State of Michigan requests MERS payment

CORUNNA — The state of Michigan has requested that Shiawassee County return a $458,913 overpayment made by the county Central Dispatch by September or the matter will be turned over to the state attorney general.

But at least one county commissioner is asking, what’s the hurry?

“We have a request to pay it back in full a month after (we found out we owed it),” commission Vice Chairman Brandon Marks said. “Was it implied that we won’t pay it back? They’re going to get their money, but why not wait until the end of the year?”

The county Finance and Administration Committee Monday approved advancing consideration of the state 911 Committee’s written request to Wednesday’s Committee of the Whole meeting. However, the word “immediate” to describe the return of the money was stricken from the motion.

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.

After last month’s meeting, commission Chairman Jeremy Root said he hoped the county would be able to reimburse Central Dispatch by the end of the year.

Demanding that the money be returned right away is unreasonable, Marks said. He said the county faces the challenge of meeting its increasing MERS funding obligations next year. At the same time, he noted, the new 911 building in Corunna and new equipment cost about $3 million, going over budget. Central Dispatch has more than $2 million in savings, he added.

Marks said the 911 surcharge paid by county tax payers is set at the highest allowable rate. He asked that a motion to discuss possibly lowering the surcharge be added to Wednesday’s Committee of the Whole agenda.

“This is an unacceptable situation we find ourselves in,” Marks said. “We’re going to pay back that money, but I don’t see why it’s sensible to pay it back right now. It’s time to manage our money wisely.”

Commissioner Cindy Garber said she believes some of the responsibility for the MERS mistake rests with the 911 board, some of whose members have been serving for many years.

“This happened on their watch,” she said.

Root stressed that the mistaken MERS allocation was a “clerical error” and that, contrary to what some people have stated, “No one stole from 911.”

Commissioner Gary Holzhausen said in his view the money should be returned to 911 “shortly.”

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.

(1) comment

Mother Hen

It appears that Commissioner Gary Holzhausen has a conscience, and a voice to be listened to. He is doing what is right by stating that the funds need to be paid back immediately. [thumbup]

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