Southwest Michigan Building Authority
7275 West Main Street
Kalamazoo MI 49009
269-585-4150
www.swmiba.org
Regular Board Meeting
June 24th, 2021
8:30 AM
Via Zoom
Meeting Link: https://zoom.us/j/94963176726
Meeting ID: 949 6317 6726
Call-in Number: +1 312 626 6799 US (Chicago)
Citizen Comments may be submitted in writing via email to kjgibson@swmiba.org by the close of
business the day before the meeting date listed above, and will be read aloud during that portion of
the meeting. Citizens are also welcomed to speak during the public comment session, but are asked
to remain muted for the remainder of the meeting.
Agenda
1. Call to Order
2. Roll Call – Provide the City/Township/Village and County from which you are attending.
3. Citizen Comments on Non-Agenda Items
a. Reading of Public Comment – Kyle Gibson
4. SeberTans Audit Presentation – Ben Walker
5. Consent Agenda
a. Meeting Minutes – May 27, 2021 Regular Meeting
b. June 2021 Financial Reports
c. Memo Re: Petty Cash Increase Request
d. June 2021 Budget Amendment & Adjustment
6. Consideration of In-Lieu of Insurance Payment
7. Consideration of Rental Agreement between Oshtemo Charter Township and SMBA
8. Document Update Project – Pickup from April Regular Meeting
9. Board Chair’s Report
10.Other Business
11.Adjournment
2021-06-24 SMBA Board Packet | Page 1 of 69
1
Southwest Michigan Building Authority
May 27, 2021
The SMBA regular meeting was held via Zoom. Chair Dusty Farmer called the meeting to order
at 8:30 a.m.
Board Roll Call:
A roll call was taken to comply with the provisions of MCL 15.263(2)(a)(ii) regarding remote
meeting attendance by board members.
Present:
Name Location Attending From
Dusty Farmer, Chair, Oshtemo Township Oshtemo Township, Kalamazoo County, MI
Carol DeHaan, Treasurer, Cooper Township Cooper Township, Kalamazoo County, MI
Larry Stehouwer, Citizen Member, Cooper Cooper Township, Kalamazoo County, MI
Cheri Bell, Oshtemo Township Oshtemo Township, Kalamazoo County, MI
Also present were Building Official Garrett Reitenour, Attorney Jim Porter, Administrative
Assistant Elvira Oropeza, and Board Secretary Kyle Gibson.
Absent:
Jeff Sorensen, Cooper Township
Citizen Comments on Non-Agenda Items
No public comment was provided.
Consent Agenda
– Meeting Minutes – April 22, 2021 Regular Meeting
– May 2021 Financial Reports
– May 2021 Budget Amendments and Adjustments
A motion was made by Carol DeHaan and supported by Larry Stehouwer to approve the
consent agenda as presented.
Opposed: None
The Chair declared that the motion was carried 4-0, with 1 absent.
Office Manager’s Report on Audit Progress and Updated Chart of Accounts Project
Office Manager Kyle Gibson shared that the SeberTans financial audit was progressing without
any perceived issues, and that he anticipated a SeberTans representative to be present at our
June meeting to present the audit findings.
Mr. Gibson also shared that we recently completed the last phase of the updated chart of
accounts project with BS&A, meaning that SMBA is now compliant with the State of Michigan’s
uniform chart of accounts ahead of the compliance deadline.
No board action was taken.
2021-06-24 SMBA Board Packet | Page 2 of 69
2
Memo Re: SeamlessDocs Proposal
Mr. Gibson presented the proposal documents contained in the board packet for the software
as a service offering from SeamlessDocs. Board discussion was held regarding the merits of the
software. Attorney Jim Porter shared that the e-signature functionality of the software would
be beneficial to the legal footing of the authority in the event that such a matter should arise.
Board consensus was that the software would be a worthwhile investment for the Authority.
A motion was made by Carol DeHaan and supported by Cheri Bell to authorize the office
manager to enter into a contract with SeamlessDocs using the advertised option to prorate the
contract through the end of 2021. Chair Farmer requested an update on the utility of the
software from the office manager at the end of the year.
Opposed: None
The Chair declared that the motion was carried 4-0, with 1 absent.
Consideration of Letter from Brad Meyers re: Deck Permit PB21-02-0291 at 10528 N
Riverview Dr. (Cooper Township)
Chair Farmer presented some background information for the information which was included
in the packet, including a letter from Mr. Meyers, a series of emails between Cooper Township
staff, Authority Staff, and himself, and a receipt for a bill of materials for the construction of his
deck. Building Official Garrett Reitenour provided additional background information to the
board. The board deliberated on the two primary issues raised by Mr. Meyers.
Regarding the matter of the permit fee calculation, board consensus was that the cost of
materials had no bearing on the construction valuation, and therefore adjustment of the permit
fee was not warranted. Furthermore, member Cheri Bell noted that the use of a standardized
construction valuation was the most equitable method of the application of fees to all
residents, and making an exception in this case would not be equitable to others.
Regarding the request to waive the $50 notice of violation fee, board consensus was that given
the fact that the fee is intended to recoup the Authority’s labor costs for posting the notice, and
given the fact that multiple notices of violations have been issued, and given the fact that Mr.
Meyers is only being billed for one of those notices (i.e. the Authority has already waived one
fee), waiver of the fee was not warranted.
Chair Farmer requested that Mr. Gibson reply to Mr. Meyers with the board’s decision,
providing a summary of the reasoning for the board’s denial of the request.
No board action was taken.
Board Chair’s Report
Chair Farmer had nothing to report.
Other Business
No other business was brought before the board.
Seeing and hearing no other business, and having exhausted the agenda, Chair Farmer declared
the meeting Adjourned at 9:15 a.m.
Next Regular Meeting – June 24th – 8:30 a.m.
2021-06-24 SMBA Board Packet | Page 3 of 69
Southwest Michigan Building Authority
7275 West Main Street
Kalamazoo MI 49009
269-585-4150
www.swmiba.org
Financial Reports for:
June 2021
As of 2021-06-21
1. Permit Revenue & Inspections Report
2. Accounts Payable Detailed Disbursement Report
3. Payroll Expense Report
4. Budget Snapshot
5. Bank Account Balance Report
2021-06-24 SMBA Board Packet | Page 4 of 69
SOUTHWEST MICHIGAN BUILDING AUTHORITY REVENUE / INSPECTIONS REPORT
Reporting Period: 05/21/2021 to 06/21/2021
Building Electrical Mechanical Plumbing Totals
Oshtemo 54 21 27 17 119
Revenue $16,367.00 $4,798.00 $3,846.00 $3,113.00 $28,124.00
YTD Oshtemo 251 146 193 100 690
YTD Revenue $155,715.00 $28,537.25 $32,982.00 $15,378.00 $232,612.25
Cooper 17 15 15 3 50
Revenue $4,059.00 $5,054.00 $3,115.00 $410.00 $12,638.00
YTD Cooper 113 68 72 32 285
YTD Revenue $31,092.50 $14,207.00 $13,016.00 $9,448.00 $67,763.50
Total Permits 71 36 42 20 169
Total Revenue $20,426.00 $9,852.00 $6,961.00 $3,523.00 $40,762.00
YTD Total Permits 364 214 265 132 975
YTD Total Revenue $186,807.50 $42,744.25 $45,998.00 $24,826.00 $300,375.75
Building Electrical Mechanical Plumbing Totals
Oshtemo Inpsections 103 39 44 33 219
Cooper Inspections 53 19 29 18 119
YTD Oshtemo Inspections 665 306 368 263 1602
YTD Cooper Inspections 354 123 128 84 689
Total Inspections 156 58 73 51 338
YTD Total Inspections 1019 429 496 347 2291
Permit Revenue
Inspections
0
100
200
300
400
500
600
$0.00
$10,000.00
$20,000.00
$30,000.00
$40,000.00
$50,000.00
$60,000.00
$70,000.00
$80,000.00
$90,000.00
2021 Revenue by Month 2020 Revenue by Month
2021 Inspections by Month 2020 Inspections by Month
Printed 6/21/2021 at 10:37 AM
I:\Board Packets\01 TEMPLATES\Revenue & Inspections Report
2021-06-24 SMBA Board Packet | Page 5 of 69
Due Date 1099 Net Amount
City/State/Zip Disc. Date Disc. % Sep CK Discount
Ref # Address CK Run Date PO Hold Gross Amount
Vendor Code Vendor name Post Date Invoice Bank Invoice Description
06/21/2021 10:40 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 1/10
User: kgibson
DB: Smba
POST DATES 05/21/2021 – 06/21/2021
BOTH JOURNALIZED AND UNJOURNALIZED
PAID
GL NUMBER DESCRIPTION AMOUNT
Paid
05/28/2021 Y 450.00
CASSOPOLIS MI, 49031 / / 0.0000 N 0.00
1630 21670 SHIAWASSEE 05/28/2021 N 450.00
ADAHLGREN ADAM J DAHLGREN 05/28/2021 2021-05-28.1 SWBA BUILDING INSPECTIONS
569-273-80100 Building Inspector 450.00
VENDOR TOTAL: 450.00
GL NUMBER DESCRIPTION AMOUNT
Paid
07/01/2021 N 1,760.60
SOUTH BEND IN, 46601 / / 0.0000 N 0.00
1642 460 STULL ST STE 200 06/09/2021 N 1,760.60
AUNALYTICS AUNALYTICS, INC 06/09/2021 29944049 SWBA CLOUD HOSTING SERVICES ACCT# C-001528
569-273-80900 IT / Infrastructure 1,760.60
VENDOR TOTAL: 1,760.60
GL NUMBER DESCRIPTION AMOUNT
Paid
06/28/2021 N 3,579.66
DETROIT MI, 48267 / / 0.0000 N 0.00
1649 PO BOX 674416 06/15/2021 N 3,579.66
BCBS BLUE CROSS BLUE SHIELD OF MICHIGAN 06/15/2021 007043238 SWBA HEALTH INSURANCE JUL 2021
569-273-71002 Health Insurance 3,579.66
VENDOR TOTAL: 3,579.66
2021-06-24 SMBA Board Packet | Page 6 of 69
Due Date 1099 Net Amount
City/State/Zip Disc. Date Disc. % Sep CK Discount
Ref # Address CK Run Date PO Hold Gross Amount
Vendor Code Vendor name Post Date Invoice Bank Invoice Description
06/21/2021 10:40 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 2/10
User: kgibson
DB: Smba
POST DATES 05/21/2021 – 06/21/2021
BOTH JOURNALIZED AND UNJOURNALIZED
PAID
GL NUMBER DESCRIPTION AMOUNT
Paid
05/21/2021 N 2,175.00
GRANDVILLE MI, 49418 / / 0.0000 N 0.00
1625 3097 PINEDALE DR SW 05/21/2021 N 2,175.00
CODE CODE SOURCE PC 05/21/2021 115221.1 SWBA JIFFY LUBE PLAN REVIEW JSMBA21-05-0096 569-273-80500 Plan Review 2,175.00
GL NUMBER DESCRIPTION AMOUNT
Paid
06/18/2021 N 3,136.00
GRANDVILLE MI, 49418 / / 0.0000 N 0.00
1653 3097 PINEDALE DR SW 06/18/2021 N 3,136.00
CODE CODE SOURCE PC 06/18/2021 115721.1 SWBA PLAN REVIEW FEES FOR JSMBA21-05-0214 10569-273-80500 BUILDING 1,386.00
