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Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: 9/24/2019 Title: Financial Policy Update
Submitted By: Sarah Petersen Department: Treasurer
Brief Summary: To update the Poverty Exemption Income Guidelines used to determine poverty
tax exemptions.
Detailed Summary: In recent years, the State of Michigan has undertaken significant Property
Assessing Reform in an effort to ensure high quality assessments for taxpayers and local units.
One of the many reforms is a mandatory AMAR (Audit of Minimum Assessing Requirements) to be
conducted every five years in each local unit. The local units in the County of Muskegon are
scheduled to receive their AMAR in 2020.
As part of our efforts to ensure we are complying with all State requirements for the AMAR, we
reviewed our Poverty Exemption Policy with our assessor of record, Donna VanderVries, and
determined changes to the policy were necessary. On page 25 of the attached Financial Policies,
in the Poverty Exemption Income Guidelines, the requirements of items 7) and 8) do not comply
with state regulation and must be removed from the policy. Also, for item 2), we cannot require the
taxpayer to provide the property tax credit returns. The State Tax Tribunal has ruled that we
cannot go above what the state statute dictates, and each of these requirements are considered to
be beyond the limits of the statute.
On the advice of Muskegon County Equalization Director Donna VanderVries, we are requesting
that you update item 2) and eliminate items 7) and 8) from the current Poverty Exemption Income
Guidelines in the City’s Financial Policies.
Amount Requested: N/A Amount Budgeted: N/A
Fund(s) or Account(s): N/A Fund(s) or Account(s): N/A
Recommended Motion: To approve the updated Poverty Exemption Income Guidelines in the City
of Muskegon’s Financial Policies as presented in the attached Financial Policies document.
For City Clerk Use Only:
Commission Action:
CITY OF MUSKEGON FINANCIAL POLICIES
INTRODUCTION 2
I. OPERATING BUDGET POLICY 2
II. CAPITAL IMPROVEMENTS POLICY 3
III. REVENUE POLICY 3
IV. FUND BALANCE POLICY INCLUDING GASB STATEMENT 54 POLICIES 3
V. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING POLICY 4
VI. DEBT POLICY 5
VII. FIXED ASSETS CAPITALIZATION AND DEPRECIATION POLICY 6
VIII. LIABILITY INSURANCE CLAIM SETTLEMENTS 6
IX. POLICY FOR ADJUSTING UNCOLLECTIBLE ACCOUNTS 7
X. POLICY FOR ADJUSTING DELINQUENT REAL & PERSONAL PROPERTY TAXES 7
XI. INVESTMENT POLICY 8
XII. PETTY CASH USES AND LIMITS 10
XIII. PROCEEDS FROM SALE OF CITY-OWNED REAL ESTATE 10
XIV. PROCUREMENT CARD PROGRAM POLICY 11
XV. ELECTRONIC PAYMENTS 13
XVI. ACCEPTANCE OF CREDIT CARD PAYMENTS 13
XVII. TRAVEL POLICY AND GUIDELINES 13
XVIII. CELL PHONE POLICY 16
XIX. CASH HANDLING POLICY FOR DEPARTMENTS ACCEPTING PAYMENTS FROM CITIZENS 16
XX. ACCOUNTS PAYABLE 17
XXI. ACCOUNTS RECEIVABLE AND BANKRUPTCY 17
XXII. PAYROLL 19
XXIII. SOCIAL SECURITY NUMBER PRIVACY POLICY 19
XXIV. WATER AND SEWER POLICIES 22
XXV. POVERTY EXEMPTION INCOME GUIDELINES 25
XXVI. INCOME TAX POLICIES 26
INTRODUCTION
The financial policies presented here set forth the basic policy framework for the financial
management of the City of Muskegon. Many of the policies represent long-standing principles,
practices, or traditions that have guided the City in the past. They have been brought together in
one place to ensure their consistency and to provide Commission and staff a comprehensive
reference document for current and future decision-making. While these policies are intended to
provide continuity within a constantly changing environment, it is also intended that they be
reviewed regularly and amended as needed.
I. OPERATING BUDGET POLICY
The City shall adhere to the requirements of the State of Michigan “Uniform Budget Act” (P.A. 621
of 1978, as amended).
The budget shall be balanced by Fund. Budgeted expenditures of each fund will be less than or
equal to the sum of projected fund balance at the beginning of the fiscal year and all revenues
which reasonably can be expected to be received during the fiscal year. It will be the annual goal
of the City to match current operating expenditures with current operating revenues for each fund.
Where this is not possible due to economic downturn or other factors, the “operating deficit” (i.e.
operating revenues less operating expenditures) will be clearly highlighted.
Budgets will be adopted on a basis of accounting consistent with generally accepted accounting
principles. Revenues are budgeted when they become measurable and available and
expenditures are charged against the budget when they become measurable, a liability has been
incurred, and the liability will be liquidated with current resources.
The budget shall be adopted through a “Resolution of Appropriation.” Appropriations will be made
at the departmental or project level for the General Fund Budget and at the fund level for all other
budgets. The level of formal appropriation will constitute the “appropriation center” for each fund
as defined in the state Uniform Budget Act. Transfers of budgeted funds between appropriation
centers will require the formal approval of the City Commission.
The City Manager and City Department Heads are authorized to transfer line-item budget
amounts within appropriation centers. Budget transfers between appropriation centers or
changes to appropriation center totals require formal amendment by the City Commission, which
may be done at any time during the budget year.
Budgets will be carefully monitored throughout the year. Each quarter the budget together with
the policies and priorities on which it is based will be thoroughly reviewed by the City Manager to
determine whether changes are necessary. An amended budget reforecast will be presented to
the City Commission based on this review.
Department Heads are authorized to reallocate budgeted positions between activities under their
jurisdiction; however, new positions may only be created with approval of the City Manager and
within the budgetary authority approved by the City Commission.
All operating funds of the City are subject to the annual budget process and will be reflected in the
annual budget document with the exception of certain “pass-through” funds (such as the current
tax fund), trust and agency funds, funds having a separate fiscal year (e.g. CDBG), and non-
recurring project and grant funds for which a budget shall be adopted at the time the project is
approved.
The enterprise fund and internal service fund operations of the City are intended to be fully self-
supporting, i.e. current revenues will cover current expenditures, debt service, and capital costs.
The City’s budget will portray both direct and indirect costs of programs whenever practical.
As permitted by state law (P.A. 30 of 1978), the City will fund and maintain a separate Budget
Stabilization Fund for the purpose of ensuring that adequate funding is available to maintain levels
of municipal services in the event of a major revenue loss.
CONTINGENCY ACCOUNT
A “contingency” line-item will be included in the General Fund Budget for unforeseen operating
expenditures. The amount of the contingency account will not exceed five percent (5%) of total
budgeted expenditures. If in a given year it is determined that other budgeted operating funds
require a contingency line-item, the same policy will be followed for these funds.
II. CAPITAL IMPROVEMENTS POLICY
A capital improvement program (CIP) will be developed for a period of five years. The CIP will
outline and prioritize all proposed capital projects, including land acquisitions, land improvements,
construction projects and equipment purchases having estimated costs over $50,000 and useful
lives of four or more years. As resources are available, the most current year of the CIP will be
incorporated into the current year of the City’s operating budget. The CIP will be reviewed and
updated annually prior to the beginning of the operating budget cycle.
III. REVENUE POLICY
The City will strive to maintain a diversified and stable revenue system to shelter it from short-run
fluctuations in any one revenue source. The revenue mix should combine elastic and inelastic
revenue sources to minimize the effect of an economic downturn.
The City will estimate its annual revenues using the best information available.
The City will establish all user charges at a level related to the cost of providing the services and
will annually revise user fees (with review by the City Commission) to adjust for the effects of
inflation, program changes or other factors.
The City will set fees and user charges for each enterprise fund, such as the Water Fund and
Sewer Fund, at a level that fully supports the total direct and indirect costs of the activity. Costs
shall include the cost of annual depreciation of capital assets.
The City will set fees for other user activities, such as recreation services, at a level to support the
direct and appropriate indirect costs of the activity.
