Township's financial position debated again

By Dana Casadei

Discussions around Bloomfield Township’s financial position began to get heated before the board even presented anything, with residents expressing their thoughts during the public comment section of the board of trustees’ meeting on Monday, July 27. 

Multiple residents spoke about how they felt the township wasn’t being transparent, and hadn’t been since 2016, about the township’s water and sewer rates, operating costs, and how many people it costs to run the department of water and sewer. 

“Residents are paying attention, we deserve answers,” one woman said. “Explain the numbers.”

“Mark [Antakli] is the only trustee asking questions… the Bloomfield Township board has some explaining to do,” another commented.

Antakli has been asking questions about water and sewer rates both during his time as a trustee and before that, speaking as a resident during the trustee meetings. In June, he went a step further and submitted a 28-page memo to the Michigan Department of Treasury that asked the state to conduct an independent review of certain areas of the township’s financial management, reporting and internal control practices.

Within the memo Antakli asked the state to verify that Bloomfield Township’s actions and policies are consistent with Michigan law, accepted municipal finance standards, and fiduciary responsibilities.

In total, the memo consists of 40 different concerns that Antakli has about the township’s finances.

“Frankly, the entire memo is flawed,” said treasurer Michael Schostak. “Basically, this is a policy disagreement masquerading as evidence of wrongdoing.”

Schostak called the memo internally contradictory, claiming Bloomfield is both in financial distress and hoarding a financial reserve, and engaging in concealment, which they can’t be doing because the memo also quotes from Bloomfield Township’s audit report and general policies. 

Getting into the memo’s contents, Schostak went point by point why certain allegations were indeed false, such as the allegation that the township diverts approximately $1.2 million in annual interest from the water and sewer fund to the general fund, in violation of the “interest follows principal” in Section 4 of the Uniform Chart of Accounts (UCOA) fundamental accounting principles and GASB 34. 

This simply isn’t true, according to Schostak. Crediting interest on township deposits into the general fund is not a diversion or loophole, it’s simply the statutory rule for township funds. UCOA states that “the cash and investments of the water and sewer fund are subject to the requirements of 1942 PA 20, MCL 129.91, and may be included in a pooled cash and investment account unless restricted by the bond ordinance or authorizing resolution.”

“The fact is we are doing exactly what state law requires us to do. We are following that statue,” Schostak said.

Since the water and sewer utility is owned by the township, all of its funds are township funds., he said. Because of this, the township keeps all of the interest earned on cash deposits, and according to MCL 41.77(2), all deposits are paid to the treasurer, in this case Schostak, and the interest earned is paid into the general fund. 

“Anything that comes into the hands of the treasurer, the interest is to be paid into the general fund, which Mark said is in a structural deficit, which the township is not,” Schostak said.

According to Michigan law and treasury guidance a “deficit” is defined as a negative fund balance at fiscal year end. The township’s general fund closed FY2025 with a fund balance of approximately $16.8 million, well above the township’s adopted fund balance policy floor and not a deficit under Michigan law. 

In fact, the township is in an extremely strong financial position, one of the strongest it's been in years, he said.

Bloomfield Township is one of only a handful of local governments with a AAA credit rating, the pension and OPEB liabilities are funded more than ever, and they receive a clean audit report every year, the treasurer said.

“I’m not going to argue with people who are experts and outside my purview. I think it would be foolish… and I don’t know why we keep arguing with experts,” trustee Chris Kolinski said.

Going into more detail about the township’s financial position, Schostak discussed how Bloomfield Township has received the highest rating they could from UHY, an international accounting firm that has audited the township’s financial statement for 10 years. UHY has given them an “unmodified” audit each year which demonstrates that their financial statements fairly and accurately represent the township’s financial position. 

UHY’s team includes a certified fraud examiner, who year after year has found no evidence of any fraud or wrongdoing., according to the treasurer. Throughout the 10 years UHY has worked with the township they have changed the partner in charge of the audit and team members multiple times, and have worked with three different quality review partners who are independent of the engagement team and have performed objective reviews of the significant judgments and conclusions reached during the audit. The accounting firm is also subject to periodic peer reviews and internal inspections., Schostak explained.

Another allegation in Antakli’s memo that Schostak debunked is that the township uses restricted utility cash as an unrecorded “backstop” for other funds – including an alleged $16 million public safety payroll gap in late 2025 – without board approval. Antakli’s claim is that by doing this they are in violation of MCL 141.438. 

“The statutory citation is simply wrong,” Schostak said. He went on to show documented cash balances that refuted the claim of an illegal backstop. The schedule was originally presented to the board of trustees at their meeting this past January. 

During his presentation Schostak also addressed the Michigan Community Financial Dashboard, something that came up during public comment as residents noted that according to the dashboard Bloomfield Township ranked near the bottom of Michigan townships in several key measures regarding their financial condition.

“Municipal accounting isn’t exactly cookie cutter… it makes it very difficult to standardize,” he said. 

The Michigan Community Dashboard only looks at cash, not marketable securities, which is where most of the township puts its cash; it also doesn’t look at restricted accounts, or in funds besides general fund. The dashboard is leaving out the bulk of Bloomfield Township’s resources, and it’s not an apples to apples comparison like some may think, he said.. 

After Schostak’s presentation and an additional presentation from UHY, Antakli went on to ask numerous questions; clearly frustrating everyone who tried to answer him. 

“I think your bottom line is that you're always worried about the financials and the cost, as we all are… All of these people are here because they work here and they’re trying to do their very best, but we’ve been here late at night and it’s not solving the problem, you still have questions. Come talk to people in their offices when they have all of their resources in front of them,” trustee Valerie Murray said. 

Multiple people told him that it seemed he was fishing for answers and in some cases asking trick questions to both the board and the auditors from UHY.

After over an hour and a half of discussion, questions and accusations it all finally came to a close with trustee Neal Barnett, who had stayed quiet throughout most of the discussion.

Barnett brought up how this was the second time that Antakli had written a letter to the treasury department and they never responded to his first letter. Barnett and Schostak also confirmed that if the treasury department were to respond to Antakli’s second letter the township would do whatever is necessary. So far though, Barnett said, they have not seen any validity in what Antakli wrote to them and have not written a response.

“You’ve brought this up as long as you’ve been on the board… we’ve had our attorneys respond to you, we’ve had our financial people respond to you, we’ve had our auditors respond to you, all the experts have responded to you. You may not like their responses but they have responded to you, no one is ignoring you,” Barnett said. 

“With that said, I think we should be done with this, table this, see what happens,” he continued. “We have a lot of other things to take care of. Our finances are strong and it’s been very clear that. I think it’s just time to move on.”

Supervisor Mike McCready closed the agenda item after Barnett finished speaking.