569-273-80500 STRUCTURAL 350.00
569-273-80500 ENERGY 350.00
569-273-80500 ELECTRICAL 350.00
569-273-80500 MECHANICAL 350.00
569-273-80500 PLUMBING 350.00
3,136.00
VENDOR TOTAL: 5,311.00
GL NUMBER DESCRIPTION AMOUNT
Paid
06/21/2021 N 80.00
KALAMAZOO MI, 49009 06/21/2021 0.0000 N 0.00
1655 533 CLUB VIEW DR 06/21/2021 N 0.00
MISC DOMANI IMAD 06/21/2021 00031914 SWBA BD Payment Refund
569-272-49300 06. Gas/Wood Burning Appliances 30.00
569-272-49300 38. Inspection – Final 50.00
80.00
VENDOR TOTAL: 80.00
2021-06-24 SMBA Board Packet | Page 7 of 69
Due Date 1099 Net Amount
City/State/Zip Disc. Date Disc. % Sep CK Discount
Ref # Address CK Run Date PO Hold Gross Amount
Vendor Code Vendor name Post Date Invoice Bank Invoice Description
06/21/2021 10:40 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 3/10
User: kgibson
DB: Smba
POST DATES 05/21/2021 – 06/21/2021
BOTH JOURNALIZED AND UNJOURNALIZED
PAID
GL NUMBER DESCRIPTION AMOUNT
Paid
06/02/2021 N 50.00
KALAMAZOO MI, 49006 / / 0.0000 N 0.00
1637 927 PICCADILLY RD 06/02/2021 N 50.00
EOROPEZA ELVIRA OROPEZA 06/02/2021 2021-06-02.6 SWBA PHONE REIMBURSEMENT MAY 2021
569-273-85000 Telephone 50.00
VENDOR TOTAL: 50.00
GL NUMBER DESCRIPTION AMOUNT
Paid
06/02/2021 N 50.00
KALAMAZOO MI, 49009 / / 0.0000 N 0.00
1638 35063 23RD ST 06/02/2021 N 50.00
GREITENOUR GARRETT REITENOUR 06/02/2021 2021-06-02.7 SWBA PHONE REIMBURSEMENT MAY 2021
569-273-85000 Telephone 50.00
VENDOR TOTAL: 50.00
2021-06-24 SMBA Board Packet | Page 8 of 69
Due Date 1099 Net Amount
City/State/Zip Disc. Date Disc. % Sep CK Discount
Ref # Address CK Run Date PO Hold Gross Amount
Vendor Code Vendor name Post Date Invoice Bank Invoice Description
06/21/2021 10:40 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 4/10
User: kgibson
DB: Smba
POST DATES 05/21/2021 – 06/21/2021
BOTH JOURNALIZED AND UNJOURNALIZED
PAID
GL NUMBER DESCRIPTION AMOUNT
Paid
06/02/2021 Y 1,650.00
KALAMAZOO MI, 49009 / / 0.0000 N 0.00
1632 6323 WINDDRIFT AVE 06/02/2021 N 1,650.00
GHECKMAN GARYAIRE, LLC 06/02/2021 2021-06-02.1 SWBA PLUMBING / MECHANICAL INSPECTIONS
569-273-80400 Plumbing Inspector 600.00
569-273-80300 Mechanical Inspector 950.00
569-273-80200 Electrical Inspector 100.00
1,650.00
GL NUMBER DESCRIPTION AMOUNT
Paid
06/16/2021 Y 1,500.00
KALAMAZOO MI, 49009 / / 0.0000 N 0.00
1651 6323 WINDDRIFT AVE 06/16/2021 N 1,500.00
GHECKMAN GARYAIRE, LLC 06/16/2021 2021-06-16.2 SWBA PLUMBING / MECHANICAL INSPECTIONS
569-273-80400 Plumbing Inspector 900.00
569-273-80300 Mechanical Inspector 600.00
1,500.00
VENDOR TOTAL: 3,150.00
GL NUMBER DESCRIPTION AMOUNT
Paid
07/01/2021 N 615.00
KALAMAZOO MI, 49009 / / 0.0000 N 0.00
1631 5700 W MICHIGAN AVE 06/01/2021 N 615.00
HBA HBA OF WESTERN MICHIGAN 06/01/2021 5794 SWBA MEMBERSHIP DUES
569-273-71103 Education / Membership Dues 615.00
VENDOR TOTAL: 615.00
2021-06-24 SMBA Board Packet | Page 9 of 69
Due Date 1099 Net Amount
City/State/Zip Disc. Date Disc. % Sep CK Discount
Ref # Address CK Run Date PO Hold Gross Amount
Vendor Code Vendor name Post Date Invoice Bank Invoice Description
06/21/2021 10:40 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 5/10
User: kgibson
DB: Smba
POST DATES 05/21/2021 – 06/21/2021
BOTH JOURNALIZED AND UNJOURNALIZED
PAID
GL NUMBER DESCRIPTION AMOUNT
Paid
06/02/2021 N 50.00
KALAMAZOO MI, 49009 / / 0.0000 N 0.00
1635 537 WEALTHY ST 06/02/2021 N 50.00
KGIBSON KYLE GIBSON 06/02/2021 2021-06-02.4 SWBA PHONE REIMBURSEMENT MAY 2021
569-273-85000 Telephone 50.00
GL NUMBER DESCRIPTION AMOUNT
Paid
06/02/2021 N 14.34
KALAMAZOO MI, 49009 / / 0.0000 N 0.00
1636 537 WEALTHY ST 06/02/2021 N 14.34
KGIBSON KYLE GIBSON 06/02/2021 2021-06-02.5 SWBA MILEAGE REIMBURSEMENT MAY 2021
569-273-86100 Mileage 14.34
VENDOR TOTAL: 64.34
GL NUMBER DESCRIPTION AMOUNT
Paid
06/07/2021 N 1,302.46
KALAMAZOO MI, 49009-1332 / / 0.0000 N 0.00
1641 811 S DRAKE RD 06/07/2021 N 1,302.46
VISA MERCANTILE VISA 06/07/2021 2021-06-07.1 SWBA VISA BILL MAY 2021
569-273-86000 GAS 274.01
569-273-86000 WALTERS AUTO / OIL CHANGE 2021 COLORADO 59.96
569-273-86000 CAR WASH SUBSCRIPTION 29.99
569-273-71103 GARRETT COCM CONFERENCE LODGING 362.97
569-273-71103 GARRETT COCM CONFERENCE MEALS 58.00
569-273-86000 MI SOS TITLE TRANSFER FEE 2021 COLORADO 30.44
569-273-97100 3X LOGITECH C920 WEBCAMS 239.97
569-273-72800 STAMPS 150.00
569-273-72700 KYLE BUSINESS CARDS 28.61
569-273-72700 CONDEMNED BUILDING LOCKOUT KITS 68.51
1,302.46
VENDOR TOTAL: 1,302.46
2021-06-24 SMBA Board Packet | Page 10 of 69
Due Date 1099 Net Amount
City/State/Zip Disc. Date Disc. % Sep CK Discount
Ref # Address CK Run Date PO Hold Gross Amount
Vendor Code Vendor name Post Date Invoice Bank Invoice Description
06/21/2021 10:40 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 6/10
User: kgibson
DB: Smba
POST DATES 05/21/2021 – 06/21/2021
BOTH JOURNALIZED AND UNJOURNALIZED
PAID
GL NUMBER DESCRIPTION AMOUNT
Paid
06/02/2021 Y 800.00
COLDWATER MI, 49036 / / 0.0000 N 0.00
1633 426 SARAH LN 06/02/2021 N 800.00
TTHATCHER MP SERVICES LLC 06/02/2021 2021-06-02.2 SWBA MECHANICAL / PLUMBING INSPECTIONS
569-273-80300 Mechanical Inspector 350.00
569-273-80400 Plumbing Inspector 450.00
800.00
GL NUMBER DESCRIPTION AMOUNT
Paid
06/16/2021 Y 1,150.00
COLDWATER MI, 49036 / / 0.0000 N 0.00
1652 426 SARAH LN 06/16/2021 N 1,150.00
TTHATCHER MP SERVICES LLC 06/16/2021 2021-06-16.3 SWBA MECHANICAL / PLUMBING INSPECTIONS
569-273-80300 Mechanical Inspector 850.00
569-273-80400 Plumbing Inspector 300.00
1,150.00
VENDOR TOTAL: 1,950.00
GL NUMBER DESCRIPTION AMOUNT
Paid
06/06/2021 N 21.99
CINCINNATI OH, 45263-3301 / / 0.0000 N 0.00
1626 PO BOX 633301 05/25/2021 N 21.99
OFFICE DEP OFFICE DEPOT 05/25/2021 170487015001 SWBA OFFICE SUPPLIES
569-273-72700 “FINAL NOTICE” STAMP 21.99
VENDOR TOTAL: 21.99
2021-06-24 SMBA Board Packet | Page 11 of 69
Due Date 1099 Net Amount
City/State/Zip Disc. Date Disc. % Sep CK Discount
Ref # Address CK Run Date PO Hold Gross Amount
Vendor Code Vendor name Post Date Invoice Bank Invoice Description
06/21/2021 10:40 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 7/10
User: kgibson
DB: Smba
POST DATES 05/21/2021 – 06/21/2021
BOTH JOURNALIZED AND UNJOURNALIZED
PAID
GL NUMBER DESCRIPTION AMOUNT
Paid
05/25/2021 Y 250.00
VAN BUREN TWP MI, 48111-1677 / / 0.0000 N 0.00
1627 9593 REVERE DR 05/25/2021 N 250.00
REDMOND REDMOND ENGINEERING & DESIGN 05/25/2021 21-007 SWBA FS REVIEW BETHANY KITCHEN 6350 W KL AVE 569-273-80500 Plan Review 250.00
VENDOR TOTAL: 250.00
GL NUMBER DESCRIPTION AMOUNT
Paid
05/26/2021 N 133.53
CHICAGO IL, 60680-2815 / / 0.0000 N 0.00
1628 PO BOX 802815 05/25/2021 N 133.53
RICOH RICOH 05/25/2021 5062026190 SWBA COPIER
569-273-95600 Equipment / Maintenance 133.53
VENDOR TOTAL: 133.53
GL NUMBER DESCRIPTION AMOUNT
Paid
06/07/2021 N 170.00
KALAMAZOO MI, 49002 / / 0.0000 N 0.00
1640 246 E KILGORE 06/07/2021 N 170.00
SIEGFRIED SIEGFRIED CRANDALL P.C. 06/07/2021 106509 SWBA ACCOUNTING SERVICES MAY 2021
569-273-80700 Accounting / Audit Fees 170.00
VENDOR TOTAL: 170.00
GL NUMBER DESCRIPTION AMOUNT
Paid
07/09/2021 N 67.70
CAROL STREAM IL, 60197 / / 0.0000 N 0.00
1645 PO BOX 4181 06/10/2021 N 67.70
SPRINT SPRINT 06/10/2021 144563305-032 SWBA MOBILE HOTSPOT USAGE MAY 2021
569-273-80900 IT / Infrastructure 67.70
VENDOR TOTAL: 67.70
2021-06-24 SMBA Board Packet | Page 12 of 69
Due Date 1099 Net Amount
City/State/Zip Disc. Date Disc. % Sep CK Discount
Ref # Address CK Run Date PO Hold Gross Amount
Vendor Code Vendor name Post Date Invoice Bank Invoice Description
06/21/2021 10:40 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 8/10
User: kgibson
DB: Smba
POST DATES 05/21/2021 – 06/21/2021
BOTH JOURNALIZED AND UNJOURNALIZED
PAID
GL NUMBER DESCRIPTION AMOUNT
Paid
06/15/2021 N 55.00
Plainwell MI, 49080 06/15/2021 0.0000 N 0.00
1648 361 12 Street 06/15/2021 N 0.00
MISC Steensma Lawn And Power 06/15/2021 00033152 SWBA BD Payment Refund
569-272-49300 07. Gas Piping (Each Opening) 5.00
569-272-62703 35. Inspection – Final 50.00
55.00
VENDOR TOTAL: 55.00
GL NUMBER DESCRIPTION AMOUNT
Paid
07/01/2021 N 147.04
PHILADELPHIA PA, 19170 / / 0.0000 N 0.00
1647 PO BOX 7247 -0381 06/15/2021 N 147.04
SUN LIFE SUN LIFE FINANCIAL 06/15/2021 247757 SWBA LIFE INSURANCE JUL 2021
569-273-71003 Disability / Life Insurance 147.04
VENDOR TOTAL: 147.04
GL NUMBER DESCRIPTION AMOUNT
Paid
06/28/2021 N 378.20
CHICAGO IL, 60677-8000 / / 0.0000 N 0.00
1643 8020 SOLUTIONS CENTER 06/10/2021 N 378.20
TELNET TELNET WORLDWIDE 06/10/2021 222816 SWBA PHONE MAY 2021
569-273-85000 Telephone 378.20
VENDOR TOTAL: 378.20
2021-06-24 SMBA Board Packet | Page 13 of 69
Due Date 1099 Net Amount
City/State/Zip Disc. Date Disc. % Sep CK Discount
Ref # Address CK Run Date PO Hold Gross Amount
Vendor Code Vendor name Post Date Invoice Bank Invoice Description
06/21/2021 10:40 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 9/10
User: kgibson
DB: Smba
POST DATES 05/21/2021 – 06/21/2021
BOTH JOURNALIZED AND UNJOURNALIZED
PAID
GL NUMBER DESCRIPTION AMOUNT
Paid
05/31/2021 N 46.99
CHICAGO IL, 60680-9488 / / 0.0000 N 0.00
1629 P.O. BOX 809488 05/25/2021 N 46.99
UPS UPS 05/25/2021 000076R70Y211 SWBA SHIPPING FOR MULTIPLE PROJECTS
569-273-72800 PR JSMBA21-05-0305 BIGGBY 26.06
569-273-72800 PR JSMBA21-05-0306 CRUMBL COOKIE 13.48
569-273-72800 PICKUP REQUEST 7.45
46.99
GL NUMBER DESCRIPTION AMOUNT
Paid
06/14/2021 N 14.85
CHICAGO IL, 60680-9488 / / 0.0000 N 0.00
1639 P.O. BOX 809488 06/07/2021 N 14.85
UPS UPS 06/07/2021 000076R70Y231 SWBA SHIPPING PE21-05-0148 APPROVED PLANS TO 569-273-72800 Postage / Shipping 14.85
GL NUMBER DESCRIPTION AMOUNT
Paid
06/21/2021 N 17.90
CHICAGO IL, 60680-9488 / / 0.0000 N 0.00
1646 P.O. BOX 809488 06/14/2021 N 17.90
UPS UPS 06/14/2021 000076R70Y241 SWBA SHIPPING FOR JSMBA21-05-0336 9132 W KL A569-273-72800 Postage / Shipping 17.90
GL NUMBER DESCRIPTION AMOUNT
Paid
06/21/2021 N 40.28
CHICAGO IL, 60680-9488 / / 0.0000 N 0.00