The City will aggressively pursue collections of delinquent accounts receivable utilizing
appropriate legal means (including outside collection agents) to enforce payment of amounts
owed.
IV. FUND BALANCE POLICY INCLUDING GASB STATEMENT 54 POLICIES
Fund balance is an important indicator of the City’s financial position. Maintaining reserves is
considered a prudent management practice. Adequate fund balances are maintained to allow the
City to continue providing services to the community in case of unexpected emergencies or
requirements and/or economic downturns.
GENERAL FUND
It will be the City’s policy to maintain an unassigned General Fund fund balance equal to at least
thirteen percent (13%) of total actual General Fund Revenues for the preceding year. This level
of fund balance is consistent with the municipal fiscal stress indicator system used by the
Michigan Department of Treasury to monitor the financial health of local units.
FUND BALANCE REPORTING IN GOVERNMENTAL FUNDS
Fund balance will be reported in governmental funds under the following categories using the
definitions provided by GASB Statement No. 54:
Nonspendable fund balance – includes amounts that cannot be spent because they are either
(a) not in spendable form or (b) legally or contractually required to be maintained in-tact.
Nonspendable amounts will be determined before all other classifications and consist of the
following items (as applicable in any given fiscal year):
The City will maintain a fund balance equal to the balance of any long-term outstanding
balances due from others (including other funds of the government)
The City will maintain a fund balance equal to the value of inventory balances and prepaid
items
The City will maintain a fund balance equal to the corpus (principal) of any permanent funds
that are legally or contractually required to be maintained in-tact
The City will maintain a fund balance equal to the balance of any land or other nonfinancial
assets held for sale
Restricted fund balance – includes amounts that can be spent only for the specific purposes
stipulated by the constitution, external resource providers, or through enabling legislation.
Committed fund balance – includes amounts that can be used only for the specific purposes
determined by a formal action of the government’s highest level of decision-making authority.
Commitments will only be used for specific purposes pursuant to a formal action of the City
Commission.
Assigned fund balance – includes amounts intended to be used by the government for specific
purposes but do not meet the criteria to be classified as restricted or committed. In governmental
funds other than the general fund, assigned fund balance represents the remaining amount that is
not restricted or committed.
The City Commission delegates to the City Manager the authority to assign amounts to be used
for specific purposes. Such assignments cannot exceed the available (spendable, unrestricted,
uncommitted) fund balance in any particular fund.
Unassigned fund balance – includes the residual classification for the government’s general
fund and includes all spendable amounts not contained in the other classifications. In other funds,
the unassigned classification should be used only to report a deficit balance from overspending for
specific purposes for which amounts had been restricted, committed, or assigned.
BUDGET STABILIZATION FUND
The City will continue to maintain on its books a budget stabilization fund (as originally created
under PA 30 of 1978). However, for year-end reporting purposes (in accordance with
requirements of GASB 54), the City’s budget stabilization fund will be reported as an assigned
fund balance of the general fund for the purpose of public improvements.
.
V. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING POLICY
The City will establish and maintain those funds required by law and sound financial
administration. Only the minimum number of funds consistent with legal and operating
requirements will be established, however, because unnecessary funds result in inflexibility,
undue complexity, and inefficient financial administration.
An independent full scope audit of all City funds will be performed on an annual basis. Selection
of the independent auditor will be made by the City Commission.
The City will prepare a Comprehensive Annual Financial Report (CAFR) in accordance with
Generally Accepted Accounted Principles (GAAP) as outlined by the Governmental Accounting
Standards Board (GASB). It will be the City’s goal to complete the annual audit and prepare the
CAFR within 120 days of the end of the fiscal year.
The City shall submit annually its CAFR to the Certificate of Achievement for Excellence in
Financial Reporting Program sponsored by the Government Finance Officers Association.
Recommendations made by GFOA reviewers shall be incorporated into the City’s CAFR for the
subsequent year.
VI. DEBT POLICY
EXTERNAL DEBT
The City of Muskegon will not use long-term debt to finance current operations.
The City of Muskegon will follow a policy of full disclosure and report all material facts about its
financial condition in a timely manner.
The retirement of bonds issued by the City (or its component units and authorities) will be equal to
or less than the useful life of the project being funded.
Whenever possible the City of Muskegon (including its authorities) will limit its issuance of debt to
a maximum of $10 million per calendar year to maintain the yield advantages associated with
bank qualified obligations.
The City will structure bond issues to maintain level or decreasing debt service schedules and
maintain debt service payments as a predictable and manageable part of the operating budget.
“Pay-As-You-Go” financing will be used when practical. However, when the City utilizes long-term
debt financing it will ensure that the debt is financed soundly by:
• Conservatively projecting revenue sources that will be utilized to repay the debt.
• Financing the improvement over a period not greater than the useful life of the
improvement, and
• Determining that the benefits to be derived outweigh the total costs (including interest
costs) of the project.
Capital lease, certificates of participation, and lease-purchase financing will be treated as debt
financing and be subject to the same policies.
The City will award sale of its bonds to the responsible bidder whose bid produces the lowest “true
interest cost” (TIC) to the City over the life of the bond issue.
The City (and its Authorities) will normally issue debt through a competitive process in which
formal bids will be solicited from as many interested parties as possible. Under some
circumstances, it is in the City’s best interest to issue debt through a negotiated sale process
instead of using a competitive process. The negotiated sale process will only be used when: 1)
the nature of the debt issue is unique and requires particular skills from the investment banks
involved, 2) the interest rate environment or other economic factors that may affect the issue are
particularly volatile and the negotiated sale process can provide needed stability or, 3) the debt
issue is bound by a closing deadline. In all cases where the negotiated process is utilized, the
underwriter/manager will be selected by a competitive review of their fees, qualifications, and
recent performance.
INTERFUND LOANS
In some situations it may be cost effective to loan money from one City fund to another in lieu of
borrowing from external sources. Such interfund loans may only be made with formal approval of
the City Commission including establishment of a fixed repayment schedule. Interest on interfund
loans will be charged at the rate then available on U.S. Treasury notes having a comparable
maturity.
VII. FIXED ASSETS CAPITALIZATION AND DEPRECIATION POLICY
CAPITALIZATION THRESHOLDS
Fixed assets are assets of a long-term character (i.e. a minimum useful life of two years) which
are intended to continue to be held and used, such as land, buildings, improvements other than
buildings, machinery, vehicles and equipment. This policy is intended to establish guidelines for
accounting for, capitalizing and depreciating fixed assets held by the various City funds.
Category Capitalization Threshold (Unit Cost)
Land $ N/A
Land Improvement 10,000
Buildings 10,000
Equipment 10,000
Vehicles 10,000
Office Equipment and Furniture 10,000
Only those items having unit costs in excess of the threshold limits specified above will be
considered fixed assets for purposes of City accounting records. Fixed assets in the City’s
proprietary type funds (i.e. Enterprise, Internal Service) shall be capitalized in the year of purchase
and depreciated over their estimated useful lives. Fixed assets of all other funds shall be
maintained by the City and depreciated over their estimated useful lives and shown on the City’s
full accrual Government Wide Statement. These include certain public domain general fixed
assets consisting of improvements such as roads, bridges, curbs and gutters, streets and
sidewalks, drainage systems, and lighting systems.
General fixed assets are valued at historical cost or estimated historical cost if actual cost is not
available. Donated assets are valued at their estimated fair value on the date donated. Property
and equipment of the enterprise funds and internal service funds are carried at cost.
DEPRECIATION AND ESTIMATED USEFUL LIFE
Depreciation of Fixed Assets in the City’s Proprietary Funds shall be accomplished using the
simple straight life method. The estimated useful life of assets will be based on IRS policies, past
experience, or other reliable sources. Useful lives typically will not exceed fifty (50) years.
VIII. LIABILITY INSURANCE CLAIM SETTLEMENTS
Under the Michigan Municipal Risk Management Authority (MMRMA) program the City is self-
insured for the first $150,000 of any single liability claim. A portion of the City’s annual “premium”
paid to MMRMA is set aside in a reserve account to cover this retained risk and no disbursement
can be made from this reserve without prior authorization from the City.
