GVMC feels state pinch

January 14, 2011
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The Grand Valley Metro Council may be the first local public body to have felt the effect of the state government’s most recent early-retirement program, which was put in place to cut employee costs and lower Lansing’s budget deficit. And it turned out to be a fairly successful program as it persuaded roughly 5,000 state workers to leave their jobs at the end of last year.

But, so far, that success hasn’t transferred to the Metro Council, and other local agencies and units of government may face similar dilemmas from the downsizing effort if they need to resolve a serious matter with the state later this year.

The council has been trying to settle a financial dispute with the Office of Transportation Commission Audit at the Michigan Department of Transportation. OTCA audited the Metro Council’s budgets from 1996 to 2004 and said it found some reporting discrepancies. The agency then claimed the council owed MDOT and the federal government up to $1 million from alleged overpayments that were made to GVMC over those nine years.

GVMC Executive Director Don Stypula said the council has been trying to resolve the issue for the better part of a year and thought he was going to be able to settle the matter this month after a meeting with OTCA. But the meeting won’t take place because a handful of individuals that serve on OTCA, including the person who schedules the group’s meetings, took the state’s early retirement offer and haven’t been replaced.

“We are unable to reach an agreement after a year. We have been spending an inordinate amount of time trying to figure out which hoop to jump through,” said Stypula, who hoped to settle the matter this month for $320,000. The settlement would be paid over a number of years.

Stypula added that he wasn’t exactly sure who to contact now with OTCA pretty much in limbo or when an agreement could be reached. Some MDOT managers were to have presented the council’s case to OTCA. “It’s not a dead issue,” said Stypula.

Nearly 300 of those 5,000 former employees worked for MDOT, with which the council works closely in setting the region’s transportation and transit goals and getting road and other related projects financed and done. Many of those retired employees were also the agency’s most experienced workers.

OTCA based its claim on a review of accounting procedures on such things as how the Metro Council staff’s vacation hours and sick leaves were posted. The state agency said the postings weren’t in line with Circular No. 887, which is a reporting regulation for grants. Federal and state transportation grants are passed through the council.

Stypula said the council keeps meticulous accounting records and added there was absolutely no attempt by GVMC to defraud the government. He also said that other planning agencies have fought OCTA over similar rulings but have lost, and he felt going to court over the matter could be more costly than resolving it.

Vredeveld & Heafner, the council’s auditing firm, has advised GVMC not to release the audited version of its 2010 annual budget until the matter with OCTA is settled.

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