1654 P.O. BOX 809488 06/21/2021 N 40.28
UPS UPS 06/21/2021 000076R70Y251 SWBA SHIPPING FOR MULTIPLE PLAN REVIEWS
569-273-72800 FS REVIEW 6585 W KL AVE PM21-05-0265 14.82
569-273-72800 CODE SOURCE JSMBA21-05-0344 5925 VENTURE 17.99
569-273-72800 PICKUP REQUEST 7.47
40.28
VENDOR TOTAL: 120.02
2021-06-24 SMBA Board Packet | Page 14 of 69
Due Date 1099 Net Amount
City/State/Zip Disc. Date Disc. % Sep CK Discount
Ref # Address CK Run Date PO Hold Gross Amount
Vendor Code Vendor name Post Date Invoice Bank Invoice Description
06/21/2021 10:40 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 10/10
User: kgibson
DB: Smba
POST DATES 05/21/2021 – 06/21/2021
BOTH JOURNALIZED AND UNJOURNALIZED
PAID
GL NUMBER DESCRIPTION AMOUNT
Paid
07/09/2021 N 192.50
COMSTOCK MI, 49041-0378 / / 0.0000 N 0.00
1644 PO 378 06/10/2021 N 192.50
WMBF WEST MICHIGAN BUSINESS FORMS 06/10/2021 00020473 SWBA A/P CHECKS 1751 TO 2300
569-273-72700 Supplies 192.50
VENDOR TOTAL: 192.50
GL NUMBER DESCRIPTION AMOUNT
Paid
06/02/2021 Y 850.00
MATTAWAN MI, 49071 / / 0.0000 N 0.00
1634 38159 24TH ST 06/02/2021 N 850.00
WWILCOX WILLIAM WILCOX 06/02/2021 2021-06-02.3 SWBA ELECTRICAL INSPECTIONS
569-273-80200 Electrical Inspector 850.00
GL NUMBER DESCRIPTION AMOUNT
Paid
06/16/2021 Y 1,100.00
MATTAWAN MI, 49071 / / 0.0000 N 0.00
1650 38159 24TH ST 06/16/2021 N 1,100.00
WWILCOX WILLIAM WILCOX 06/16/2021 2021-06-16.1 SWBA ELECTRICAL INSPECTIONS
569-273-80200 Electrical Inspector 1,100.00
VENDOR TOTAL: 1,950.00
TOTAL – ALL VENDORS: 21,849.04
2021-06-24 SMBA Board Packet | Page 15 of 69
Fund Item Amount
06/21/2021 10:42 AM Page 1 of 1
For Journal Entries with Post Dates Between 05/21/2021 and 06/21/2021
Journal Totals By Fund Report
Total Payroll: 14,536.77
Net Payment: 8,955.93
Gross Payment: 12,599.67
569
Pay Codes Amount
ADJ/CORR 77.10
HOLIDAY 228.04
HOURLY 3,758.71
IN LIEU OF 69.76
PTO 862.07
SALARY 3,960.25
Pay Code Totals: 8,955.93
Deductions Amount
FITW 826.69
HSA EE 360.00
MEDICARE_EE 177.47
PENSION_EE_PRE 113.99
PENSION_EE_ROTH 921.50
SITW 485.24
SOCSEC_EE 758.85
Deduction Totals: 3,643.74
Expenses Amount
MEDICARE_ER 177.47
PENSION_ER 500.39
PENSION_ER_MTCH 500.39
SOCSEC_ER 758.85
Expense Totals: 1,937.10
2021-06-24 SMBA Board Packet | Page 16 of 69
06/21/2021 10:44 AM REVENUE AND EXPENDITURE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 1/2
User: kgibson
DB: Smba
PERIOD ENDING 06/30/2021
% Fiscal Year Completed: 49.59
% BDGT
USED
AVAILABLE
BALANCE
ACTIVITY FOR
MONTH
06/30/2021
YTD BALANCE
06/30/2021
2021
GL NUMBER DESCRIPTION AMENDED BUDGET
Fund 569 – Building Authority
Revenues
Dept 000 – A&L, Balance Sheet Accounts
569-000-99999 Carryover 0.00 0.00 0.00 0.00 0.00
Total Dept 000 – A&L, Balance Sheet Accounts 0.00 0.00 0.00 0.00 0.00
Dept 272 – Revenue Accounts
569-272-49100 Building Permits 185,000.00 127,227.70 13,334.00 57,772.30 68.77
569-272-49200 Electrical Permits 40,000.00 24,465.00 2,313.00 15,535.00 61.16
569-272-49300 Mechanical Permits 35,000.00 26,674.00 2,095.00 8,326.00 76.21
569-272-49400 Plumbing Permits 32,000.00 11,946.00 1,364.00 20,054.00 37.33
569-272-60701 FOIA Fees 100.00 92.55 7.15 7.45 92.55
569-272-62600 Building Services to Others 0.00 0.00 0.00 0.00 0.00
569-272-62701 Building Inspections 95,000.00 42,760.00 2,800.00 52,240.00 45.01
569-272-62702 Electrical Inspections 35,000.00 18,195.00 1,900.00 16,805.00 51.99
569-272-62703 Mechanical Inspections 45,000.00 21,540.00 1,600.00 23,460.00 47.87
569-272-62704 Plumbing Inspections 28,000.00 13,745.00 1,550.00 14,255.00 49.09
569-272-63000 Plan Review 45,000.00 38,782.00 2,650.00 6,218.00 86.18
569-272-66300 Bond Forfeitures and Bond Costs 0.00 0.00 0.00 0.00 0.00
569-272-66500 Interest on Investments 2,000.00 393.36 0.00 1,606.64 19.67
569-272-67300 Gain/Loss on Sale of Assets 0.00 0.00 0.00 0.00 0.00
569-272-67500 Miscellaneous 500.00 2,954.25 0.00 (2,454.25) 590.85
Total Dept 272 – Revenue Accounts 542,600.00 328,774.86 29,613.15 213,825.14 60.59
TOTAL REVENUES 542,600.00 328,774.86 29,613.15 213,825.14 60.59
Expenditures
Dept 273 – Building Authority Expense Activity
569-273-70200 Salaries 162,508.00 74,021.50 12,509.67 88,486.50 45.55
569-273-70203 Building Board of Appeals 0.00 0.00 0.00 0.00 0.00
569-273-70204 Board Member At Large Stipend 390.00 90.00 0.00 300.00 23.08
569-273-71002 Health Insurance 43,000.00 25,012.97 3,579.66 17,987.03 58.17
569-273-71003 Disability / Life Insurance 1,735.00 1,117.04 147.04 617.96 64.38
569-273-71004 Work Comp Insurance 2,500.00 2,140.00 0.00 360.00 85.60
569-273-71005 Payroll Taxes – FICA 12,432.00 5,548.57 936.32 6,883.43 44.63
569-273-71006 HSA 7,300.00 7,072.00 0.00 228.00 96.88
569-273-71009 Pension Plan 13,000.00 6,954.93 1,000.78 6,045.07 53.50
569-273-71101 In Lieu of Insurance 1,170.00 540.00 90.00 630.00 46.15
569-273-71102 Clothing Allowance 1,500.00 0.00 0.00 1,500.00 0.00
569-273-71103 Education / Membership Dues 4,000.00 2,238.82 1,035.97 1,761.18 55.97
569-273-72700 Supplies 4,500.00 2,327.17 289.62 2,172.83 51.71
569-273-72800 Postage / Shipping 2,500.00 1,556.50 223.03 943.50 62.26
569-273-72900 General Insurance 9,000.00 8,570.00 0.00 430.00 95.22
569-273-80100 Building Inspector 10,000.00 2,400.00 0.00 7,600.00 24.00
569-273-80200 Electrical Inspector 35,000.00 20,150.00 2,050.00 14,850.00 57.57
569-273-80300 Mechanical Inspector 45,000.00 21,500.00 2,750.00 23,500.00 47.78
569-273-80400 Plumbing Inspector 28,000.00 15,300.00 2,250.00 12,700.00 54.64
569-273-80500 Plan Review 40,000.00 32,504.50 3,136.00 7,495.50 81.26
569-273-80600 Consultants 0.00 0.00 0.00 0.00 0.00
569-273-80700 Accounting / Audit Fees 13,000.00 4,563.25 170.00 8,436.75 35.10
569-273-80800 Legal Fees 5,000.00 1,545.00 0.00 3,455.00 30.90
569-273-80900 IT / Infrastructure 22,500.00 11,398.34 1,828.30 11,101.66 50.66
569-273-80901 IT / Software 12,000.00 2,189.88 0.00 9,810.12 18.25
2021-06-24 SMBA Board Packet | Page 17 of 69
06/21/2021 10:44 AM REVENUE AND EXPENDITURE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 2/2
User: kgibson
DB: Smba
PERIOD ENDING 06/30/2021
% Fiscal Year Completed: 49.59
% BDGT
USED
AVAILABLE
BALANCE
ACTIVITY FOR
MONTH
06/30/2021
YTD BALANCE
06/30/2021
2021
GL NUMBER DESCRIPTION AMENDED BUDGET
Fund 569 – Building Authority
Expenditures
569-273-80902 IT / Support 500.00 540.00 0.00 (40.00) 108.00
569-273-85000 Telephone 6,300.00 3,163.66 528.20 3,136.34 50.22
569-273-86000 Vehicle Gas / Maintenance 3,000.00 1,253.19 394.40 1,746.81 41.77
569-273-86100 Mileage 500.00 74.82 14.34 425.18 14.96
569-273-94000 Facility Rent 21,000.00 21,000.00 0.00 0.00 100.00
569-273-95500 Miscellaneous 0.00 13.00 13.00 (13.00) 100.00
569-273-95600 Equipment / Maintenance 850.00 709.38 0.00 140.62 83.46
569-273-96500 Bank Service Charges 500.00 280.65 0.00 219.35 56.13
569-273-96800 Depreciation Expense 0.00 0.00 0.00 0.00 0.00
569-273-97100 Capital Outlay 22,000.00 15,775.37 239.97 6,224.63 71.71
569-273-97200 Capital Outlay – Vehicle 0.00 0.00 0.00 0.00 0.00
569-273-99300 Interest/Penalty IRS/State Withholdings 0.00 0.00 0.00 0.00 0.00
Total Dept 273 – Building Authority Expense Activity 530,685.00 291,550.54 33,186.30 239,134.46 54.94
TOTAL EXPENDITURES 530,685.00 291,550.54 33,186.30 239,134.46 54.94
NET OF REVENUES & EXPENDITURES 11,915.00 37,224.32 (3,573.15) (25,309.32) 312.42
TOTAL EXPENDITURES 530,685.00 291,550.54 33,186.30 239,134.46 54.94
TOTAL REVENUES 542,600.00 328,774.86 29,613.15 213,825.14 60.59
Fund 569 – Building Authority:
NET OF REVENUES & EXPENDITURES 11,915.00 37,224.32 (3,573.15) (25,309.32) 312.42
TOTAL EXPENDITURES – ALL FUNDS 530,685.00 291,550.54 33,186.30 239,134.46 54.94
TOTAL REVENUES – ALL FUNDS 542,600.00 328,774.86 29,613.15 213,825.14 60.59
2021-06-24 SMBA Board Packet | Page 18 of 69
SOUTHWEST MICHIGAN BUILDING AUTHORITY BANK BALANCE REPORT
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020 $363,688.08 $374,395.69 $367,084.01 $364,749.52 $366,304.26 $376,755.31 $410,190.86 $363,684.45 $454,864.86 $482,472.44 $521,651.20 $ 513,525.33
2021 $503,222.53 $523,735.52 $538,097.75 $534,031.68 $547,884.78 $585,009.74
$0.00
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
$600,000.00
$700,000.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bank Account Balance by Month
2020 2021
Printed 6/21/2021 at 10:37 AM
I:\Board Packets\01 TEMPLATES\Revenue & Inspections Report
2021-06-24 SMBA Board Packet | Page 19 of 69
Southwest Michigan Building Authority
7275 West Main Street
Kalamazoo MI 49009
269-585-4150
www.swmiba.org
MEMORANDUM
To: SMBA Board
From: Office Manager
Date: 6/14/2021
Re: Request to Increase Petty Cash
A request is made to increase the amount of “Petty Cash” used to make change for customers making cash
payments from the current $135 to $250. The purpose of the request is to reduce the number of bank trips
required to break larger bills and replenish the change fund. While these funds are classified as petty cash, it
is important to note that the funds are ONLY used to make change, and are not actually used as petty cash in
the traditional sense.
2021-06-24 SMBA Board Packet | Page 20 of 69
x Amendment
x Adjustment
GL # Description Type Current Budget YTD Balance Amended
Budget
Amendment
Amount
569-272-60701 FOIA Fees Revenue $ 100.00 $ 92.55 $ 150.00 $ 50.00
569-272-67500 Miscellaneous Revenue $ 500.00 $ 2,954.25 $ 3,000.00 $ 2,500.00
$ –
$ –
$ –
569-273-95500 Miscellaneous Expenditure $ – $ 13.00 $ 13.00 $ 13.00
569-273-80902 IT Support / Website Host Expenditure $ 500.00 $ 540.00 $ 600.00 $ 100.00
569-273-95600 Equipment / Maintenance Expenditure $ 850.00 $ 709.38 $ 2,000.00 $ 1,150.00
$ –
$ –
$ –
$ –
$ –
$ –
$ –
GL # Description Type
6/21/2021
Budget Amendment / Adjustment Request Form
Southwest Michigan Building Authority
Request Type: Requested By:
Kyle Gibson, Office Manager
Budget Amendment Request
Revenues ( $2,550.00 )
DR Amount CR Amount
Expenditures ( $1,263.00 )
Proivde for additional expected revenue.