When a claim is made against the City, all pertinent information is turned over to MMRMA. The
“claims adjusting” section of MMRMA then investigates the claim thoroughly and recommends a
course of action to the City (e.g. deny claim, settle for no more than X dollars, etc.).
The following policy will govern the handling of such liability claims:
• The City Manager or the Finance Director is authorized to approve settlements up to
$15,000 provided that the settlement is consistent with the recommendation of the
MMRMA.
• Settlements for amounts less than $15,000 which are not consistent with the
recommendation of MMRMA may only be authorized with concurrence of the City
Attorney and timely notification of the City Commission.
• Proposed claim settlements in excess of $15,000 must be reviewed and approved by the
City Commission.
IX. POLICY FOR ADJUSTING UNCOLLECTIBLE ACCOUNTS
During the normal course of conducting its business, the City invoices outside parties for a variety
of reasons ranging from taxes, fines, or penalties to the sale of City services or goods. Most
billings are paid promptly and the majority of those that are not are ultimately collected through
discontinuance of service, use of third-party collection services, or other means. However, it is
periodically necessary to adjust the City’s receivable records by “writing-off” accounts deemed to
be uncollectible or by making an adjustment to reflect the negotiated settlement of a disputed
account.
The City’s policy for adjusting accounts receivable shall be:
The City shall maintain in its general ledger records delinquent accounts receivables for the
five most recent years. A reserve for estimated uncollectible accounts receivable shall be
maintained in the general ledger. The reserve will be equal to one-half of the fund’s
delinquent accounts receivable outstanding as of each June 30th. At the close of each fiscal
year, the City will write-off any balances remaining uncollected that are more than five years
old. Accounts that are written-off may be turned over to a private collection agency for
additional collection efforts.
For receivables under five years old preliminary authorization for adjustments or write-offs of
individual accounts receivable for amounts not in excess of $15,000.00 may be given by the
City Manager or other responsible official designated by the City Manager (e.g. the City
Treasurer in the case of water bills).
The adjustment or write-off of individual accounts receivable for amounts in excess of
$15,000.00 shall be approved by the City Commission on an individual basis.
Adjustments to accounts receivable which are determined by the City Treasurer to be necessary
due to administrative error may be made without going through the procedure outlined above.
X. POLICY FOR ADJUSTING DELINQUENT REAL & PERSONAL
PROPERTY TAXES
The City’s policy for adjusting delinquent personal property taxes shall be as follows:
• A reserve for estimated uncollectible personal property taxes shall be maintained in each
fund having delinquent personal property tax receivables. The reserve will be equal to
one-half of the fund’s delinquent personal property taxes outstanding as of each June
30th.
• The City shall only maintain in its general ledger records delinquent personal property tax
receivables for the two most recent years in an attempt to comply with the GASB 60 day
rule. At the close of each fiscal year, the City will write-off any balances remaining
uncollected that are more than two years old. Balances written off may be turned over to
a private collection agency for additional collection efforts.
Real property taxes that become delinquent are turned over to the County treasurer for collection.
The City is generally made whole at the outset of the collection process and only “charged back”
for those taxes that remain delinquent after 2-3 years of unsuccessful collection effort. If in the
City’s judgment a delinquent account will ultimately be uncollectible through this process the City
will escrow the funds received from the County to cover an eventually charge back.
XI. INVESTMENT POLICY
The Director of Finance serves as the City’s Investment Officer as defined in Michigan Compiled
Laws (MCL) Chapter 129.91.
This Investment Policy replaces any previously dated investment policies, guidelines or lists of
authorized investments.
SCOPE
This Policy shall apply to the investment management of all financial assets under control of the
City.
To the extent practical, all excess cash, except for cash in certain restricted and special accounts,
shall be pooled for investment purposes. The investment income derived from the pooled
investment account shall be allocated to the contributing funds based upon the proportion of the
respective average balances relative to the total pooled balance. Interest earnings shall be
distributed to individual funds on a monthly basis.
OBJECTIVES
The City's principal investment objectives are (in order of importance):
• SAFETY: Preservation of capital and protection of investment principal.
• LIQUIDITY: Maintenance of sufficient liquidity to meet anticipated cash flows.
• YIELD: Attainment of a market value rate of return.
PRUDENCE
The standard of prudence to be used for managing the City's assets shall be the “prudent investor
rule” which in general states that investments shall be made with the judgment and care that
under the circumstances then prevailing, persons of prudence, discretion and intelligence would
exercise in the management of their own affairs, not in regard to speculation but in regard to the
permanent disposition of their funds, considering the probable income as well as the probable
safety of their capital.
The City recognizes that no investment is totally risk less and that the investment activities of the
City are a matter of public record. Accordingly, the City recognizes that occasional measured
losses are inevitable in a diversified portfolio and shall be considered within the context of the
overall portfolio's return, provided that adequate diversification has been implemented and that the
sale of a security is in the best long-term interest of the City.
The Director of Finance and authorized investment personnel acting in accordance with written
procedures and exercising due diligence shall be relieved of personal responsibility for an
individual security's credit risk or market price changes, provided that the deviations from
expectations are reported in a timely fashion to the City Commission and appropriate action is
taken to control adverse developments.
DELEGATION OF AUTHORITY
The Director of Finance may delegate the authority to conduct investment transactions and to
manage the operation of the investment portfolio to the Assistant Finance Director and/or the City
Treasurer. No person may engage in an investment transaction except as expressly provided
under the terms of this Investment Policy.
The City may engage the support services of outside professionals in regard to its investment
program, so long as it can be clearly demonstrated that these services produce a net financial
advantage or necessary financial protection of the City's financial resources.
AUTHORIZED SECURITIES AND TRANSACTIONS
All investments of the City shall be made in accordance with MCL Chapter 129.91 - 129.96 (Act
20 of 1943). Any revisions or extensions of these sections of MCL will be deemed to be part of
this Investment Policy immediately upon being enacted.
INVESTMENT DIVERSIFICATION AND LIQUIDITY
It is the intent of the City to diversify the investments within the portfolio to avoid incurring
unreasonable risks inherent in over investing in specific instruments, individual financial
institutions or maturities. The maximum investment in each of the following categories shall not
exceed 25% of the total portfolio: Commercial Paper, Eligible Bankers Acceptances and
uninsured Certificates of Deposit.
To the extent possible, investments shall be matched with anticipated cash flow requirements and
known future liabilities. The City shall maintain at least 10% of its total portfolio in cash and/or
instruments maturing in 30 days or less.
SELECTION OF BROKER/DEALERS
Broker/dealers will be selected by the Director of Finance on the basis of their expertise in public
cash management and their ability to provide services for the City's account. Approved
broker/dealers and the firms they represent shall be licensed to do business in the State of
Michigan and as such are subject to the provisions of Michigan Statutes relating to the investment
of public funds. Broker/dealers shall attest in writing that they have received and reviewed a copy
of this Policy.
The City may purchase commercial paper, CD’s and other securities from direct issuers as long
as they meet the criteria outlined in the Authorized Securities and Transactions section of this
Policy.
SELECTION OF DEPOSITORY BANKS
Periodically, through a Request for Proposal process, the City shall select a bank to provide
checking account and other banking services for the City. To be eligible for authorization, a bank
must (1) be a member of the FDIC, (2) be eligible to be a depository of funds belonging to the
State of Michigan, (3) maintain a permanent office within the City of Muskegon and, (4) be
financially stable and sound as periodically determine through credit analysis provided through a
reputable bank rating service.
Notwithstanding provision (3) in the preceding paragraph, Time Certificates of Deposit described
in the section of this policy, “Authorized Securities and Transactions” may be purchased from
authorized banks if they meet requirements of Act 20.
SAFEKEEPING AND CUSTODY
The Director of Finance shall select a bank to provide safekeeping and custodial services for the
City. The custodian bank will be selected on the basis of its ability to provide services for the
City's account and the competitive pricing of its safekeeping related services, and shall be
financially stable and sound as periodically determined through credit analysis provided through a
reputable bank rating service.
