ADOPTED - MARCH 28, 2006

Agenda Item No. 9

Introduced by the County Services and Finance Committees of the:

INGHAM COUNTY BOARD OF COMMISSIONERS

RESOLUTION TO APPROVE DEFICIT ELIMINATION PLANS FOR THE DRAIN GIS STUDY FUND AND THE INSURANCE INTERNAL SERVICE FUND

RESOLUTION #06-071

WHEREAS, accounting deficits exist in two County funds at the end of 2005; and

WHEREAS, deficit elimination plans must be approved by the Board of Commissioners and filed with the State of Michigan; and

WHEREAS, the Controller is recommending the attached Deficit Elimination Plans for the Drain GIS Study Fund and the Insurance Internal Service Fund.

THEREFORE BE IT RESOLVED, that the Ingham County Board of Commissioners approves the attached Deficit Elimination Plans.

COUNTY SERVICES:  Yeas:  De Leon, Holman, Copedge, Severino, Vickers

Nays:   None         Absent:  Schor    Approved 3/21/06 

FINANCE:  Yeas:  Thomas, Hertel, Grebner, Dedden, Weatherwax-Grant, Dougan

Nays:  None         Absent:  None    Approved 3/22/06

2005 DEFICIT ELIMINATION PLAN FOR THE DRAIN GIS STUDY FUND

Resolution #05-227, adopted on August 23, 2005 approved a deficit elimination plan that would cure the deficit in the Drain GIS Study fund by the end of 2006.  The deficit at the end of 2005 was about $338,000.  Per discussion with the Drain Office, the Controller has been assured that the plan is viable and the deficit will be resolved by the end of the 2006 calendar year. 

2005 DEFICIT ELIMINATION PLAN FOR THE INSURANCE INTERNAL SERVICE FUND

The Insurance Internal Service Fund has a deficit of $530,000.  At the end of 2003, this fund had a $1.4 million surplus.  Charges to departments were suspended to help eliminate the surplus.  Meanwhile, the estimate of liabilities incurred but not reported (IBNR) increased significantly.  The reinstatement of charges to departments starting in June 2005 was insufficient to offset the additional costs and estimated liabilities incurred in 2005.  This deficit should be eliminated by the end of 2006 as the fund experiences a full year of revenue.  In addition, we will re-evaluate the method of calculating our IBNR.  Historical claims loss data is now available from the Michigan Municipal Risk Management Authority that will provide a more accurate, and possibly a lower IBNR.