Provide for additional expected expenses.
Budget Adjustment Request
Totals $ – $ –
Describe Reason for Request:
I:\Board Packets\2021\2021-06-24\JUN 2021 Budget Adjustment or Amendment Request Form 1 of 1
2021-06-24 SMBA Board Packet | Page 21 of 69
Southwest Michigan Building Authority
7275 West Main Street
Kalamazoo MI 49009
269-585-4150
www.swmiba.org
MEMORANDUM
To: SMBA Board
From: Office Manager
Date: 6/21/2021
Re: Request For Consideration of In-Lieu of Insurance Payment
Background
U.S. Code § 125 (Cafeteria Plans) provides the basis for the Authority’s Premium Only Plan (POP) Cafeteria
Plan. Under the Authority’s Cafeteria Plan, eligible employees have the option to pay for benefits offered
under the plan with pre-tax dollars, or with after-tax contributions on a payroll-reduction basis. The plan allows
for the Authority to make contributions to employee’s HSA accounts, and allows employees to contribute to
their HSA accounts with pre-tax dollars. U.S. Code § 125(d)(1)(B) requires that participants may choose
among 2 or more benefits consisting of cash and qualified benefits. The Authority has established a cash “inlieu of insurance” benefit in the amount of $45 per pay period for employees who choose the cash benefit
instead of the qualified employer-provided health insurance.
In January of this year, the board authorized payments of $3,500 per employee as employer HSA
contributions. The amount was decided upon because it was equal to the single-member deductible for the
Authority’s plan. These employer contribution funds constitute a considerable portion of the total benefit
provided to SMBA employees who participate in the healthcare program.
A summary plan description and a document detailing what a Cafeteria Plan is in more detail (both provided by
BASIC, the company that administers the Cafeteria Plan. Also included is the rate table for Blue Cross Blue
Shield, which shows the incremental premium cost based on the age of the participant.
Request
A request is made to increase the bi-weekly in-lieu of insurance payment from $45 to $100 effective on the
next regular payroll (6/30). Should the board approve the primary request, a secondary request is made to
authorize a budget amendment in the amount of $770 for GL number 569-273-71101. The current budget for
the GL is $1,170; the amended amount would be $1,940.
Impact
Currently, two of SMBA’s three eligible employees participate in the healthcare program. The total monthly
premium cost for the insurance is $3,579.66 (approximately $43,000 annually). In addition to the premium
costs, the Authority also makes employer HSA contributions of $3,500 per employee ($7,000 annually).
Therefore, the total cost for the healthcare program is approximately $50,000 annually.
In comparison, the in-lieu of insurance program currently costs the Authority $1,170 annually. The proposed
increase would result in annual costs of $2,160.
Accordingly, it is advantageous to the Authority to make the in-lieu option more competitive because the
incremental costs of additional employees participating in the healthcare program are greater than the cost of
increasing the in-lieu payment.
2021-06-24 SMBA Board Packet | Page 22 of 69
\-
WHAT IS A CAFETERIA PLAN?
By
Larry Grudzien
Attorney at Law
1
\-.
2021-06-24 SMBA Board Packet | Page 23 of 69
Code Section 125 makes it possible for employers to offer their employees a
choice between cash and a variety of nontaxable benefits without the application
of the constructive receipt rules with respect to income recognition by the
employees.
See, Code $125(a), Reg. $1.125-1, Q&A-‘l, Reg. 51.125-2, Q&A-2
Plan Requirements
A cafeteria plan is a written benefit plan maintained by an employer for the
benefit of its employees. The plan must allow employees to choose between two
or more benefits consisting of cash (or a taxable benefit that is treated as cash)
and certain “qualified benefits.”
See, Code 5125(d), Reg. S1 .125-1, Q&A-2, Reg. 51 .125-2, Q&A-3.
The written plan must include the following provisions:
The rules governing which employees are eligible to participate in the
plan.
The procedures for making elections under the plan, including when
elections may be made, the rules governing irrevocability of elections and
the periods for which elections are effective.
The manner in which employer contributions may be made such as by
salary reduction agreement between the employer and employee, by nonelective employer contributions or by both.
The maximum amount of employer contributions available to any
participant. To meet this requirement, the plan must describe the
maximum amount of elective contributions available to any employee
either by stating the maximum dollar amount or maximum percentage of
compensation that may be contributed as elective contributions or by
stating the method for determining the maximum amount or percentage of
elective contributions that an employee may make.
The plan year.
See, Reg. 51.125-1, O&A-3, 51.125-2, Q&A-3.
2
lntroduction
. A specific description of each benefit available under the plan and the
period of coverage.
2021-06-24 SMBA Board Packet | Page 24 of 69
Employee
The term “employee” includes both present and former employees, but not selfemployed individuals described in Code Section 401(c). Thus, sole proprietors,
partners in a partnership and 2o/o or greater shareholders in an S-corporation are
ineligible to participate in a cafeteria plan. ln addition, the plan may not be
established primarily for the benefit of former employees.
A spouse or other beneficiary of a plan participant may receive benefits under a
cafeteria plan; however, only the plan participant may make the election of
benefits under the plan.
See, Code S125(dX1XA), Reg. $1.125-1, Q&A4.
Deferred Compensation
See, Code 5125(dX2), Reg. $1.125-1, Q&A-7, Reg. S1.125-2, O&A-5.
An employer may revise its cafeteria plan to provide for a grace period of up to
2-112 months after the end of the plan year to reimburse a participant for
expenses incurred during the previous plan year. This provision must be
available to all participants. The employer must amend its cafeteria plan before
the end ofthe plan year to provide for this grace period.
See, IRS Notice 200542
Qualified Benefits
Employer-provided accident or health coverage under Code Sections 105
and ‘106. This includes health, medical, hospitalization coverage, disability
insurance and coverage under an accidental death and dismemberment
policy. lt also includes reimbursement for health care expenses under a
health flexible spending arrangement (FSA). lndividually owned accident
or health insurance policies may be offered under a cafeteria plan
provided that the employer requires an accounting to insure that the health
insurance is in force and is being paid by the employees.
A cafeteria plan may not offer any benefit which defers the receipt of
compensation (other than a section 401(k) plan). Therefore, the plan may not
permit participants to use one plan yea/s contributions to purchase benefits in a
subsequent plan year, or to carryover unused benefits from year to year.
A qualified benefit is a benefit that does not defer compensation and which is
excludable from an employee’s gross income under a specific provision of the
Code. Qualified benefits include the following:
2021-06-24 SMBA Board Packet | Page 25 of 69
See, Rev. Rul. 61-146, 1961-2 C.B. 25
Moreover, the plan may not reimburse the health insurance premiums
under a health FSA.
Employer-provided group-term life insurance coverage which is either
excludable from income under Code Section 79 or includible in income
solely because the benefit exceeds the dollar limit of Code Section 79
($50,000). Only the first $50,000 of coverage is nontaxable. Dependent
group term life insurance may not be included in a cafeteria plan if the
benefit is eligible for exclusion under Code Section 132.
See, Notice 89-1 10, 1989-2 C.8.447
Employer-provided dependent care assistance under Code section 129.
Employer-provided adoption assistance under Code section 137.
by
in
a
A 401(k) plan or purchase of retiree group term life insurance
participants employed by certain educational institutions described
Code Section 1 70(bXlXAX|i).
The following benefits are not qualified benefits and not permitted in a cafeteria
plan:
o Contributions to medical savings accounts under Code Section 106(b);
. Qualified scholarships under Code Section 1 17;
o Educational assistance programs under Code Section 127;
. Certain fringe benefits under Code Section 132; and
. Qualified longterm care insurance under Code Section 77028.
See, Code 5125(f), Reg. $1.125-1, Q&A-S, Reg. S1.125-2, Q&A4.
Cash Requirement
A cafeteria plan must offer a cash option (this is usually in the form of a salary
reduction agreement). Cash benefits include not only cash, but also benefits
which may be purchased with aftertax dollars, or the value of which is generally
treated as taxable compensation to the employee.
See, Code S125(dXlXB), Reg. $1.125-1, Q&A-S, Reg. Reg. $1.125-2, O&A-(b)
and (c), and A&A-s(c).
Qualified scholarships under Code Section 117, and employer provided fringe
benefits under Code Section ‘132 may not be included in a cafeteria plan even if
purchased with aftertax contributions.
4
2021-06-24 SMBA Board Packet | Page 26 of 69
See, Reg. S1.125-2, O&A-4(d).
Salary Reduction
Employer contributions to the cafeteria plan are usually made pursuant to salary
reduction agreements between the employer and the employee in which the
employee agrees to contribute a portion of his or her salary on a pre-tax basis to
pay for the qualified benefits. Salary reduction contributions are not actually or
constructively received by the participant. Therefore, those contributions are not
considered wages for federal income tax purposes. ln addition, those sums
generally are not subject to FICA and FUTA. A salary reduction agreement is
sufficient to satisfy the “cash” requirement of a cafeteria plan. Thus, a cafeteria
plan need only offer a choice between one qualified benefit and salary reduction.
See, Code g$3121(a)(5)(G) and 3306(b)(5XG), 51.125-1, Reg. Q&A-6, 14 and 16
Election Requirements
For participants to avoid constructive receipt of taxable benefits, the plan must
offer an election, and participants must elect the amounts and types of benefits to
be received prior to the beginning of the plan year. lf salary reduction is permitted
to pay for the benefits chosen, the salary reduction amount must be elected prior
to the beginning of the plan year. Generally, the plan may not permit participants
to elect their benefil coverage, benefit reimbursement, or salary reduction for less
than 12 months. However, this does not prohibit new employees from electing
benefits for a part of the cafeteria plan year.
See, Code 5125(dX2), Reg. 91.125-1 , Q&A-6, B, and 15, Reg. 51.125-2, Q&A,6.
Revocation of Elections
After a participant has elected and begun to receive benefits under the plan, the
plan may not allow the participant to revoke the benefit election during the period
of coverage unless the revocation is due to one of the following events:
Health lnsurance Portability and Accountability Act of 1996 (HIPAA)
special enrollment rights.
The Health lnsurance Portability and Accountability Act of 1996 (HIPAA)
requires group health plans to permit individuals to be enrolled for
coverage following the loss of other health coverage, or if a person
becomes the spouse or dependent of an employee through birth,
marriage, adoption or placement for adoption. lf a participant has a right to
enroll in an employer’s group health plan or to add coverage for a family
member under HIPAA, the participant can revoke an existing election and
make a new election under the cafeteria plan that conforms with the
special enrollment right.
5
2021-06-24 SMBA Board Packet | Page 27 of 69
See, Code 51.125-4T(b), Code $9801 (f), Res. S 54.9801-6T.
Changes in status.
Under the change in status rules, a plan may permit participants to revoke
an election and make a new election with respect to accident and health
coverage, dependent care expenses, group term life insurance, or
adoption assistance if,
o a change in status occurs and
o the election change is “consistent” with the change in status.
o Changes in legal marital status;
o Changes in number of dependents;
o Changes in employment status;
o Cases where the dependent satisfies or ceases to satisfy the
requirements for eligibility;
o Changes in residence, and
o For purposes of adoption assistance, the commencement or
termination of an adoption proceeding.
An election change is “consistent” if that change is “on account of’and
“corresponds with” a change in status event that affects eligibility for
coverage. ln the case of accident or health coverage (such as a health
FSA), if a change in status results in an increase or decrease in the
number of an employee’s family members or dependents who may benefit
from coverage under the plan, the eligibility requirement is satisfied.
Election changes must be on a prospective basis only.
See, Reg. $1.125a(c).
Judgment, decree or order.
A plan may permit a participant to revoke and change an election if a
judgment, decree or order resulting from a divorce, legal separation,
annulment or change in legal custody requires accident and health
coverage for a participant’s child, and that coverage is actually obtained.
6
See, Reg. S1.125-4(d).
Change in status events are:
2021-06-24 SMBA Board Packet | Page 28 of 69
Entitlement to Medicare or Medicaid.
A plan may permit a participant to revoke an election for accident or health
coverage if the participant, spouse or dependent becomes entitled to
Medicare or Medicaid.
See, Reg. $1.125-a(e)
Changes in contributions to 401 (k) plans.
A plan may permit an employee to modify or revoke elections in
accordance with sections Code Sections 401(k) and 401(m) and the
regulations there under.
See, Reg. 51.1254(h).
Significant cost or coverage changes. (These rules do not apply to health
flexible spending arrangements.).
Cost changes: If the costs under a health plan increases or
decreases during the plan year, the plan may automatically
increase or decrease all affected participant contributions for such
health plan. ln the alternative, if the cost significantly increases or
decreases, the plan may permit participants to either make a
corresponding change in their premium payments, commence
participation (in the case of a premium decrease) or revoke their
elections and, in lieu thereof, to receive coverage under another
health plan with similar coverage. lf cost significantly increases and
there is no similar coverage, participants may drop coverage.
o
o Coverage changes: lf the coverage provided ceases or is
significantly curtailed, the plan may permit participants to revoke
their elections of the health plan and, in lieu thereof, to receive
prospective coverage under another health plan with similar
coverage. A significant curtailment is defined as an overall
reduction in coverage provided under the plan so as to constitute
reduced coverage generally. lf a significant curtailment amounts to
a loss of coverage and no similar coverage is available, participants
may drop coverage. A loss of coverage means a complete loss of
coverage and includes the elimination of a benefits package option,
an HMO ceasing to be available in the area where the individual
resides, or the individual losing all coverage under the option by
reason of an overall lifetime or annual limitation. ln addition, the
cafeteria plan has discretion to treat other similar events as a loss
of coverage.