The Director of Finance shall maintain a file of the credit rating analysis reports performed for the
custodian bank. Bank credit analysis shall be performed on a semi-annual basis.
REPORTING
Accounting and reporting on the City’s investment portfolio shall conform to Generally Accepted
Accounting Principles (GAAP) and the Governmental Accounting Standards Board (GASB)
recommended practices. On a monthly basis, the Director of Finance shall submit to the City
Commission an investment report, listing the investments held by the City, the current market
valuation of the investments and performance results. The report shall include a summary of
investment earnings during the period.
XII. PETTY CASH USES AND LIMITS
Petty cash accounts may be established in such locations and in such amounts as may be
determined necessary by the City Manager. Petty cash disbursements up to $300.00 are
permitted for the following purposes: 1) for the expedited purchase of minor goods or services, 2)
to provide immediate reimbursement to employees for travel or other costs paid out of their own
pocket in the conduct of City business and, 3) to provide immediate refunds to customers as
warranted. All uses of petty cash must be fully supported by receipts or other appropriate
documentation. Petty cash procedures shall be reviewed periodically by the City’s Finance
Department.
Employees traveling on City business may receive a petty cash travel advance of up to $300.00
from the City Treasurer’s Office to be used for travel purposes. The employee’s department head
must approve travel advances. Cash advances of more than $300.00 are discouraged and will
only be made upon written authorization of the employee’s department head and the City
manager.
In order to distinguish travel advance requests from expense reporting, while simplifying the
process to the extent possible, there is a separate form for that purpose. Please note that with
the Request for Petty Cash Travel Advance form, the requesting party must acknowledge that
receipts and any money owed the City must be returned within ten days of return from travel. If
the money and/or expense documentation is not returned, the employee authorizes the full
amount of the travel advance to be deducted from their paycheck along with a $5.00 processing
fee. The Request for Petty Cash Travel Advance forms are available through the City Treasurer’s
Office.
Note that all travel expenses should be reported on the Travel Expense Reporting Form as soon
as possible upon returning from travel. Travel Expense Reporting Forms are available on the
City’s Intranet Page.
XIII. PROCEEDS FROM SALE OF CITY-OWNED REAL ESTATE
From time to time the City sells real estate that it owns. It is City policy that, unless required by
law or by specific direction of the City Commission, proceeds from such property sales shall be
deposited to the City’s Public Improvement Fund to be used to finance general purpose capital
needs.
In the case of tax reverted property sold by the City, sale proceeds will first be used to reimburse
appropriate City funds for expenses incurred in maintaining and selling the property. Any
remaining sale proceeds will be distributed to the City and other taxing jurisdictions in the same
manner as regular property taxes.
XIV. PROCUREMENT CARD PROGRAM POLICY
GENERAL
Regular government purchasing methods, such as purchase orders, can be cumbersome and
costly in relation to the value of goods being purchased. To promote operational efficiency, the
City has adopted a procurement card purchasing program for use with small dollar value
purchases.
A number of unique controls have been developed for the procurement card program. These
controls will ensure that cards can be used only for specific purchases and within specific dollar
limits. In addition, documentation of all purchases is required by each cardholder with further
approval from the department head and the City Manager’s office before payment is made.
The unique procurement card issued by the City has the employee’s name embossed on it
together with the City’s tax-exempt status. No one other than the employee whose name is on the
card may use the card. CITY ISSUED PROCUREMENT CARDS MAY ONLY BE USED BY
DESIGNATED CITY EMPLOYEES FOR THE PURCHASE OF GOODS OR SERVICES FOR
THE OFFICIAL BUSINESS OF THE CITY OF MUSKEGON. UNDER NO CIRCUMSTANCES IS
THE PROCUREMENT CARD TO BE USED FOR PERSONAL PURCHASES.
DESIGNATION OF RESPONSIBLE OFFICIAL
The Finance Director is designated as the official responsible for overseeing compliance with this
procurement card policy including procurement card issuance, accounting for procurement card
transactions, monitoring and payment of procurement card statements.
TRANSACTION AMOUNTS
The procurement card may be used for purchases of individual items up to $2,500.00 in value.
The total monthly dollar value of transactions on each procurement card will generally be limited
to $5,000.00. The City Manager may establish higher monthly credit limits for employees whose
positions require higher than normal use of the procurement card. The total combined authorized
credit limit of all procurement cards issued by the City shall not exceed five percent of the City’s
total budget for the current year. All purchases made with a City procurement card must be fully
supported by receipts, invoices, and other documentation. Such documentation is to be attached
to the monthly procurement card statement and cardholder’s reconciliation.
CREDIT CARD REBATES/REWARDS
To the extent the City earns rebates or rewards from use of procurement cards, the rebates will
be recorded as general fund income used to offset the costs of bank service charges.
CREDIT CARD USE FOR LARGE RECURRING ITEMS
Some vendors accept credit card payment for large recurring bills such as electric bills and solid
waste collection. Since the City can earn rebates on credit card use, it may be to the City’s benefit
to pay these bills via credit card. The City manager and/or finance director will inform the City
commission of these opportunities in advance and will establish special use credit card accounts
that are electronically restricted to the specific type of transaction/vendor.
EMERGENCY TRANSACTION AMOUNTS
In the event of an extended emergency, the City Manager is authorized to establish higher
procurement card limits on a temporary basis so that City employees may procure goods and
services necessary to deal with the emergency. In no event are emergency transaction limits to
be in effect for more than thirty days.
INTEREST COSTS AND SALES TAX
It is the City’s policy to pay in full each month on or before the due date the total balance due on
its procurement cards thereby avoiding interest charges. As a municipality, the City is exempt
from payment of state sales tax. City procurement card users are expected to exercise care in
conducting transactions to ensure that they are not incorrectly charged for sales tax.
OTHER PURCHASING POLICIES
The procurement card is a supplement to other purchasing procedures such as purchase orders.
As with the other purchasing methods, the following conditions must be met when using your
procurement card.
• Each single purchase may be comprised of multiple items, but the total cannot exceed the
single purchase dollar limit on your procurement card.
• When purchases exceed the established dollar limits, the normal procedures of using
purchase orders must be followed unless written authorization is given by the employee’s
department head.
• The least expensive item that meets your basic needs should be bought and competitive
quotes must be obtained in accordance with existing purchasing policies.
• Cardholders must follow normal budgetary control procedures to ensure that sufficient
funds are available prior to making purchase.
• Use of the procurement card does not relieve the cardholder from complying with Federal,
State and City ordinances, regulations, policies and procedures.
• Use of the procurement card is not intended to replace effective procurement planning
which enable volume discounts.
• Purchases are not to be split to circumvent procurement regulations.
RESTRICTIONS ON USE
The following list covers purchases for which procurement cards use is prohibited:
• Cash advances through bank tellers or teller machines.
• Traveler’s Checks.
• Purchase of gasoline or diesel fuel for City vehicles except in emergencies (use City
pumps or Fuelman System).
• Purchase of items stocked in City inventory unless required in emergencies.
• Additional specific restrictions as deemed necessary by individual departments.
XV. ELECTRONIC PAYMENTS
Modern technology makes it possible to transfer funds electronically in lieu of issuing paper
checks. This technology offers many benefits to users including lower transaction costs, reduced
opportunities for fraud, and better cash management control. The City has effectively utilized this
technology for several years for purposes such as direct deposit of employee paychecks and
automatic payment of customers’ water bills. The City supports continued use and expansion of
electronic payments technology for payment of vendors and other uses provided appropriate
internal controls are established. The City Manager and Finance Director, in conjunction with the
City’s independent auditors, are authorized to develop the necessary procedures and controls for
expanded use of this technology in the City of Muskegon.
XVI. ACCEPTANCE OF CREDIT CARD PAYMENTS
The City has studied the costs and benefits of accepting credit card payments from customers
and has determined that credit card acceptance significantly enhances customer service and
provides administrative and other benefits to the City that outweigh the associated costs.
