 78 percent, the report said there are 180 governments that have funding levels of less than 60 percent. The worst funded system in Michigan is the Lincoln Park Police and Fire pension system which is funded at just 22 percent. The Lincoln Park general employee system is the second worst funded at 31.9 percent.
In terms of OPEB, the report said local governments have a total of $8.3 billion in liabilities with just $1.3 billion in assets. The average funding level is 19.3 percent.
Lansing has the worst overall underfunded OPEB situation with $431.8 million in accrued liability.
The report said there are several factors that have led to the problems local governments have with their pension and OPEB benefits including a lack of prefunding those benefits, using assumptions which proved wrong over time, and significant issues regarding raising revenue. Those revenue challenges include limits on property taxes established by the Headlee Amendment in 1978 and the Proposal A school reform proposal in 1994.
While property tax revenues across the state grew significantly during the real estate boom in the first decade of the 21st century, they fell during the Great Recession. While overall local governments have seen revenue growth, some 248 local governments have tax bases which are lower than they were in 2000.
The report also said Michigan is not unique in the local government funding problems it has. Every state faces the same problems, to a different degree. Nationally pension plans were funded at an average of 103 percent in 2000, but that has fallen to 72 percent in 2014.
In terms of fixing the situation in Michigan the report said steps have to be taken immediately, especially in those local governments with serious problems. But the report also said that "the problem was created over many decades and will take many more to correct."
There is no single solution for each community, the report said, "we must be flexible in our approach," but solutions must ensure the problems do not continue to grow and also recognize some communities can neither raise taxes nor cut spending enough to attack their unfunded liabilities.
While the 23 members of the task force dissented on some proposals, the task force did reach concurrence on a number of basic concepts, which include:
· Establishing greater reporting and transparency by all governments, using uniform assumptions to give a full picture of what local funding is for pensions and OPEB costs and where problems might lie;
· Creating a "stress test" on pension and OPEB funding that could help local governments develop solutions that will both serve the public and protect worker benefits;
· Requiring all local governments to prefund a new employee's OPEB costs; and
· Creating a new "Municipal Stability Board" that would help review local finances and "corrective action plans" for local governments. This board, the task force said, should also help local governments in providing research
The task force agreed the board would be made up local and state officials along with employee representatives. Those appointees "must" have "strong technical knowledge" of retirement systems, practices, policies and law, the report said.
Reaction to the report from local government and local worker groups varied. No one who issued a reaction wholeheartedly endorsed the proposals, but most praised the report for beginning the discussion on how to deal with local government finances.
Charlie DeRose with the Municipal Employees Retirement System said the group hoped the Legislature would consider its findings. The report "rightly recognizes" many communities are already taking steps to meet their funding requirements, he said, but also calls for "us to roll up our sleeves" to create practical solutions.
A number of the responses focused on the need to recognize it will take time to resolve some of the issues - possibly a call to legislators, who have talked about requiring at least new local workers to go into 401(k) plans instead of pensions - and to recognize each government needs flexibility to craft plans.
Stephan Currie of the Michigan Association of Counties said it was critical that both lawmakers and citizens recognize there is "no overnight fix to this issue."
Judy Allen with the Michigan Townships Associations called the report a "crucial first step in addressing the long-term, complex problem of local government fiscal stability."
But Anthony Minghine of the Michigan Municipal League was more critical, saying the report failed to meet goals the association had to reach "a real solution that would address what we believe to be one of the biggest threats we are facing at the local level. We strived to form a plan that balanced a desire to reduce costs while maintaining a quality work force. Regrettably, this report falls short of these goals."
The league wanted the report to endorse greater authority to address employee retirement issues, he said, but he also said the group would try to build on the discussions in the task force and move changes forward.
Michigan Fire Service Coalition Members
The MAFC has advised Melissa that we will no longer be utilizing the services of Kelly Cawthorne. I realize that our coalition it has morphed beyond its original days of a coalition before a lobbyist and this creates some difficult decisions for you all to make.
The MAFC is willing to continue to work with our like minded associations, although it is unclear as to what our role with in the coalition would be based on previous actions by the coalition.
Please see the attached memo for further discussion.
Michael O'Brian, President
Michigan Assocation of Fire Chiefs
Your calls and emails made a difference. The House and Senate just passed the 2016/2017 Budget which includes 3 million dollars for our Cancer Presumption Fund!!! One last step...the Governor's signature. We are so close to finally taking care of our members that are developing cancer from work place exposures.
County Training Committee Chairpersons,
Please forward to the fire departments in your county the attached policy detailing the MFFTC Instructor II position. The “Instructor II Policy and Procedures” is taken from the rules as submitted by Council.
Also attached you will find the Instructor II Application which must be filled out in its entirety and submitted to the respective region supervisor for review. Although the policy asks that the application be made through the Information Management System (IMS), we ask that you submit your application in writing until IMS is brought up to speed.
Thank you for your assistance in this matter.
Joseph A. Grutza