1
2021-06-24 SMBA Board Packet | Page 29 of 69
See, Reg. S1.125-4(f).
Family and Medical Leave Act (FMLA).
A plan must allow a participant who takes unpaid FMLA leave to revoke
an existing election for health plan coverage for the remainder of the
coverage period (notwithstanding any contrary rules stated in the cafeteria
plan document). A participant who takes FMLA leave may revoke
elections for non-health benefits only under the same rules that apply to
participants taking non- FMLA leave. ln either case, the participant may
choose to be reinstated in the plan upon return from FMLA leave on the
same terms and conditions as prior to taking FMLA leave.
See, Reg. 51.125-3, Q&A-l and Q&A-7.
Flexible Spending Arrangements (FSA)
An FSA is an arrangement that provides coverage under which specified,
incurred expenses may be reimbursed and the maximum amount of
reimbursement available to a participant for a period of coverage is usually equal
to the participant’s contributions. Like all qualified beneflts, FSA coverage must
meet all of the rules under the relevant Code section (e.9., Code Sections 105,
1 06 and 129) in order to be excludable from gross income. The two most
common types of FSAs are health FSAs and dependent care assistance FSAs.
See, Reg. 51 .125-1, Q&A-16, 51.125-2, a&A-7(c)
A health FSA must qualify as an accident or health plan (i.e., it must
exhibit the risk-shifting and risk distribution characteristics of insurance).
Thus, a health FSA must provide “uniform coverage” throughout the
coverage period. This means that the maximum amount of reimbursement
(i.e., the annual election) must be available to the participant at all times.
For example, if an employee elects salary reduction of $100 per month for
a health FSA, the employee’s annual election of $1200 must be available
to the employee for reimbursement at any time during the plan year
(properly reduced for prior reimbursements) without regard to the
employee’s actual contributions to the plan at that time. The plan may not
accelerate the payment schedule based upon the claims that the
employee has made.
Reimbursements under a health FSA must be paid specifically to
reimburse the participant for medical expenses not covered by health
insurance. A reimbursement is not paid specifically to reimburse the
participant for medical expenses if the participant is entitled to these
amounts in the form of cash or any taxable benefit, without regard to
8
o Health FSAs.
2021-06-24 SMBA Board Packet | Page 30 of 69
whether the participant incurs medical expenses during the period of
coverage.
Reimbursements are permissible for medical expenses as defined in Code
section 2’13 of the Code with the exception of premiums for other health
plan coverage (e.9., major medical policies).
A health FSA cannot operate in a manner that enables participants to
receive coverage only for periods during which they expect to incur
medical expenses. Consequently, the period of coverage under a health
FSA generally must be 12 months or the entire length of a short plan year.
The participant must substantiate all claims for reimbursement under a
health FSA. Thus, the participant must provide both a written statement
that the expense has not been reimbursed (or is not reimbursable) under
any other health plan coverage and verifying the date and the amount
incurred for the expense.
Reimbursements may only be made for claims incurred during the period
of coverage. Expenses are treated as having been incurred when the
participant is provided with the medical care that precipitates the expense,
not when the participant is billed or pays for the care.
FSAs are subject to a use-or-lose rule. Amounts unused by the participant
at the end of the plan year are forfeited. lf this was not the case, the FSAs
would be a mechanism for deferring compensation.
See, Reg. S1.125-1, Q&A-17, 51.125-2, a&A-7 (a) and (b)(1)through (7).
Remember, an employer may revise its cafeteria plan to provide for a
grace period of up to 2-112 months after the end of the plan year to
reimburse a participant for expenses incurred during the previous plan
year.
See, IRS Notice 200542
Dependent Care Assistance FSAs.
The same rules that apply to health FSAs also apply to dependent care
FSAs except that coverage does not have to be uniform during the
coverage period. Thus, a participant is only entitled to reimbursement of
amounts actually contributed to the plan and available in the participant’s
account at any given time.
See, Reg. S1 .125-1, Q&A-18, S1 .125-2, O&A-7(b)(8).
9
2021-06-24 SMBA Board Packet | Page 31 of 69
Reporting and Filing Requirements
IRS suspended the requirement for filing Form 5500 and Schedule F imposed on
(a) cafeteria plans under Code Section 125, (b) educational assistance plans
under Code Section 127, and (c) adoption assistance plans under Code Section
137.
The notice was effective in April 2002 and will apply to all plan years for which
any such Form 5500 and Schedule F have not been filed. This retroactive relief
should come as a pleasant surprise for employers who may have overlooked the
filing requirements for past years.
The Form 5500 and Schedule F filing requirement derives from Code Section
6039D, which also imposes the requirement on other employee benefit
programs, including group{erm life insurance plans under Code Section 79,
accident and health plans under Code Sections 105 and 106, and dependent
care assistance programs under Code Section 129. IRS Notice 90-24 previously
suspended the filing requirements for all of these types of plans as well.
This notice does not relieve employers of the Form 5500 filing requirement on
most other welfare benefit plans, including medical, dental and disability
insurance plans, even if such plans are component plans offered under a
cafeteria plan
Code $6039D, Notice 2002-24.
l0
2021-06-24 SMBA Board Packet | Page 32 of 69
Southwest Michigan Building Authority Cafeteria Plan
SUMMARY PLAN DESCRIPTION
Effective February 7, 2017
2021-06-24 SMBA Board Packet | Page 33 of 69
Summary Plan Description
With Premium Payment, and HSA Components
Table of Contents
Article I
INTRODUCTION
Article ll
PARTICIPATION IN YOUR PLAN
How can I participate in the Cafeteria PIan?
What are the Eligibility Requirements to participate in the Plan?
Are there any Employees who are not eligible to participate in the Plan?
How do I become a Participant and when is my Entry Date?
What is the “Open Enrollment Period” and the “Plan Year”?
What happens if my employment ends during the Plan Year or I lose eligibility
for other reasons?
How does a leave of absence affect my benefits?
Article lll
PAYING FOR YOUR BENEFITS UNDER YOUR PLAN
How do employees pay for benefits on a pre{ax basis?
Are there Employer contributions to the Plan?
Flex Credits Formula
Will I pay any administrative costs under the Cafeteria Plan?
Can I change my elections under the Cafeteria Plan during the Plan Year?
When Can I Change Elections Under the Cafeteria Plan During the Plan Year?
Article lV
WHAT BENEFITS ARE PROVIDED UNDER THE PLAN
What benefits may be elected under the Cafeteria Plan?
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2
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2
3
3
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5
5
5
5
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6
Article V
HOW BENEFITS ARE TAXED
What tax savings are possible under the Cafeteria Plan?
How will participating in the Cafeteria Plan affect my Social Security beneflts?
Will I be taxed on the HSA Benefits that I receive?
Article Vl
PREMIUM INSURANCE BENEFIT ACCOUNT
What are “Premium Payment Benellts”?
How are my Premium Payment Benefits paid?
Article VII
HEALTH SAVINGS ACCOUNT (HSA)
What are “HSA Benefits”?
What is my “HSA”?
How are my HSA Benefits paid for under the Cafeteria Plan?
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2021-06-24 SMBA Board Packet | Page 34 of 69
What are the maximum HSA Benefits that I may elect under the Cafeteria
Plan?
Who can contribute to an HSA under the Cafeteria Plan?
Can I change my HSA Contribution under the Cafeteria Plan?
Where can I get more information on my HSA and its related tax
consequences?
Article Vlll
FUNDING
Funding This Plan
How long will the Cafeteria Plan remain in etfect?
15
15
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Article IX
GENERAL INFORMATION
What other general information should I know?
2021-06-24 SMBA Board Packet | Page 35 of 69
Southwest Michigan Building Authority Cafeteria Plan
With Premium Payment, and HSA Components
Summary Plan Description
Article I
INTRODUCTION
Southwest Michigan Building Authority, (the “Employer”) sponsors the Southwest Michigan Building
Authority Cafeteria Plan (with Premium Payment, and HSA Components) (the “Cafeteria Plan”) that allows
Eligible Employees to choose from a menu of different benefits to suit their needs and to pay for those
benefits with pre-tax dollars. Alternatively, Eligible Employees may choose to pay for any of the beneflts
with after-tax contributions on a payroll-reduction basis.
This Summary Plan Description (SPD) describes the basic features of the Cafeteria Plan, how it operates,
and how to get the maximum advantage from it. This Summary does not describe every detail of the
Cafeteria Plan and is not meant to interpret or change the provisions of your Plan. A copy of your Plan is on
file at your Employer’s office and may be read by you, your Beneficiaries, or your legal representatives at
any reasonable time. ln the event of any inconsistencies or conflict belween the actual provisions of the
Cafeteria Plan document and this Summary, the Cafeteria Plan Document shall govern.
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2021-06-24 SMBA Board Packet | Page 36 of 69
Article ll
PARTICIPATION !N YOUR PLAN
How can I participate in the Cafeteria Plan?
Once an Employee has met the Plan’s eligibility requirements, and provided that the election procedures
outlined under’How do I become a Participant and when is my Entry Date?’ section are followed, the
Eligible Employee may participate in the Plan.
what are the Eligibility Requirements to participate in the Plan?
Employees who are eligible to participate in the Employer’s group medical insurance and are employed by a
participating Employer may participate in the Plan once they meet the eligibility requirements and provided
that the election procedures outlined under’How do I become a Participant?’ section are followed.
Eligibility for the Premium lnsurance Benefits is also subject to the additional eligibility requirements, if any,
specified in the Medical lnsurance Plan.
Eligibility for HSA Beneflts also requires that you be an “HSA-Eligible lndividual.” See ‘\,l,hat are HSA
Benefits?’.
Are there any Employees who are not eligible to participate in the Plan?
The following Employees are excluded from participating in the Plan: self-employed individuals, partners in
a partnership, or more-than-2% shareholders in a Subchapter S corporation.
How do I become a Participant and when is my Entry Date?
After you satisfy the eligibility requirements described under’what are the Eligibility Requirements to
participate in the Cafeteria Plan?’, you may enter the plan on the date the eligibility requirements have
been met by signing an individual Election Form/Salary Reduction Agreement. The Election Form/Salary
Reduction Agreement will be available by the first day of the Open Enrollment Period. You must complete
the Election Form/Salary Reduction Agreement and return it to Crystal Bartel within the time period
specified in the enrollment materials. (lf you have not received the enrollment materials and/or the Election
Form/Salary Reduction Agreement, ask Crystal Bartel for copies.)An Eligible Employee who fails to
complete, sign, and return an Election Form/Salary Reduction Agreement, (or waiver of pre-tax premiums)
as required, for the first plan year is considered to have elected not to participate for the initial Plan Year
and may not elect any Benefits under the Plan (a) until the next Open Enrollment Period; or (b) until an
event occurs that would justify a mid-year election change, as described under’Can I change my elections
under the Cafeteria Plan during the Plan Year?’.
An Eligible Employee who fails to complete, sign, and return an Election Form/Salary Reduction Agreement,
(or waiver of pre-tax premiums) as required, for subsequent Plan Years, then the Employee shall continue
with the same elections as the prior year for insuredipremium benefits.
lf an Employee who fails to file an Election Forrn/Salary Reduction Agreement is eligible for Premium
lnsurance Benefits and has made an effective election for such Benefits, then the Employee’s share of the
Contributions for such Benefits will be paid with after{ax dollars outside of this Plan until such time as the
Employee fltes, during a subsequent Open Enrollment Period (or after an event occurs that would justify a
mid-year election change as explained under’can I change my elections under the Cafeteria Plan
during the Plan Year?’), a timely Election Form/Salary Reduction Agreement to elect Premium Payment
Benefits- Until the Employee files such an election, the Employer’s portion of the Contribution will also be
paid outside of this Plan.
Employees who actually participate in the Cafeteria Plan are called “Participants.” An Employee continues
to participate in the Cafeteria Plan until: (a) termination of the Cafeteria Plan; or (b) the date on which the
2021-06-24 SMBA Board Packet | Page 37 of 69
Participant ceases to be an Eligible Employee (because of retirement, termination of employment, layoff,
reduction of hours, or any other reason).
What is the “Open Enrollment Period” and the “Plan Year”?
The Open Enrollment Period is the period during which you have an opportunity to participate under the
Cafeteria Plan by signing and returning an individual Election Form/Salary Reduction Agreement.
You will be notified of the timing and duration of the Open Enrollment Period prior to the beginning of the
new Plan Year. The Plan Administrator will inform all Participants of the applicable dates for each annual
enrollment period.
What happens if my employment ends during the Plan Year or I lose eligibility for other reasons?
lf your employment with the Employer is terminated during the Plan Year, then your active participation in
the Cafeteria Plan will cease and you will not be able to make any more contributions to the Cafeteria Plan
for the Premium insurance benefits, and HSA benefits.
The Premium lnsurance Benefits will terminate as of the date specifled in the l/edical lnsurance Plan.
See ‘What is Continuation Coverage and how does it work?’ and the booklets for the Medical lnsurance
Plan for information on your right to continued or converted group health coverage after termination of your
employment.