Accordingly, the City’s policy shall be to accept credit cards for payment of all City bills and
invoices except routine payment of property taxes. The City Treasurer or Income Tax
Administrator may permit payment by credit card for property taxes in specific collection cases
where they have determined it is in the City's best interest to do so.
XVII. TRAVEL POLICY AND GUIDELINES
SCOPE
This policy applies to all City of Muskegon elected officials, employees, board members,
volunteers and others when travelling on official City business and/or travelling at City expense.
AUTHORIZED TRAVEL
In the normal course of conducting City business, employees are required to travel for purposes
of work-related meetings, training opportunities, professional conferences, or other business
purposes. As part of the annual budget process, departments’ request funding for travel purposes
for the coming year. Department heads have full authority to approve travel for their employees
(without additional authorization) within limits of the department's approved travel budget. Travel
that is significantly beyond the parameters of the department's travel budget should be approved
by the City Manager together with a corresponding budget adjustment if required.
TRAVEL COSTS
The City recognizes that its employees are responsible adults who take the same care in incurring
travel expenses while on City business as when traveling on personal business. Accordingly, this
policy does not establish rigid cost limits for lodging, meals, or other travel costs. Instead, the
following general guidelines are offered while recognizing that special circumstances may dictate
that employees incur costs beyond these guidelines:
Lodging - Lodging costs should generally range between $75.00 - $150.00 per night depending on
location (based on single occupancy and including local taxes which the City is not exempt from).
Employees are relied upon to use their good judgment in selecting safe and economical
accommodations.
Two important factors to remember when making hotel reservations: 1) you should always ask for
special "government" rates that are typically deeply discounted from regular rates and, 2) you
should identify the travel as official City business exempt from state sales tax and inquire as to
any specific documentation requirements the hotel may have.
Costs for in-room movies, exercise rooms, or other hotel services not included in the basic room
rate are not reimbursable by the City.
Meals - Meal costs should generally not exceed $40.00 per person for each full day of travel
(including gratuities and taxes). For partial day travel or individual meal reimbursements, the
following limits will apply:
Breakfast $8.00 Travel Before 8:00 AM
Lunch $10.00 Travel Before 12:00 Noon
Dinner $22.00 Travel Before 6:00 PM
Individual meal limits will apply regardless of whether or not reimbursement is sought for other
meals during the day. For example, it is not permissible to “skip” breakfast and lunch in order to
be reimbursed $40.00 for a dinner; instead, the dinner will only be reimbursed up to the $22.00
limit specified above. Often lunch or other meals are included in the registration price of a seminar
or conference. It is expected that employees attending these functions will partake in these
meals. The City will not reimburse meal costs if the employee chooses to forgo the conference
meal and dine elsewhere.
Transportation - Vehicle travel may be by either City vehicle or the employee's private vehicle. If a
private vehicle is used, reimbursement will be based on the number of miles traveled times the
allowable IRS business mileage rate in effect at that time. Air travel is generally used for
destinations more than 300 miles away. Employees are encouraged to take advantage of
discounted airfares and should utilize the Muskegon County Airport whenever possible.
Employees may elect to use private vehicles for travel to destinations more than 300 miles away
and will be reimbursed based on the current IRS mileage rate or equivalent round trip coach
airfare for that destination, whichever is less. However, no reimbursement will be made for added
lodging or meal costs incurred because of the extra travel time.
Employees who elect to use their own vehicle should be aware that under the laws of the State of
Michigan, every vehicle owner is required purchase insurance that is the primary coverage for that
vehicle. While using a private vehicle for City travel, any automobile liability insurance coverage in
force for the City is excess coverage only for the employee/vehicle owner.
Other Costs - Other incidental costs (such as parking, ground transport, phone calls), should not
exceed an average of $15.00 per day. Rental car costs generally will not be reimbursed by the
City as it is expected that employees will utilize lodging in close proximity to the conference or
other event. In extraordinary circumstances where the employee deems it necessary to rent a
car, reimbursement will only be made with the written authorization of the City manager.
Traveling With Spouse - There is no objection to employees inviting their spouse to travel along
on City business. However, the City will pay for none of the spouse’s travel expenses and care
should be taken to maintain separate records of the employee's reimbursable travel costs.
PAYING FOR TRAVEL COSTS
Methods available for employees to pay travel costs include the following:
City Credit Card - Employees who have been issued a City of Muskegon credit card should use it
to pay their travel costs. Additionally, in each department a credit card holder is designated to use
their card to pay for other employees' travel costs that can be readily handled in advance (e.g.
airline tickets, conference registration, hotel, etc.).
Personal Credit Card - Employees who have not been issued a City credit card may find it
convenient to pay travel costs on their own personal credit card and receive cash reimbursement
from the City.
Petty Cash Advance - Employees traveling on City business may receive a petty cash travel
advance of up to $300.00 from the City Treasurer’s Office to be used for travel purposes. The
employee’s department head must approve travel advances. Cash advances of more than
$300.00 are discouraged and will only be made upon written authorization of the employee’s
department head and the City manager.
In order to distinguish travel advance requests from expense reporting, while simplifying the
process to the extent possible, there is a separate form for that purpose. Please note that with
the Request for Petty Cash Travel Advance form, the requesting party must acknowledge that
receipts and any money owed the City must be returned within ten days of return from travel. If
the money and/or expense documentation is not returned, the employee authorizes the full
amount of the travel advance to be deducted from their paycheck along with a $5.00 processing
fee. The Request for Petty Cash Travel Advance forms are available through the City Treasurer’s
Office.
Note that all travel expenses should be reported on the Travel Expense Reporting Form as soon
as possible upon returning from travel. Travel Expense Reporting Forms are available on the
City’s Intranet Page.
REPORTING REQUIREMENTS FOR TRAVEL EXPENSE REIMBURSEMENT
Travel expense reporting has been simplified to the extent possible. The following guidelines
apply to travel expense reporting:
• Travel expenses are to be reported on the Travel Expense Reporting Form included with this
pamphlet as soon as possible upon returning from travel.
• Only expenses for which cash reimbursement is sought by the employee need to be reported.
Expenses paid in advance or expenses paid by City credit card should not be included on the
Travel Expense Reporting Form.
• Expenses must always be supported by receipts or other documentation.
• If total expenses to be reimbursed are $300.00 or less, you may obtain immediate
reimbursement from the City Treasurer's Office.
• If total expenses to be reimbursed are more than $300.00, they will be reimbursed as a
separately itemized, non-taxable category on the employee's regular bi-weekly paycheck.
Accordingly, travel expense report forms must be submitted to the Finance Office with all
necessary approvals no later than 5:00PM on the Friday prior to payday for reimbursement on
that paycheck.
DOUBLE-DIPPING
It should go without saying that City expects honest and ethical behavior from its employees in
handling travel expense matters. Travel expenses that are partially or fully paid by outside parties
(such as federal agencies) are not to also be submitted for reimbursement from the City. Any
employee found to be deliberately misreporting travel expenses will be subject to disciplinary
action as well as potential prosecution.
LOCAL BUSINESS EXPENSES
In addition to travel expenses, it is sometimes appropriate for City employees to incur costs on
behalf of boards or committees or in the course of entertaining visiting guests. Department heads
have full authority to approve such costs (within budgetary limits) and the same general guidelines
as outlined above for employee travel expenses should be followed.
XXVIII. CELL PHONE POLICY
GOAL
It is the goal of the City to provide cellular telephones to City employees who need them to
perform the essential functions of their jobs.
SAFETY
The first concern of the City is the safety of their employees and the public. Employees should
use proper safety procedures at all times when using a cellular phone, especially while operating
equipment, driving on City business or performing similar duties. This includes pulling to the side
of the road if feasible when making or receiving a cellular phone call. Text messages under no
circumstances should be sent or viewed while driving.
POLICY
Department Heads and Supervisors may request cellular phones for employee use when the
expense and use of the phone is justifiable in terms of improved service and responsiveness to
citizens and/or other employees. Cellular phones should be provided only when they are required
for the employee to perform essential functions of his/her job. Additionally at the discretion of the
Department Head/Supervisor enhanced features or smart phones may be requested. Smart
phones or a phone with enhanced features will require an employee to share in the cost. This
amount will be determined by Finance annually. The City realizes the phone will be used for
personal use as well as City use however excessive use or abuse of the phone and/or phone
services could result in additional charges or cancellation of phone services.
