Tuscola County Board: ‘Buck stops here’ with road commission’s financial woes

Tuscola County Board of Commissioners aren’t about to drop concerns over the Tuscola County Road Commission’s projected multi-million dollar shortfall in promised benefits.

The reason?

They said they feel it could eventually become a county-wide problem.

Commissioners discussed the matter at length during its regular board meeting Thursday in Caro, while just a few short miles away in Indianfields Township, the Tuscola County Road Commission held its regular meeting and didn’t address the subject.

As reported, years of increasing pension and health care liabilities on the part of the Tuscola County Road Commission have the organization facing a shortfall of millions in promised benefits.

According to its 2015 financial audit, the road commission has about $2.7 million in underfunded pension liabilities between two pension plans. Projected shortfalls in promised health insurance coverage are about $9 million.

County Controller Mike Hoagland sent an email to the road commission on Nov. 10 expressing specific concerns of the shortfall, offering possible ways to address it, but road commission members stated publicly they were confused over the concern.

“This whole thing of ‘Oh, I don’t see what the county has a problem with’…well, you know what the county has a problem with? The buck stops here,” said Tuscola County Board of Commissioner Craig Kirkpatrick, as he pounded a fist on the desk.

Kirkpatrick added that while the road commission is a separate entity, significant financial problems could potentially end up costing the county and taxpayers.

“We don’t want their troubles,” he said. “We want them to fix their troubles, even if they have to get more aggressive about it.”

The Tuscola County Road Commission is responsible for 156 miles of state roads (through contract), 360 miles of primary roads, and another 1,256 of local roads.

County road commissions are not part of general county government, except in Wayne County, which has a public works department instead of a road commission. They are legally separate entities, receiving nearly all of their operating funds directly from the state.

County road commissions either have a three-or five- member board that is either appointed by the county board of commissioners or elected by the voters. In Tuscola County, the board is Chairman Jack Laurie, Parsell and members Mike Zwerk, Julie Matuszak, and Pat Sheridan.

Mike Tuckey is the business manager.

On Dec. 1, during a road commission board meeting, Tuckey addressed the projected shortfall.

He walked through a series of changes that the board has made as far back as 2003, when the board decided to stop paying lifetime health care benefits for employees post-retirement and changed it to three years post-retirement. Other changes have included swapping health benefits for less costly options

On Thursday, county Commissioner Tom Young – who serves as liaison to the road commission – updated the rest of the board members on the Dec. 1 road commission meeting.

He said he urged them to pass the meeting minutes along to the other members of the county board.

“So when you get that in your packet, in January, you will able to read what the road commission has been doing as far as they consider, addressing the issue of their legacy costs,” Young said. “So stand-by for the minutes of the Dec. 1 meeting.”

But Tuscola County Commissioners Thom Bardwell, Craig Kirkpatrick and Matthew Bierlein wanted more.

“Do you get a sense whether they’re gaining ground, losing ground, or neutral in the things that they’re doing?” Bardwell asked.

Young indicated he thought the road commission is “satisfied” with what they’re doing, including making “extra” payments when possible to address the projected shortfall (though road commission members said Dec. 1 that increased health care costs have lessened the amount of the extra payments).

“But the dollars that they’re committing – are they still losing based on the gains of these costs?” Bardwell asked. “Are they neutralizing, break-even? I guess that’s the question the board would really want to know.”

Bierlein referred to the road commission’s audit report.

“I think the audit report answers that question,” he said. “Whether they feel like they’re making the right steps or not, from the 2014 to 2015 audit I don’t think there was any change in their unfunded liability.”

“So if the past dictates the future…nothing’s changed,” Bardwell said.

Kirkpatrick said he appreciated Young attending the road commission meetings, and wanted to give him “the biggest break” as the newest commissioner (Young was appointed to fill a vacancy in February and re-elected in November).

However, Kirkpatrick said the time has come to essentially hold road commission officials’ feet to the fire.

“There’s history here,” he said. “Two years ago, we evaluated this same topic…and there were things that were brought up that has taken us this amount of time to drag out of them.

“There’s just always a delay,” he said.

Kirkpatrick urged Young to look at previous audit reports of the road commission.

“Year after year after year…these are the professional accounting people telling them ‘You are dramatically underfunded,’” Kirkpatrick said.

“I’ve been out there…those guys are good about patting you on the back and telling you how good you are…but the fact of the matter is, their auditors have identified a serious problem that we have not seen much of a reaction to.”

Young again pointed to the Dec. 1 road commission meeting, pointing out how the road commission was confused over the concern since they had met previously with board members to address the problems and potential solutions.

“Well that would be their spin because I can guarantee you we totally understand where things are and you kind of need to get some traction as to where things are,” Kirkpatrick said to Young.

Young stressed that the road commission seems “happy” and on top of the problem, and that they wonder why the board of commissioners is getting involved.

“If the group is as happy as they seem to be with the level of underfunding that they have that’s been identified by their auditing team year after year after year…boy, if I was one of their potential retirees I wouldn’t be happy with that,” Kirkpatrick said.

Hoagland suggested Young sit down with the auditors of the road commission.

“When their own auditors continue to write those kind of statements (about the underfunded liabilities), then there’s a problem,” he said. “Until that comment is changed, I would think there would be some concern.”

Bardwell raised the question of whether or not the county would actually be liable for the road commission should it come down to it.

“No were not,” Hoagland said. “But if they got in that dire of straits, regardless of the law, there would be pressure on this board from the public to fix it.

“So regardless of the legality, you could be up against it from the other side,” he said.

Young would go on to ask the rest of the board how they wanted him to proceed.

“Are you sending me there to argue with them, or just cut to the facts and talk about it as a committee here, or…?” he asked.

Bierlein said “if we want to see change there, we will probably have to revisit the audits, maybe make a timeline of the three years we’ve been working with them and say ‘OK, nothing has changed…’

“I don’t think we should drop it as a board,” he added.

Kirkpatrick said Young needs to decide if he wants to be a “monitor” of the situation or something else (once he learns more about the situation).

“You’re ethical, you ran for the office, if you want to be at a friendly meeting, then you can take the position of monitor and hope for the best,” Kirkpatrick said. “If you want to see those employees have some certainty in a retirement, and address their past behavior, this is why you were elected.”

Andrew Dietderich is editor of The Advertiser and can be reached at andrew@tcadvertiser.com

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