For information about obtaining distributions from your HSA at any time, including after termination of
employment, contact the trustee/custodian of your HSA established and maintained outside of the Plan.
lf you are rehired within 30 days or less during the same Plan Year and are eligible for the Cafeteria PIan,
then your prior elections will be reinstated.
lf you are rehired more than 30 days after you terminated employment, and are eligible for the Cafeteria
Plan, you will be treated as a new hire and must re-satisfy (complete the waiting period) Plan eligibility
requirements to rejoin the Plan.
lf you cease to be an Eligible Employee for reasons other than termination of employment, such as a
reduction of hours, you may rejoin the PIan without having to complete the waiting period before again
becoming eligible to participate in the Plan again.
Ho\.v does a leave of absence affect my benefits?
Non-FMLA Leaves of Absence
lf you go on an unpaid leave of absence that does not affect eligibility, then you will continue to participate
and the contribution due from you (if not otheMise paid by your regular salary reductions) will be paid: * with pre-tax dollars, by having such amounts withheld from the Participant’s ongoing
Compensation, if any, including unused sick days and vacation days, or pre-paying all or a
portion of the Contributions for the expected duration of the leave on a pre-tax salary reduction
basis out of pre-leave Compensalion. To pre-pay the Contributions, the Participant must make
a special election to that effect prior to the date that such Compensation would normally be
made available (pre-tax dollars may not be used to fund coverage during the next Plan Year); * with their share of premium payments on the same schedule as payments would be made if
the Employee were not on leave, or under another schedule permitted under Department of
Labor regulations; or * under another arrangement agreed upon between lhe Participant and the Plan Administrator
(e.9., the Plan Administrator may fund coverage during the leave and withhold “catch-up”
amounts from the Participant’s Compensation on a pre-tax or after-tax basis) upon the
3
2021-06-24 SMBA Board Packet | Page 38 of 69
Participant’s return
lf you go on an unpaid leave that does affect eligibility, then the Change in Status rules will apply (see
$/hen Can I Change Elections Under the Cafeteria Plan During the Plan Year?’).
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2021-06-24 SMBA Board Packet | Page 39 of 69
Article lll
PAYING FOR YOUR BENEFITS UNDER YOUR PLAN
How do employees pay for benefits on a pre-tax basis?
An Employee’s election to pay for benefits on a pre-tax or after{ax basis is made by entering into an
Election Form/Salary Reduction Agreement with the Employer (ask Crystal Bartel for a copy if you have not
received one). Under that Agreement, if you elect to pay for benefits on a pre-tax basis, you agree to a
salary reduction to pay for your share of the cost of coverage (also known as contributions) with pre-tax
funds instead of receiving a corresponding amount of your regular pay that would otherwise be subject to
taxes. From then on, you must pay contributions for such coverage by having that portion deducted from
each paycheck on a pre-tax basis (generally an equal portion from each paycheck, or an amount otherwise
agreed to or as deemed appropriate by the Plan Administrator).
Flex Credits Formula
The Employer will contribute a portion of the Contributions as provided in the open enrollment materials
furnished to Employees and/or on the Election Form/Salary Reduclion Agreement to HSA accounts of
Participants lhat completed and returned the required Certification of HSA Eligibility and the papeMork
necessary to establish an HSA by a trustee/custodian. Employer contributions will cease as of the first
month that a Participant ceases to meet the eligibility requirements. ln addition, the maximum annual
contribution shall be reduced by any matching (or other) Contribution made on the Participant’s behalf
(other than pre-tax salary reductions) made under the Plan.
No cash-out option is offered.
Can I change my elections under the Cafeteria Plan during the Plan Year?
With the exception of HSA Benefits (for which prospective election changes generally are allowable), you
generally cannot change your election to participate in the Cafeteria Plan or vary the salary reduction
amounts that you have selected during the Plan Year (known as the irrevocability rule). Of course, you can
change your elections for benefits and salary reductions during the Open Enrollment Period, but those
election changes will apply only for the following Plan Year.
During the PIan Year, however, there are several important exceptions to the irrevocability rule. See the
various “Change in Election Events” that are described under’When Can I Change Elections Under the
Cafeteria Plan?’. The Plan Administrator may also reduce your salary reductions (and increase your
taxable regular pay) during the Plan Year if you are a key employee or highly compensated individual as
defined by the lnternal Revenue Code (“the Code”), if necessary to prevent the Cafeteria plan from
becoming discriminatory within the meaning of the federal income tax law. Additionally, if a mistake is made
as to your eligibility or participation, the allocations made to your account, or the amount of benefits to be
paid to you or another person, then the Plan Administrator shall, to the extent that it deems administratively
possible and otherwise permissible under the Code and other applicable law, allocate, withhold, accelerate,
or otherwise adjust such amounts as will in its judgment accord the credits to the account or distributions to
which you are or such other person is properly entitled under the Cafeteria Plan. Such action by the Plan
Administrator may include withholding of any amounts due from your compensation.
Are there Employer contributions to the Plan?
Your Employer may make contributions to the Plan, in addjtion to your Salary Reduction, as provided in the
open enrollment materials furnished to you and/or on the Election Form/Salary Reduction Agreement.
Will I pay any administrative costs under the Cafeteria Plan?
No. The cost of the plan includes administrative expenses and is paid entirely by the Employer.
2021-06-24 SMBA Board Packet | Page 40 of 69
When can I change elections under the cafeteria plan during the Plan Year?
Participants can change their elections under the Cafeteria Plan during a Plan Year if an event occurs that
is a Change in Election Event and certain other condilions are met, as described below. For details, see the
various ‘Change in Election Events’ headings below for the specific type of Change in Election Event:
Leaves of absence (defined under ‘How do leaves of absence affect my benelits?’); Changes in Status;
Special Enrollment Rights; certain Judgments, Decrees, and Orders; Medicare or Medicaid; Changes in
Cost; Changes in Coverage; and Changes in HSA Elections. Note also that no changes can be made with
respect to Medical lnsurance Benefits if they are not permitted under the Medical lnsurance Plan.
lf the change involves a loss of your Spouse’s or Dependent’s eligibility for [/edical lnsurance Benefits, then
the change will be deemed effective as of the date that eligibility is lost due to the occurrence of the Change
in Election Event, even if you do not request it within 30 days.
1. Leaves of Absence
(Applies to Medical lnsurance Benefits)
You may change an election under the Cafeteria Plan upon non-FMLA leave only as described under’How
do leaves of absence affect my benefits?’
2. Change in Status.
(Applies to Medical lnsurance Benefits) lf one or more of the following Changes in Status occur, you may
revoke your old election and make a new election, provided that both the revocation and new election are
on account of and correspond with the Change in Status (as described in item 3 below). Those occurrences
that qualify as a Change in Status include the events described below, as well as any other events that the
Plan Administrator, in its sole discretion and on a uniform and consistent basis, determines are permitted
under IRS regulations:
a change in your legal marital status (such as marriage, death of a Spouse, divorce, legal
separation, or annulment);
a change in the number of your Dependents (such as the birth of a child, adoption or
placement for adoption of a Dependent, or death of a Dependent);
any of the following events that change the employment status of you, your Spouse, or your
Dependent and that affect benefits eligibility under a cafeteria plan (including this Cafeteria
Plan) or other employee benefit plan of you, your Spouse, or your Dependents. Such events
include any of the following changes in employment status: termination or commencement of
employment; a strike or lockout; a commencement of or return from an unpaid leave of
absence: a change in worksite; switching from salaried to hourly-paid, union to non-union, or
full-time to part-time (or vice versa); incurring a reduction or increase in hours of employment;
or any other similar change that makes the individual become (or cease to be) eligible for a
particular employee benefit;
an event that causes your Dependent to satisfy or cease to satisfy an eligibility requirement for
a particular benefit (such as attaining a specific age, or a similar circumstance); or
a change in your, your Spouse’s, or your Dependent’s place of residence.
3″ Change in Status-Other Requirements.
(Applies to Medical lnsurance Benefits)
lf you wish to change your election based on a Change in Status, you must establish that the revocation is
on accounl of and corresponds with the Change in Status. The Plan Administrator, in its sole discretion and
on a uniform and consistent basis, shall determine whether a requested change is on account of and
corresponds with a Change in Status. As a general rule, a desired election change will be found to be
consistent with a Change in Status event if the event affects coverage eligibility.
ln addition, you must satisfy the following specific requirements in order to alter your election based on that
-6-
lf any Change in Election Event occurs, you must inform the PIan Administrator and complete a new
Election Forrn/Salary Reduction Agreement within 30 days after the occurrence.
2021-06-24 SMBA Board Packet | Page 41 of 69
Change in Status
Loss of spouse or Dependent Rules. For accident and health benefits (the Medical lnsurance
Plan), a special rule governs which type of election changes are consistent with the Change in
Status. For a Change in Status involving your divorce, annulment, or legal separation from
your Spouse, the death of your Spouse or your Dependent, or your Dependent’s ceasing lo
satisfy the eligibility requirements for coverage, you may elect only to cancel the accident or
health benefits for the affected Spouse or Dependent. A change in election for any individual
other than your Spouse involved in the divorce, annulment, or legal separation, your deceased
Spouse or Dependent, or your Dependent that ceased to satisfy the eligibility requirements
would fail to correspond with that Change in Status.
Example: Employee Mike is married to Sharon, and they have one child. The employer offers
a calendar-year cafeteria plan that allows employees to elect any of the following: no medical
coverage, employee-only coverage, employee-plus-one-dependent coverage, or family
coverage. Before the plan year, Mike elects family coverage for himself, his wife Sharon, and
their child. Mike and Sharon subsequently divorce during the plan year; Sharon loses eligibility
for coverage under the plan, while the child is still eligible for coverage under the plan. lilike
now wishes to revoke his previous election and elect no medical coverage. The divorce
between Mike and Sharon constitutes a Change in Status. An election to cancel medical
coverage for Sharon is consistent with this Change in Status. However, an election to cancel
coverage for Mike and/or the child is not consistent with this Change in Status. ln contrasl, an
election to change to employee-plus-one dependent coverage would be consistent with this
Change in Status.
Gain of Coverage Eligibility Under Another Employer’s Plan. For a Change in Status in which
you, your Spouse, or your Dependent gains eligibility for coverage under another employer’s
cafeteria plan (or qualified benefit plan) as a result of a change in your marital status or a
change in your, your Spouse’s, or your Dependent’s employment status, your election to
cease or decrease coverage for that individual under the Cafeteria Plan would correspond with
that Change in Status only if coverage for that individual becomes effective or is increased
under the other employer’s plan.
4. Special Enrollment Rights. (Applies to Medical lnsurance Benefitq ln certain circumstances, enrollment
for Medical lnsurance Beneflts may occur outside the Open Enrollment Period, as explained in materials
provided to you separately describing the Medical lnsurance Benefits. (The Employeis Special Enrollment
Notice also contains important information about the special enrollment rights that you may have. Contact
the Human Resources Manager if you need another copy.) When a special enrollment right explained in
those separate documents applies to your Medical lnsurance Benefits, you may change your election under
the Cafeteria Plan to correspond with the special enrollment right.
5. Certain Judgments, Decrees, and Orders. (Applies to lvtedical lnsurance Benefits) lf a judgment,
decree, or order from a divorce, separation, annulment, or custody change requires your child (including a
foster child who is your Dependent) to be covered under the l\,4edical lnsurance Benefits, you may change
your election to provide coverage for the child. lf the order requires that another individual (such as your
former Spouse) cover the child, then you may change your election to revoke coverage for the child,
provided that such coverage is, in fact, provided for the child.
6. Medicare or Medicaid. (Applies to iledical lnsurance Benefits) lf you, your Spouse, or your Dependent
becomes entitled to (i.e., becomes enrolled in) lVedicare or Medicaid, then you may reduce or cancel that
person’s accident or health coverage under the Medical lnsurance Plan. Similarly, if you, your Spouse, or
your Dependent who has been entitled to Medicare or Medicaid loses eligibility for such coverage, then you
may elect to commence or increase that person’s accident or health coverage (here, lvledical Insurance
Benefits, as applicable).
7. Change in Cost. (Applies to Medical lnsurance Benefits) ll the cost charged to you for your Medical
lnsurance Benefits significantly increases during the Plan Year, then you may choose to do any of the
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2021-06-24 SMBA Board Packet | Page 42 of 69
following: (a) make a corresponding increase in your contributions; (b) revoke your election and receive
coverage under another benelit package option (if any) that provides similar coverage, or elect similar
coverage under the plan of your Spouse’s employer; or (c) drop your coverage, but only if no other benefit
package option provides similar coverage.
8. Change in Coverage. (Applies to Medical lnsurance Benetits) You may also change your election if one
of the following events occurs:
Significant Cuftailment of Coverage. lf your Medical lnsurance Benefits coverage is
significantly curtailed without a loss of coverage (for example, when there is an increase in the
deductible under the Medical lnsurance Benefits), then you may revoke your election for that
coverage and elect coverage under another benefit package option that provides similar
coverage. (Coverage under a plan is significantly curtailed only if there is an overall reduction
of coverage under the plan generallyloss of one particular physician in a network does not
constitute significant curtailment.) lf your Medical lnsurance Benefits coverage is significantly
curtailed with a loss of coverage (for example, if you lose all coverage under the option by
reason of an overall lifetime or annual limitation), then you may either revoke your election and
elect coverage under another benefit package option that provides similar coverage, elect
similar coverage under the plan of your Spouse’s employer, or drop coverage, but only if there
is no option available under the plan that provides similar coverage. (The Plan Administrator
generally will notify you of signillcant curtailments in l\.4edical lnsurance Benefits coverage.)