It is the responsibility of the Department Head/Supervisor to review the monthly statements and
report any concerns to the Finance Department.
With approval from the City Manager and Department Head an employee may elect to use his/her
own cellular phone for City business. The phone must be fully available during the employee’s
scheduled work hours. Employees using their personal cellular phone will be reimbursed per
month for the use of their phone. This reimbursement is taxable income to the employee and the
amount will be determined by Finance annually. Certain employees who are required to have
enhanced phone features/smart phones for their job may be reimbursed at a higher rate with
approval from the City Manager.
XIX. CASH HANDLING POLICY FOR DEPARTMENTS ACCEPTING
PAYMENTS FROM CITIZENS
This policy is intended as a guide and supplement to other measures which should exist
surrounding the collection, timely deposit, and recording of collections in the records at each City
location.
For some City departments that have higher volumes of cash transactions, a cash register is used
to record receipt transactions. All transactions must be entered in the register and a receipt
must be issued to each customer. For other departments, the method for recording and
balancing is with a receipt book that has pre-numbered receipts. This method is acceptable with
the understanding that all transactions are entered, and a receipt is issued to every customer.
The pre-numbered receipt books are issued to City departments by the treasurer’s office.
City departments handling cash have starting cash, which is used for making change for their
customers. When balancing out the daily transactions, you first remove the starting cash
amount. The receipts should offset the money (cash and checks) that you have remaining. If
this is not the case, then, you have an overage or a shortage. This must be noted on your pink
“cash-out” slip/sheet. Two signatures are required for all deposits. If a discrepancy (shortage or
overage) occurs, the department’s authorized person (usually the department head) must review
and sign the cash-out slip/sheet.
For departments that have a cash register, on a daily or other periodic basis, you should enter a
summary of the receipt transactions into the GEMS Financial System’s Cash Receipts module on
a “cash sheet” and generate a “Cash Receipts Edit” report. The “Cash Receipts Edit” report,
cash register transaction summary tape, money received, an adding machine tape and/or item
count of checks and the “cash-out” sheet should be hand delivered to the City Treasurer’s office
each day. The treasurer’s office will issue a receipt for the total amount deposited.
For departments without a cash register, on a daily or other periodic basis, you should prepare a
deposit report detailing the receipt transactions being deposited. Each deposit report includes all
pre-numbered receipt numbers used by the department since the last report, even if the receipt
was voided. The deposit report, money received, an adding machine tape and/or item count of
checks and the “cash-out” sheet should be hand delivered to the City Treasurer’s office each day.
The treasurer’s office will issue a receipt for the total amount deposited.
If assistance is needed in reference to any of the above, please contact the treasurer’s office.
XX. ACCOUNTS PAYABLE
The City fully recognizes the importance of paying its vendors and suppliers in a timely manner.
Late vendor payments result in higher costs as well as damage to the City’s reputation.
Accordingly, it is City policy to issue accounts payable (A/P) checks on the second and fourth
Fridays of each month. This cycle will ensure that (provided timely departmental approvals are
obtained) vendor payments will be made within 30 days of invoice receipt.
City departments are expected to plan their payment transactions around the regular A/P check
cycle; off-cycle A/P checks will not be permitted without the approval of the Finance Director or
Assistant Finance Director. In emergency situations where payment cannot wait for the regular
A/P check cycle, arrangements can be made with the Finance Department to electronically
transfer funds to the vendor’s account.
XXI. ACCOUNTS RECEIVABLE AND BANKRUPTCY
ACCOUNTS RECEIVABLE BILLING OUTSOURCE
The City’s Collection Agency will handle billings for the following types of invoices:
• Environmental
• Demolition and Board Ups
• Impounds
• Vacant Building
The Collection Agency will generate the initial invoice along with any follow up/delinquent notices,
pre-collection notices and collection notices. In an attempt to promote timely payment, invoices for
environmental and demolition issues paid within the first 30 days will receive a 20% discount.
These invoices will only be recorded as revenue to the City when they are paid.
Environmental Invoices can be appealed through the Planning department within 30 days from the
date of the original invoice.
ACCOUNTS RECEIVABLE PROCEDURES
Each department will input invoices through the City’s A/R system software for billing types not
handled by the Collection Agency. The Treasurer’s Office will process the Receivables every
Friday and mail out the invoices. Each department should periodically but no less than monthly
review invoices their office has initiated for payment. It is up to the individual departments to
monitor the payment of their accounts and notify the Finance Division of problems. The
Treasurer’s Office will review and turn over to the Collection Agency invoices outstanding for 90 or
more days.
LEGAL ACTION
Legal action may be used only as a last resort to collect on delinquent accounts. On the advice of
the Collection Agency it will be up to the City Treasurer and/or Income Tax Administrator / Deputy
Treasurer to determine which accounts warrant such action taking into consideration time and
added costs in collecting the delinquent account(s).
SETTLEMENTS
From time to time, debtors may want to enter into negotiations regarding their delinquent
account(s). The City Treasurer and/or Income Tax Administrator / Deputy Treasurer will have the
authority to enter into meaningful settlement negotiations with the debtor for accounts under
$15,000.
OBSERVATION OF COLLECTION LAWS
The City Treasurer and/or Income Tax Administrator / Deputy Treasurer will ensure that all
Federal, State and local laws are observed and understood by all whom engage in collection
activities on behalf of the City of Muskegon.
BANKRUPTCIES
Bankruptcy notices should always be forwarded to the Income Tax Administrator / Deputy
Treasurer, regardless of whether the department receiving the notice of bankruptcy has an
outstanding receivable balance due from the debtor or not. Other departments throughout the
City may also have business pending with the debtor and must be notified of the bankruptcy
status.
Upon receipt, the Income Tax Administrator / Deputy Treasurer will circulate a notice to various
departments which typically deal with receivable accounts and who may be maintaining a
collection account with the debtor. Departments wishing to be included in the routing on a regular
basis should contact the Income Tax Administrator / Deputy Treasurer.
If a department receives correspondence from the Income Tax Administrator / Deputy Treasurer
requesting information on outstanding debts involved in a bankruptcy, the department should
return to the Income Tax Administrator / Deputy Treasurer the requested information, with
supporting documents, within seven days of receipt. The Income Tax Administrator / Deputy
Treasurer will consolidate information from the City as a whole and prepare and file a claim on a
timely basis.
Departments utilizing an outside collection agency should notify the agency that upon receipt of a
bankruptcy notice, the agency is required to close and return the account to the City immediately.
Under no circumstances is an outside agency, such as a collection agency, to file a bankruptcy
claim on behalf of the City.
The Income Tax Administrator / Deputy Treasurer will review certain accounts that may be
forwarded to the City Attorney’s Office for consideration due to the complexity of the bankruptcy
proceeding.
Upon receipt of a bankruptcy discharge or dismissal, the Income Tax Administrator / Deputy
Treasurer will notify all departments involved.
XXII. PAYROLL
DEDUCTIONS
The City is required to make various deductions from employee paychecks for taxes, pension
contributions, union dues and other purposes mandated by law, union contracts, or terms of
employment. Additionally, the City offers a range of “voluntary” deduction programs deemed to be
of general benefit to employees. These include deferred compensation retirement savings,
additional life insurance purchase, and U.S. Savings Bonds.
From time to time, outside firms (typically offering investment and/or insurance products)
approach the City about including their programs on the City’s voluntary payroll deduction menu.
Although such programs are touted as “employee benefits having no-cost to the City”, the fact is
that these programs can entail significant costs not only for payroll administration, but also in
terms of employee time consumed in marketing or educational efforts. The City’s general policy
will be to deny such requests. However, the City may elect to implement voluntary deduction
programs it deems to be worthwhile.
