Oxford Village’s finances are in good shape.
That was the overall message to council last week as officials were presented with the audit report for the 2014-15 fiscal year, which ended June 30.
The village received an ‘unmodified opinion? from the firm of Abraham & Gaffney, P.C.
‘It’s the highest opinion a municipality can receive (in an audit report),? explained Auditor Kimberly Keefe.
The village ended the fiscal year with a total unrestricted fund balance of $483,675. This money can be spent or saved at the municipality’s discretion.
‘You actually added ($97,765) to the fund balance, which is pretty good,? Keefe told council.
To give council ‘a little perspective,? she noted the village added only $44,274 to its fund balance in 2013-14.
‘Since 2013, your revenues have exceeded expenditures and your fund balance has been slowly increasing,? Keefe said.
The current fund balance represents 13.8 percent of the village’s total general fund expenditures.
Keefe noted that percentage should be a little higher.
‘We typically recommend 15 to 20 percent, which, in other words, would be around two months worth of expenditures,? she said.
The village’s fund balance was at 18 percent last year.
Councilwoman Rose Bejma inquired about the funding level of the village’s pension obligations through the Municipal Employees Retirement System (MERS). As of June 30, 2015, it was 66 percent funded.
‘Should we be concerned about that?? Bejma asked.
‘Ideally, it would be great to have it 100 percent funded,? Keefe said. ‘I would work towards that.?
Bejma asked if the village should be striving to increase its contribution to MERS.
‘It wouldn’t hurt,? Keefe replied.
This funding gap boils down to two things.
One, investments helping to fund the pension system are not receiving the rate of return that had been originally projected by the actuaries.
Two, there are more people receiving benefits from MERS.
‘People are living longer, so they’re paying out more pensions,? said village Manager Joe Young.
Young explained it would only be necessary to have the village’s pension obligations 100 percent funded if everyone were to retire on the same day and begin collecting their benefits.
‘You could cease being a government and everybody would be paid off,? he said.
But ‘that isn’t how it works,? he continued.
Young likened MERS to Social Security in that it’s an on-going program that relies on governments and active employees to continually pay in, while retirees draw pensions.
Village attorney Bob Davis asked the auditor, ‘You’re not doing a lot of audits where that number’s 100 percent, are you??
‘No,? Keefe replied.
Bottom-line, Councilman Cloutier said the village’s 66 percent funding level is ‘far from (a) red flag.?
‘That’s what I wanted to hear,? Bejma said.
It was noted that Oxford Township’s pension funding level was at 64 percent as of Dec. 31, 2014. That’s down from 67 percent in the township’s audit report for 2013.
Township Supervisor Bill Dunn, who attended the village meeting, invited officials to participate in a 7 p.m. Monday, Dec. 7 special joint meeting between the township board and village council.
The main purpose of the meeting is to discuss MERS funding issues. Attorneys representing both municipalities will be there as well as a representative from MERS.
‘I’m hoping there’s nothing to be alarmed about, but I would like to take a close look at it to make sure that we’re doing things the right way,? Dunn told council.
The township’s pension funding level has been pretty much declining since 2005 when it was at 77 percent.
‘Talking to these people (from MERS), my head spins,? Dunn said. ‘It is very convoluted.?