Addition or Significant lmprovement of Cafeteria Plan Option. ll the Cafeteria Plan adds a new
option or significantly improves an existing option, then the Plan Administrator may permit
Participants who are enrolled in an option other than the new or improved option to elect the
new or improved option. Also, the Plan Administrator may permit eligible Employees to elect
the new or improved option on a prospective basis, subject to limitations imposed by the
applicable option.
Loss of Other Group Health Coverage. You may prospectively change your election to add
group health coverage for you, your Spouse or Dependent, if any of you loses coverage under
any group health coverage sponsored by a governmental or educational institution, including
(but not limited to) the following: a state children’s health insurance program (SCHIP); a
medical care program of certain lndian Tribal programs or a tribal organization; a state health
benefits risk pool; or a foreign government group health plan, subject to the terms and
limitations of the applicable Beneflt Package Option(s).
An election change on account of a HIPAA special enrollment attributable to an employee or
dependent becoming eligible for a state premium assistance subsidy under the plan from
Medicaid or SCHIP may, subject to the provisions of the underlying group health plan, be
effective retroactively (up to 60 days).
Change in Election Under Another Employer Plan. You may make an election change that is
on account of and corresponds with a change made under another employer plan (including a
plan of the Employer or a plan of your Spouse’s or Dependent’s employer), so long as (a) the
other cafeteria plan or qualified benefits plan permits its participants to make an election
change permitted under the IRS regulations; or (b) the Cafeteria Plan permits you to make an
election for a period of coverage (for example, the Plan Year) that is different from the period
of coverage under the other cafeteria plan or qualified benefits plan, wh,ch it does. For
example, if an election to drop coverage is made by your Spouse during his or her employeis
open enrollment, you may add coverage under the Cafeteria Plan to replace the dropped
coverage.
For insignificant increases or decreases in the cost of benefits, however, the Plan Administrator will
automatically ad.iust your election contributions to reflect the minor change in cost. The Plan Administrator
generally will notify you of increases in the cost of l\4edical lnsurance benefits.
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2021-06-24 SMBA Board Packet | Page 43 of 69
9. Change in HSA Elections. lf you have enrolled in the Plan during Open Enrollment and have elected
HSA Benefits, then you may increase, decrease, or revoke your HSA Benefits election on a prospective
basis at any time during the Plan Year, in accordance with the Plan’s administrative procedures for
processing election changes. No other benefit package option election changes can be made as a result of
a change in your HSA Benefits election unless permitted as a result of events otherwise described in this
section, ‘When Can I Change Elections Under the Cafeteria Plan During the Plan Year?’.
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2021-06-24 SMBA Board Packet | Page 44 of 69
what benefits may be elected under the Cafeteria Plan?
The Cafeteria Plan includes the following benefit plans:
Premium Payment Benetits (currently including Premium lnsurance Benefits) – permits an Employee to pay
for his or her share of contributions for the Medical lnsurance Plan with pre-tax dollars. “Medical lnsurance
Plan” means the major medical plan that your Employer maintains for Employees, their Spouses, and
Dependents, providing major medical type beneflts through a group insurance policy.
Here, these benefits include Basic Health, Dental, and Group Term Life lnsurance options. Benelits
provided under the Medical lnsurance Plan are called “Premium lnsurance Benefits.’ Benefits provided
generally under the Premium Payment Component (including any benefits that may be added at a later
date) are called “Premium Payment Benefits”;
Health Savings Account (HSA) – petmits an Employee to make pre-tax contributions to an HSA established
and maintained outside of the Plan with the Employee’s HSA trustee/custodian. Benefits provided under the
HSA, which consist solely of the ability to contribute to the HSA on a pre-tax salary reduction basis, are
called “HSA BeneIlts.”
lf you select one or more of the above benefits, you will pay all or some of the contributions; the Employer
may contribute some or no portion of them. The applicable amounls will be described in documents
furnished separately to you.
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Article lV
WHAT BENEFITS ARE PROVIDED UNDER THE PLAN
2021-06-24 SMBA Board Packet | Page 45 of 69
Article V
HOW BENEFITS ARE TN(ED
What tax savings are possible under the Cafeteria Plan?
You may save both federal income tax and FICA (Social Security) taxes by participating in the Cafeteria
Plan. Here is an example of the possible tax savings of paying for your share of the contributions for
Premium lnsurance Benefits under the Cafeteria Plan. Suppose that you are married and have one child
and that your share of the required contributions for Premium lnsurance Benefits for family coverage is an
annual total of $6,400. Suppose also that your gross pay is $75,000, your Spouse (a student) earns no
income, and you file a joint tax return.
As illustrated in detail by the Table below, if you elect to salary-reduce $6,400 to pay for the Premium
lnsurance contributions, then your annual take-home pay would be $57,252. lf instead you elect to pay the
contributions on an after-tax basis, then your annual take-home pay would be only $55,802. This is because
by participating in the Cafeteria Plan for Premium lnsurance contributions, you will be considered for tax
purposes to have received $68,600 in gross pay, so you save $1,450 per year. How much an employee
actually saves will depend on what family members are covered and the contributions for the coverage, the
total family income, and the tax deductions and exemptions claimed. There may be state tax savings, too.
And salary reductions also lower earned income, which can impact the earned income credit for eligible
taxpayers.
Caution: The amount of the contributions used in this example is not meant to reflect your actual
contributions-the actual contribution amounts will be determined by you.
Cafeteria
Plan”
No
Cafeteria
Plan
lncome ;75,000 $75,000
2. Salary Reductions for Premiums (r i6,400) $o
3.W-2 Gross Waqes $75,000
4. Standard Deduction (r ;11,400) ($1 1,400)
5. Exemptions ($10,e50) ($10,950)
6. Taxable lncome (line 3 minus lines 4 & 5) $46,250 $52,650
7.W-2 Gross Wages ;68,600 $75,000
8. Federal lncome Tax (line 6 @ tax schedule ($6,100) ($7,060)
9. FICA Tax (7.65% of line 3) ($5,738)
10. After-Tax Premium Payments ;0 ($6,400)
11 . Pay After Taxes and Premium Payments (line 7 minus lines 8, 9 & 10) $s7,252 $55,802
How will participating in the Cafeteria Plan affect my Social Security and other benefits?
Participating in the Cafeteria Plan will reduce the amount of your taxable compensation. Accordingly, there
could be a decrease in your Social Security benefits and/or other benefits (e.9., pension, disability, and life
insurance), which are based on taxable compensation. However, the tax savings that you realize through
Cafeteria Plan participation will often more than offset any reduction in other benefits.
Will ! be taxed on the HSA Benefits that I receive?
-11-
I
68.600
” Based on the standard deduction, exemptions, and federal income tax rates for 2018, as found in IRS
Rev. Proc. 2009-50, 2009-45 l.R.B. 167. The FICA tax rate is found at
https://www.ssa.gov/news/press/factsheets/colafacts2O 1 6. html
2021-06-24 SMBA Board Packet | Page 46 of 69
You may save both federal income taxes and FICA (Social Security) taxes by participating in the Cafeteria
Plan. However, very different rules apply with respect to taxability of HSA Benefits than for other Beneflts
offered under this Plan. For more information regarding the tax ramifications of participating in an HSA as
well as the terms and conditions of your HSA see the communications materials provided by your HSA
trustee/custodian and see IRS Publication 969 (“Health Savings Accounts and Other Tax-Favored Health
Plans”).
The Employer cannot guarantee that specific tax consequences will flow from your participation in the
Cafeteria Plan. Ultimately, it is your responsibility to determine the tax treatment of HSA Benefits.
Remember that the PIan Administrator is not providing legal advice.
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2021-06-24 SMBA Board Packet | Page 47 of 69
Article Vl
PREMIUM INSURANCE BENEFIT ACCOUNT
How are my Premium Payment Benefits paid?
As described under’How do employees pay for benefits on a pre-tax basis?’and Yrhat are “Premium
Payment Benefits?’, if you select the Medical lnsurance Plan described under’What are Premium
Payment Benefits?’, then you may be required to pay a portion of the contributions. When you complete
the Election Form/Salary Reduction Agreement, if you elect to pay for benefils on a pre-tax basis you agree
to a salary reduction to pay for your share of the cost of coverage (also known as contributions) with pre{ax
funds instead of receiving a corresponding amount of your regular pay that would otherwise be subject to
taxes. From then on, you must pay a contribution for such coverage by having that portion deducted from
each paycheck on a pre-tax basis (generally an equal portion from each paycheck, or an amount otherwise
agreed to or as deemed appropriate by the Plan Administrator).
The Employer may contribute all, some, or no portion of the Premium Payment Benefits that you have
selected, as described in documents furnished separately to you.
What are “Premium Payment Benefits”?
As described under’How do employees pay for benefits on a pre-tax basis?’, if you elect Premium
Payment Benefits you will be able to pay for your share of contributions for Premium lnsurance Benefits
with pre-tax dollars by enteing into an Election Form/Salary Reduction Agreement with your Employer.
Because the share of the contributions that you pay will be with pre-tax funds, you may save both federal
income taxes and FICA (Social Security) taxes. See’How Benefits Are Taxed?’.
The only Premium Payment Benefits offered under your Plan are for Premium lnsurance Benefits, this is
major medical insurance, including Basic Health, Dental, and Group Term Life lnsurance options.
2021-06-24 SMBA Board Packet | Page 48 of 69
Article Vll
HEALTH SAVINGS ACCOUNT (HSA)
What are “HSA Benefits”?
A Health Savings Account permits Employees to make pre-tax contributions to an HSA established and
maintained outside the Plan with the Employee’s HSA trustee/custodian. For purposes of this Cafeteria
Plan, HSA Benefits consist solely of the ability to make such pre-tax contributions under this Cafeteria Plan
As described under’How do employees pay for benefits on a pre-tax basis?’, if you elect HSA Benefits,
then you will be able to provide a source of pre-tax contributions by entering into an Election Form/Salary
Reduction Agreement with your Employer. Because the share of the contributions that you pay will be with
pre-tax funds, you may save both federal income taxes and FICA (Social Security) taxes. See ‘What tax
savings are possible under the cafeteria Plan?’for an example dealing with pre-tax payments of
Premium lnsurance contributions.
To participate in the HSA Benefits, you must be an “HSA-EIigible Individual.” This means that you are
eligible to contribute to an HSA under the requirements of Code S 223 and that you have elected qualifying
High Deductible Health Plan coverage offered by the Employer and have not elected any disqualifying nonHigh Deductible Health Plan coverage offered by the Employer. (“High Deductible Health Plan” means the
high deductible health plan offered by your Employer that is intended to qualify as a high deductible health
plan under Code S 223(c)(21, as described in materials that will be provided separately to you by the
Employer.) ll you elect HSA Benefits, you will be required to certify that you meet all of the requirements
under Code S 223 to be eligible to contribute to an HSA. These requirements include such things as not
having any disqualifying coverage and you should be aware that coverage under a Spouse’s plan could
make you ineligible to conlribute to an HSA. To find out more about HSA eligibility requirements and the
consequences of making contributions to an HSA when you are not eligible (including possible excise taxes
and other penalties), see IRS Publication 969 (“Health Savings Accounts and Other Tax-Favored Health
Plans”). ln order to elect HSA Benelits under the Plan, you must establish and maintain an HSA outside of
the PIan with an HSA trustee/custodian and you must provide sufficient identifying information about your
HSA to facilitate the forwarding of your pre-tax salary reductions through the Employer’s payroll system to
your designated HSA trustee/custodian.
What is my “HSA”?
The HSA is not an employer-sponsored employee benefit plan-it is an individual trust or cuslodial account
that you open with an HSA trustee/custodian to be used primarily for reimbursement of “eligible medical
expenses” as set forth in Code S 223. Consequently, an HSA trustee/custodian, not the Employer, will
establish and maintain your HSA. The HSA trustee/custodian will be chosen by you, as the Participant, and
not by the Employer. Your Employer may, however, limit the number of HSA providers to whom it will
forward pre-tax salary reductions, a list of whom will be provided upon request. Any such list of HSA
trustees/custodians, however, shall be maintained for administrative simplification and shall not be an
endorsement of any particular HSA trustee/custodian. Your HSA is administered by your HSA
trustee/custodian. Your Employer’s role is limited to allowing you to contribute to your HSA on a pre-tax
Salary-Reduction basis. Your Employer has no authority or control over the funds deposited in your HSA.
As such, the HSA identified above is not subject to the Employee Retirement lncome Security Act of 1974
(ERTSA).
HSA funds can be withdrawn for nonmedical reasons, but such nonmedical distributions are included in
gross income and are generally subject to an additional 20% excise tax as ol January 1,2o’l’lThe Plan Administrator will maintain records to keep track of HSA contributions that you make via pre{ax
salary reductions, but it will not create a separate fund or otherwise segregate assets for this purpose.
How are my HSA Benefits paid for under the Cafeteria Plan?
When you complete the Election Form/Salary Reduction Agreement, you specify the amount of HSA
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2021-06-24 SMBA Board Packet | Page 49 of 69
Benefits that you wish to pay for with your salary reduction. From then on, you make a contribution for such
coverage by having that portion deducted from each paycheck on a pre-tax basis (generally an equal
portion from each paycheck or an amount otherwise agreed to or as deemed appropriate by the Plan
Adminiskator).