DIRECT DEPOSIT
The City encourages Direct Deposit of payroll checks both as a means to improve operational
efficiency and reduce opportunities for fraud. To the extent allowed by state law, the City may
elect to mandate all employees be paid via Direct Deposit. The following polices will govern the
City’s Direct Deposit practices:
•New employees will be given the choice of full direct deposit to one or multiple financial
institution and/or accounts or to receive a paper check.
•Current employees will no longer be able to choose partial direct deposit and receipt of a
paper check.
•Employees who currently direct deposit a portion of their payroll and receive a paper check
will not be allowed to make any changes to their deposit accounts or amounts unless they
are switching to full direct deposit.
•To the extent allowed by state law, the City may elect to mandate all employees be paid via
Direct Deposit.
XXIII. SOCIAL SECURITY NUMBER PRIVACY POLICY
Section 1. Purpose
The purpose of this policy is to protect confidential information from individuals and businesses
that have contact with the City of Muskegon.
Section 2. Definitions
(a) "Computer", "computer network", or "computer system" mean those terms as defined by the
City of Muskegon’s Information Technology Department
(b) "Mailed" means delivered by United States mail or other delivery service that does not require
the signature of recipient indicating actual receipt.
(c) "Person" means an individual, partnership, Limited Liability Company, association, corporation,
public or nonpublic elementary or secondary school, trade school, vocational school, community
or junior college, college, university, state or local governmental agency or department, or other
legal entity.
(d) "Publicly display" means to exhibit, hold up, post, or make visible or set out for open view,
including, but not limited to, open view on a computer device, computer network, website, or other
electronic medium or device, to members of the public or in a public manner.
(e) "Website" means a collection of pages of the world wide web or internet, usually in HTML
format, with clickable or hypertext links to enable navigation from 1 page or section to another,
that often uses associated graphics files to provide illustration and may contain other clickable or
hypertext links.
Section 3. Prohibited use of social security number of employee, student, or
other individual; exceptions.
(1) Except as provided in subsection (2), a person shall not intentionally do any of the following
with the social security number of an employee, student, or other individual:
(a) Publicly display all or more than 4 sequential digits of the social security number.
(b) Subject to subsection (3), use all or more than 4 sequential digits of the social security number
as the primary account number for an individual. However, if the person is using the social
security number under subdivision (c) and as the primary account number on the effective date of
this act, this subdivision does not apply to that person until January 1, 2006.
(c) Visibly print all or more than 4 sequential digits of the social security number on any
identification badge or card, membership card, or permit or license.
(d) Require an individual to use or transmit all or more than 4 sequential digits of his or her social
security number over the internet or a computer system or network unless the connection is
secure or the transmission is encrypted.
(e) Require an individual to use or transmit all or more than 4 sequential digits of his or her social
security number to gain access to an internet website or a computer system or network unless the
connection is secure, the transmission is encrypted, or a password or other unique personal
identification number or other authentication device is also required to gain access to the internet
website or computer system or network.
(f) Include all or more than 4 sequential digits of the social security number in or on any document
or information mailed or otherwise sent to an individual if it is visible on or, without manipulation,
from outside of the envelope or packaging.
(g) Subject to subsection (3), beginning January 1, 2006, include all or more than 4 sequential
digits of the social security number in any document or information mailed to a person, unless any
of the following apply:
(i) State or federal law, rule, regulation, or court order or rule authorizes, permits, or
requires that a social security number appear in the document.
(ii) The document is sent as part of an application or enrollment process initiated by the
individual.
(iii) The document is sent to establish, confirm the status of, service, amend, or terminate
an account, contract, policy, or employee or health insurance benefit or to confirm the
accuracy of a social security number of an individual who has an account, contract,
policy, or employee or health insurance benefit.
(iv) The document or information is mailed by a public body under any of the following
circumstances:
(a) The document or information is a public record and is mailed in
compliance with the freedom of information act, 1976 PA 442, MCL 15.231 to
15.246
(b) The document or information is a copy of a public record filed or recorded with a
county clerk or register of deeds office and is mailed by that office to a person
entitled to receive that record.
(c) The document or information is a copy of a vital record recorded as provided by
law and is mailed to a person entitled to receive that record.
(v) The document or information is mailed by or at the request of an individual whose
social security number appears in the document or information or his or her parent or
legal guardian.
(2) Subsection (1) does not apply to any of the following:
(a) A use of all or more than 4 sequential digits of a social security number that is authorized or
required by state or federal statute, rule, or regulation, by court order or rule, or pursuant to legal
discovery or process.
(3) It is not a violation of subsection (1)(b) or (g) to use all or more than 4 sequential digits of a
social security number if the use is any of the following:
(a) An administrative use of all or more than 4 sequential digits of the social security number the
ordinary course of business, by a person or a vendor of a person or a vendor or contractor of a
person, to do any of the following:
(i) Verify an individual’s identity, identify an individual, or do another similar administrative
purpose related to an account, transaction, product, service, or employment or
proposed account, transaction, product, service, or employment.
(ii) Investigate an individual’s claim, credit, criminal, or driving history.
(iii) Detect, prevent, or deter identity theft or another crime
(iv) Lawfully pursue or enforce a person’s legal rights, including, but not limited to, an
audit, collection, investigation, or transfer of a tax, employee benefit, debt, claim,
receivable, or account or an interest in a receivable or account.
(v) Lawfully investigate, collect a spousal obligation or tax liability.
(vi) Provide or administer employee or health insurance or membership benefits, claims,
or retirement programs.
(b) A use of all or more than 4 sequential digits of a social security number as a primary account
number that meets both of the following;
(i) The use began before the effective date of this act.
(ii) The use is ongoing, continuous, and in the ordinary course of business. If the use is
stopped for any reason, this subdivision no longer applies.
Section 4. Privacy policy
(1) Effective January 1, 2006, all employees for the City of Muskegon are required to abide by the
Social Security Policy.
(a) All information that contains social security numbers must be handled discretely and remain
confidential
(b) Prohibits unlawful disclosure of the social security numbers.
(c) Employees will only have access to social security numbers on a need to know basis and if it
pertains the ordinary course of business.
(d) All documents that contain social security numbers must be shredded or destroyed in a
manner that information is no longer legible.
Section 5. Exemption from disclosure
All or more than 4 sequential digits of a social security number contained in a public record are
exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to
15.246, pursuant to section 13(1)(d) of the freedom of information act, 1976 PA 442, MCL 15.243.
Sec. 6. Violation of Privacy Policy
(1) A person who violates section 3 with knowledge that the person's conduct violates this act is
guilty of a misdemeanor punishable by imprisonment for not more than 93 days or a fine of not
more than $1,000.00, or both.
(2) An individual may bring a civil action against a person who violates section 3 and may recover
actual damages. If the person knowingly violates section 3, an individual may recover actual
damages or $1,000.00, whichever is greater. If the person knowingly violates section 3, an
individual may also recover reasonable attorney fees. Except for good cause, not later than 60
days before filing a civil action, an individual must make a written demand to the person for a
violation of section 3 for the amount of his or her actual damages with reasonable documentation
of the violation and the actual damages caused by the violation. This subsection does not apply to
a person for conduct by an employee or agent of the person in violation of a privacy policy created
pursuant to section 4 or in compliance with the fair credit reporting act, 15 USC 1681 to 1681v, or
subtitle A of title V of the Gramm-Leach-Bliley act, 15 USC 6801 to 6809, if the person has taken
reasonable measures to enforce its policy and to correct and prevent the reoccurrence of any
known violations.
XXIV. WATER AND SEWER POLICIES
CHARGES FOR LATE PAYMENTS
Bills not paid by the due date shall be subject to a service charge equal to ten (10%) percent of
the billing. In the event a delinquent bill must be spread on the taxes, for the purpose of covering
associated administrative costs, an additional service charge equal to twenty (20%) percent with a
minimum service charge of $25.00 and a maximum service charge of $100.00 of the original
delinquent billing amount shall be charged.
ADJUSTMENT OF BILLS FOR MAJOR LEAKS
RESIDENTIAL WATER/SEWER LEAK ADJUSTMENT REGUALTIONS
The purpose of these regulations is to promote water conservation by encouraging customers to
promptly fix leaks and plumbing problems and to establish guidelines that provide fair and
consistent treatment of customers requesting leak adjustments.
