County board considers MERS payment timing

CORUNNA — A motion to comply with a formal request by the State 911 Committee that Shiawassee County return a $458,913 overpayment made by Central Dispatch has moved forward to tonight’s county commission meeting for a possible final vote.

County commissioners unanimously advanced the proposal during Wednesday’s Committee of the Whole meeting. However, they did not reach an official agreement on the timing of the repayment, a subject commissioners discussed during a committee meeting Monday.

The state wants the money returned by Sept. 2, and some commissioners said Monday they favored paying at the end of the year. On Wednesday, some commissioners seemed to lean toward paying sooner than later.

“We know it’s owed, and we have budgeted for it,” Chairman Jeremy Root, R-District 4, said. “We have the money, we might as well just pay it.”

Commissioner Marlene Webster, R-District 1, asked if an attorney had been consulted about the legal consequences if the county doesn’t pay by Sept. 2. The answer was no.

On Monday, Vice Chairman Brandon Marks, R-District 4, had questioned the need for the funds to be returned right away when the county is facing mounting financial obligations. He noted that Central Dispatch is fiscally healthy, with a big fund balance and a new 911 building with new equipment in Corunna.

Commissioner Cindy Garber, R-District 6, said Monday some responsibility for the overpayment rested with the 911 board. Marks denied reported allegations that the county had stolen the money from Central Dispatch.

On Wednesday, 911 board chairman Guy Hubbard attended the Committee of the Whole meeting in order to, as he put it, defend himself.

He said he thought the whole issue had been dealt with and was over. He said it was the state, not the 911 board, that had formally requested return of the repayment. He said the 911 board never saw financial records and so couldn’t have known about the overpayments.

Hubbard said he believes some commissioners Monday were accusing him personally of claiming the county had stolen money from the 911 board.

“I never said the county was stealing 911 funds,” Hubbard said. “I have said there was no malicious intent. It was a simple clerical mistake. I don’t care if you take 10 years to pay it back — that’s not up to the 911 board, that’s up to the state.”

He called for better relations between the 911 board and the county commission.

“We need to put down our swords and work together,” Hubbard said.

Garber, the county commission representative on the 911 board, said later in the meeting: “My experience working with you on the 911 board has been very adversarial.” She said the 911 board seemed to be “pitted against” the county.

On Wednesday, commissioners also discussed lowering the surcharge that finances Central Dispatch. Marks, who had initiated the discussion on Monday, said he has since learned of upcoming 911 financial obligations, including for replacing police radios countywide. He said he needs more information before further pursuing lowering the surcharge, which is currently set at the highest allowable rate.

Last month, an audit examining payments by Central Dispatch to the Municipal Employees Retirement System (MERS) showed that Central Dispatch overpaid by $458,913.

The audit revealed that a number of Sheriff’s Office employees were incorrectly grouped with 911 employees as a MERS division. As a result, Central Dispatch was overcharged during the years 2014, 2015 and 2016. The improper practice dates back about 20 years, commissioners have said.

Central Dispatch making MERS payments for non-911 employees was problematic because 911 is a separate financial entity from the county. Funding for the county’s 911 system, generated by a $2.65 per month surcharge on cell and home phones, is strictly dedicated to 911 operations.

In February 2017, the amount of Central Dispatch’s MERS contributions increased threefold by the county’s former finance director because it appeared 911 was paying less than its share, county officials have said.

The spike in MERS payments raised a red flag for some 911 board members. Since the problem came to light, Central Dispatch has stopped being overcharged and the county has been making MERS payments from the general fund for the incorrectly grouped non-911 employees.

Central Dispatch, which receives about $1.9 million per year in surcharges, had been paying $91,000 per month into the MERS fund: $8,000 for current employees and $83,000 toward unfunded retirement liability obligations.

The county as a whole pays about $125,000 per month to the MERS fund for current employees, and $175,000 per month for its unfunded retirement liability obligations. The Sheriff’s Office currently pays roughly half of the total amount.

MERS oversees the county’s defined benefit pension plan. Municipalities or companies with such plans are required to fund the plans against the amount of benefits expected to be paid out to retirees. Unfunded liabilities are amounts a municipality deferred paying previously to fund pension plan benefits.

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