TYPES OF ADJUSTMENTS
1) Adjustments for leaks where water was discharged into the sanitary sewer
system.
2) Adjustments for leaks where water was not discharged into the sanitary sewer
system.
RULES
No more than one leak adjustment will be allowed in any two year (24 month) period.
No more than two consecutive billing periods will be adjusted.
The request must be made within 30 days of the due date for the period initially involved and must
be accompanied by the following:
• A written statement from the customer describing the nature of the problem, the
date repairs were completed, and copies of the paid receipts for services and/or
supplies (where applicable).
• Current readings (at the time of the request) from both the meter and remote
device to be furnished by customer.
Leak adjustments will be based on metered usage experience after repairs are made and will be
made only if usage is demonstrably reduced (after adjusting for any extenuating circumstances).
If lost water entered the sanitary sewer system, leak adjustments to the customer’s water and
sewer billing will equal 25% of the estimated loss for no more than two billing periods.
If the lost water did not enter the sanitary sewer system (i.e. leaks in crawl spaces or into the
ground) water charges will be adjusted 25% of the estimated loss for no more than two billing
periods and sewer charges will be adjusted to normal usage based on prior year’s usage patterns.
If a leak is suspected but cannot be detected by the occupant or owner, additional assistance may
be requested from the Water Maintenance Department at no charge to the customer.
SHUTOFF PRACTICES
While the City is authorized to shut off water service for any delinquent bill, the City will normally
shut off water or sewer service if the charges to the premises or the meter in question are
delinquent in the amount of $50.00 or more. This amount and practice shall vary, and the
threshold amount for shutoff may be changed by the decision of the City Manager, from time to
time, to an amount less or more than $50.00. This decision shall be made by the City Manager
based on the administrative and enforcement availability and capability of City personnel, and the
cost incurred by the City by using this method of enforcement.
BILLING INITIATION AND SERVICE CHANGES
Because state law dictates that a municipality that provides municipal water and sewer service to
a property shall have a lien against the premises, the City requires that the legal property owner
sign on for water and/or or sewer billing service and sign off for water and/or sewer service. The
owner must approve any billing changes by signing an application for service form located at the
Treasurer’s Office/Water Billing Department. Positive identification is required to be provided.
BILLING CYCLES
For the purpose of reading water meters and billing customers, the city is divided into districts.
The meters for each district are read monthly and the customer accounts are also billed each
month with bills being due at least 15 days after the billing date.
E-BILLING
City water and sewer customers can sign up to receive their monthly bill in paperless format via
the internet. Customers that agree to receive their monthly water and sewer bill via the internet
help save paper, printing and postage costs and also receive a credit on their monthly bill.
AUTOMATIC PAYMENT (AUTOPAY)
City water and sewer customers can sign up to automatically pay their water and sewer bill in the
Automatic Pay program. Under the Automatic Pay program the customer’s water bill payment is
automatically deducted from their bank checking account or charged to their credit card account
each month when the bill is due. Customers enrolled in the Automatic Pay program receive a
credit on their monthly bill.
WATER/SEWER AFFIDAVIT
Property owners who desire, pursuant to MCL123.165, to avoid a tenant’s unpaid water/sewer bill
from becoming a lien against the real estate, may execute an affidavit and file it with the City of
Muskegon Water/Sewer Billing Department, 933 Terrace Street, Muskegon, MI 49440, together
with a deposit of an amount which may be established from time to time by the Muskegon City
Commission. A copy of the executed lease agreement must also be provided. The owner is
required to use the affidavit form provided by the City. The requirements and contents of the
affidavit are as follows:
1) The written lease with tenant; said lease must specifically provide that the tenant, not the
owner of the property, is directly responsible for all water and sewer bills associated with
the unit under lease to that tenant.
2) The affidavit must be filled in completely, accurately, signed and notarized. If it is not
correctly and completely filled out, signed and notarized, any benefits allowed pursuant
to MCL 123.165 will not be available to the property owner.
3) If there is more than one property owner or tenant; said affidavit must provide all
applicable names. All required data must provide for said affidavit to be valid and
enforceable.
4) The affidavit must contain the exact date upon which the tenant’s written lease
terminates. If the lease is extended, the extension must be in writing and the new
termination date provided to the City with an affidavit containing the new information.
5) The required deposit must be paid at the time of submission of the affidavit to the City.
XXV. POVERTY EXEMPTION INCOME GUIDELINES
The guidelines shall include but not be limited to the specific income and asset levels of the
claimant and all persons residing in the residence, including any property tax credit returns filed in
the current or immediately preceding year.
To be eligible, a person shall do all of the following on an annual basis:
1) Be an owner of and occupy as a principal residence the property for which an
exemption is requested.
2) File a claim with the City Assessor or Board of Review, accompanied by Federal and
State Income tax returns for all persons residing in the residence, including any
property tax credit returns filed in the immediately preceding year or current year. or a
form 4988, if applicable.
3) Produce a valid driver’s license or other form of positive identification if requested.
4) Produce a deed, land contract, or other evidence of ownership of the property for
which an exemption is requested if requested.
5) Meet the Federal poverty income guidelines as defined and determined annually by
the United States Office of Management and Budget (or its successor).
6) Total household assets, except for the principal residence being claimed, essential
household goods, and one motor vehicle, may not exceed one quarter (25%) of the
Federal poverty guideline for the entire household. Assets include, but are not limited
to real estate, motor vehicles, recreational vehicles and equipment, time shares,
certificates of deposit, savings accounts, checking accounts, stocks, bonds, life
insurance, retirement funds, antiques and collectibles, etc. Assets do not include
basic essential household goods such as furniture, appliances, dishes and clothing.
The value of assets will not be reduced by the amount of any indebtedness owed on
such assets, or any indebtedness otherwise owed by the applicant or members of the
household.
7) The applicant must be able to produce evidence as requested that they have owned
and occupied the residence for a minimum of two years before tax day of the year in
which they seek the exemption.
8) The State Equalized Value of the property for which the exemption is claimed shall
not exceed the mean average for residentially-classed properties in the City of
Muskegon for the current tax year.
The Board of Review shall follow the above stated policy and Federal guidelines in granting or
denying an exemption, unless the Board of Review determines there are substantial and
compelling reasons why there should be a deviation from the policy and Federal guidelines and
these are communicated in writing to the claimant.
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XXVI. INCOME TAX POLICIES
PAYMENT AGREEMENTS
The City of Muskegon Income Tax Office does accept payment agreements. The terms of the
agreement are as follows:
• Twenty five percent (25%) of the total tax due for all years must be paid plus a $15.00 fee.
• The remaining balance must be paid one year from the inception of the agreement.
• All future tax liabilities must be paid on time. This includes withholding tax payments if
required.
• Interest and penalties will continue to accrue until the payment plan is paid in full.
• The City of Muskegon has the right to void this agreement at anytime.
If the taxpayer does not remain current on their payment agreement the City of Muskegon has the
right to pursue payment through the court system or a collection agency.
WRITE OFF POLICY
The Income Tax Department may write off income tax liability deemed not collectable due to
death or other reason. The Income Tax Administrator is authorized after ten (10) years to review
and to write off total tax liability of a taxpayer up to $15,000. Income Tax liability over $15,000
requires City Commission approval before a write off can occur.
PROOF OF RESIDENCY
The City of Muskegon Income Tax follows the State of Michigan law to determine residency.
Resident means an individual domiciled in the city. Domicile means a place where a person has
true, fixed and permanent home and principle residence.
Michigan law defines principal residence as the one place where a person has his or her true,
fixed, and permanent home to which, whenever absent he or she intends to return and that shall
continue as a principal residence until another principal residence is established.
In order to verify a person’s claim that a particular property is a principal residence, the City of
Muskegon will accept various documents that, taken together, to establish that the person or
persons is a resident. Examples include drivers license, voter registration card, state identification
cards, property tax records, mortgage deeds, rental agreements, income tax records and other
documentation. No one of these factors taken alone is controlling over any other factor.
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