For example, suppose that you have elected to contribute up to $1,000 per year for HSA Benefits and that
you have chosen no other benefits under the Cafeteria PIan. lf you pay all of your contributions, then our
records would reflect that you have contributed a total of $1,000 during the Plan Year. lf you are paid
biweekly, then our records would reflect that you have paid $38.46 ($1,000 divided by 26) each pay period
in contributions for the HSA Benefits that you have elected. Such contributions will be forwarded to the HSA
trustee/custodian (or its designee) within a reasonable time after being withheld.
As described under What is my HSA?’, your Employer has no authority or control over the funds deposited
in your HSA.
what are the maximum HsA Benefits that I may elect under the Cafeteria Plan?
lf an individual is an HSA-eligible individual for only part of the year, but you meet all o{ the requirements
under Code $223 to be eligible to contribute to an HSA on December 1, you may be able to contribute up to
the full statutory maximum amount for HSA contributions applicable to your coverage option (i.e., single or
family).
(1) The sum of the limits determined separately for each month under 5223(b)(2), based on
eligibility and HDHP coverage on the flrst day of each month, plus catch-up contributions for
each month, if applicable; or
(21 The maximum annual HSA contribution under S223(bX2)(A) or S223(bX2XB) based on the
individual’s HDHP coverage (self-only or family) on the first day of the Iast month of the
individual’s taxable year, plus catch-up contributions under S223(bX3), if applicable.
For calendar year 2017, a “high deductible health plan” is defined under S223(CX2XA) as a health plan with
an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and
the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do
not exceed $6,550 for self-only coverage or $13,100 for family coverage.
An additional catch-up contribution ($1,000 for 20’17 and thereafter) may be made if you are age 55 or older
(you must certify your age to your Employer).
ln addition, the maximum annual contribution shall be reduced by any matching (or other) Employer
contribution made on your behalf (as described under’what are HSA Benefits?’).
Who can contribute to an HSA under the Cafeteria Plan?
Only Employees who are HSA-EIigible Individuals can participate in the HSA Benefits. As described under’
What are HSA Benefits?’, an HSA-EIigible lndividual means an individualwho meets the eligibility
requirements of Code S 223 and who has elected qualifying High Deductible Health Plan coverage offered
by the Employer and who has not elected any disqualifying non-High Deductible Health Plan coverage. The
terms of the High Deductible Health Plan that has been selected by your Employer will be further described
in materials that will be provided separately to you by the Employer.
Can I change my HSA Contribution under the Cafeteria Plan?
As under’when can I change Elections Under the Cafeteria Plan?’, you may increase, decrease, or
For calendar year 2017, the annual limitation on deductions under S223(bX2XA) for an individual with selfonly coverage under a high deductible health plan is $3,400. For calendar year 2017, the annual limitation
on deductions under S223(bX2XB) for an individual with family coverage under a high deductible health
plan is $6,750.
2021-06-24 SMBA Board Packet | Page 50 of 69
revoke your HSA contribution election at any time during the plan year for any reason by submitting an
election change form to the Plan Administrator (or to its designee). Your election change will be
prospectively effective on the first day of the month following the month in which you properly submitted
your election change. Your ability to make pre-tax contributions under this Plan to the HSA identified above
ends on the date that you cease to meet the eligibility requirements. (See ‘What happens if my
emplolment ends during the Plan Year or I lose eligibility for other reasons?’)
Where can I get more information on my HSA and its related tax consequences?
For details regarding your rights and responsibilities with respect to your HSA (including information
regarding the terms of eligibility, what constitutes a qualifying High Deductible Health Plan, contributions to
the HSA, and distributions from the HSA), please refer to your HSA trust or custodial agreement and other
documentation associated with your HSA and provided to you by your HSA trustee/custodian. You may also
want to review IRS Publication 969 (“Health Savings Accounts and Other Tax-Favored Health PIans”).
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2021-06-24 SMBA Board Packet | Page 51 of 69
Article Vlll
FUNDING
Funding This Plan
The Benefits provided herein shall be paid for in part by lhe Employer and in part under Salary Reduction
Agreements.
All of the amounts payable under this Plan may be paid from the general assets of the Employer, but
Premium Payment Beneflts are paid as provided in the applicable insurance policy. Nothing herein will be
construed lo require the Employer or the Plan Administrator to maintain any fund or to segregate any
amount for the benefit of any Participant, and no Participant or other person shall have any claim against,
right to, or security or other interest in any fund, account, or asset of the Employer from which any payment
under this Plan may be made. There is no trust or other fund from which Benefits are paid. While the
Employer has complete responsibility for the payment of Benefits out of its general assets (except for
Premium Payment Benefits paid as provided in the applicable insurance policy), it may hire an unrelated
third-party paying agent to make Benefit payments on its behalf.
A separate HSA trustee/custodial fee may be assessed by your HSA trustee/custodian for your HSA
established and maintained by you outside of the Plan.
How long will the Cafeteria Plan remain in effect?
Although the Employer expects to maintain the Cafeteria Plan indelinitely, it has the right to amend or
terminate all or any part of the Cafeteria Plan at any time for any reason. lt is also possible that future
changes in state or federal tax laws may require that the Cafeteria Plan be amended accordingly.
2021-06-24 SMBA Board Packet | Page 52 of 69
Article lX
GENERAL lNFORMATION
What other general information should I know?
This question contains certain general information that you may need to know about the Plan. Note: This
Summary Plan Description does not describe the Medical Insurance Plan. Consult the Medical lnsurance
Plan documents and the separate Summary Plan Description for the Medical lnsurance Plan.
Neither does this Summary Plan Description describe many aspects of your HSA (e.9., with respect to
investments or distributions). consult the HSA trust or custodial documents provided by the applicable
trustee/custodian.
General Plan lnformation * Name: Southwest Michigan Building Authority Cafeteria Plan * Plan Number: 501 * Effective Dale: February 7,2017 * Plan Year: January 1st to December 31st. Your Plan’s records are maintained on this 12-
month period of time, except in the case of a short plan year representing the initial Plan Year
beginning February 7, 2017 and ending on December 31, 20’17.
. Type of Plan: Fringe Benefit plan providing Benefits * Your plan shall be governed by the Laws of the State of Michigan
Employer/Plan Sponsor lnformation * Name and Address: Southwest Michigan Building Authority
7275 W. Main Street
Kalamazoo, Ml 49009
(269) 585-4151 * Federal Employer Tax ldentification Number (ElN): 35-2569243
Plan Administrator lnformation
Name, address, and business telephone number:
Southwesl Michigan Building Authority
7275 W. l\4ain Street
Kalamazoo, Ml 49009
(269) 58s-4151
The Plan Administrator appoints the Benefits Administrator to keep the records for the Plan and to be
responsible for the administration of the Plan. However, the Appeals Committee acts on behalf of the Plan
Administrator with respect to appeals. The Benefits Administrator will answer any questions that you may
have about our PIan. You may contact the Benefits Administrator at the above address for any further
information about the Plan.
Funding and Type of Plan Administration
All of the amounts payable under this Plan may be paid from the general assets of the Employer, but
Premium Payment Benefits are paid as provided in the applicable insurance policy.
Nothing herein will be construed to require the Employer or the Plan Administrator to maintain any fund or to
segregate any amount for the benefit of any Participant, and no Participant or other person shall have any
claim against, right to, or security or other interest in any fund, account, or asset of the Employer from which
any payment under this Plan may be made. There is no trust or other fund from which Benefits are paid.
While the Employer has complete responsibility for the payment of Benefits out of its general assets (except
for Premium Payment Benefits paid as provided in the applicable insurance policy), it may hire an unrelated
third-party paying agent to make Benefit payments on its behalf.
Agent for Service of Legal Process
-’18-
2021-06-24 SMBA Board Packet | Page 53 of 69
The name and address of the Plan’s agent for service of legal process is
Southwest Michigan Building Authority
7275 W. Main Street
Kalamazoo, Ml 49009
(269) 585-4151
USERRA
The Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. SS 4301-4335
(USERRA), was signed into law on October 13, 1994. USERRA prohibits discrimination in employment
based on an individual’s prior service in the uniformed services; cunent service in the uniformed services’
or intent to join the uniformed services. An employer is also prohibited from discriminating against a person
because of such person’s attempt to enforce his or her rights under the Act. ln addition, an employer may
not retaliate against an individual for filing a USERRA claim, testifying, or otherwise providing assistance in
any proceeding under the Act. USERRA also provides reemployment rights with the pre-service employer
following qualifying service in the uniformed services. In general, the protected person is entitled to be
reemployed with the status, seniority, and rate of pay as if he or she had been continuously employed
during the period of service. USERRA applies to private employers, the Federal Government, and State and
local governments. lt also applies to United States employers operating overseas and foreign employers
operating within the United States.
Health lnformation Technology for Economic and Clinical Health Act (HITECH Acq
Health lnformation Technology for Economic and Clinical Health Act was passed as part of the American
Recovery and Reinvestment Act of 2009 to strengthen the privacy and security protection of health
information, and to improve the workability and effectiveness of HIPAA Rules. HITECH defines an EHR as
“electronic record of health-related information on an individual that is created, gathered, managed, and
consulted by authorized health care clinicians and staff.”
Neither does this Summary Plan Description describe many aspects of the HSA Component (e.9., with
respect to claims and reimbursement under the HSA). Consult the HSA trust or custodial documents
provided by the applicable trustee/custodian.
-19-
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
This new law amends the Employee Retirement lncome Security Act (ERISA), the Public Health Service Act
(PHSA), and the lnternal Revenue Code (lRC) and applies to all ERISA group health plans and to health
insurers that provide insurance coverage to group health plans. ln general, this new law requires group
health plans that provide mental health or substance use disorder benefits to provide such benefits on par
with medical-surgical benefl ts.
Medical lnsurance PIan and HSA Documents and lnformation
This Summary Plan Description does not describe the N4edical lnsurance Plan. Consult the Medical
lnsurance Plan document and the separate Summary Plan Description for the lvledical lnsurance PIan.
2021-06-24 SMBA Board Packet | Page 54 of 69
2021-06-24 SMBA Board Packet | Page 55 of 69
LEASE AGREEMENT OF OSHTEMO CHARTER TOWNSHIP AND SOUTHWEST
MICHIGAN BUILDING AUTHORITY
Page 1 of 6
This Lease Agreement (hereafter “Lease” or “Agreement”) is dated June 24, 2021, by and
between Oshtemo Charter Township (“Landlord”), and Southwest Michigan Building Authority
(“Tenant”). The parties agree as follows:
PREMISES. The Landlord, in consideration of the payment terms provided in this Agreement,
leases to Tenant the office space as described in Appendix A (the “Premises”) located at 7275 W
Main St, Kalamazoo, MI 49009.
TERM. The lease term will begin on January 01, 2021 and will terminate on December 31,
2021.
LEASE PAYMENTS. Tenant shall pay to Landlord lease payments of $5,250.00, payable in
advance, on the last day of each quarterly period of said lease, for a total lease payment of
$21,000.00. Lease payments shall be made to the Landlord at 7275 W Main St, Kalamazoo, MI
49009.
POSSESSION. Tenant shall be entitled to possession on the first day of the term of this Lease,
and shall yield possession to Landlord on the last day of the term of this Lease, unless otherwise
agreed by both parties in writing. At the expiration of the term, Tenant shall remove its goods
and effects and peaceably yield up the Premises to Landlord in as good a condition as when
delivered to Tenant, ordinary wear and tear excepted.
FURNISHINGS. Furnishings will be provided to Tenant by Landlord as described in Appendix
B (“Furnishings”). Tenant shall return all such items at the end of the lease term in a condition
as good as the condition at the beginning of the lease term, except for such deterioration that
might result from normal use of the furnishings.
PARKING. Tenant shall be entitled to use a minimum of 10 parking spaces for the parking of
the Tenant’s employee / customer motor vehicles.
STORAGE. Tenant shall be entitled to store items of personal property in the Premises during
the term of this Lease. Landlord shall not be liable for loss of or damage to such stored items.
AMENITIES. Tenant shall be entitled to the use of such amenities by Landlord as described in
Appendix C (“Amenities”).
ACCESS. Landlord shall provide to Tenant at least one key for the main entrance and brown
double entry doors to the lobby. Landlord shall also provide a unique door access code to all
Tenant employees, with access to (at minimum) employee entrances and office spaces within the
Premises leased by Tenant.
PROPERTY INSURANCE. Landlord and Tenant shall each maintain appropriate insurance
for their respective interests in the Premises and property located on the Premises. Tenant shall
deliver appropriate evidence to Landlord as proof that adequate insurance is in force issued by
companies reasonably satisfactory to Landlord upon request. Tenant shall also maintain any
other insurance which Landlord may reasonably require for the protection of Landlord’s interest
in the Premises. Tenant is responsible for maintaining casualty insurance on its own property.
2021-06-24 SMBA Board Packet | Page 56 of 69
LEASE AGREEMENT OF OSHTEMO CHARTER TOWNSHIP AND SOUTHWEST
MICHIGAN BUILDING AUTHORITY
Page 2 of 6
LIABILITY INSURANCE. Tenant shall maintain appropriate liability insurance on the
Premises. Tenant shall deliver appropriate evidence to Landlord as proof that adequate insurance
is in force issued by companies reasonably satisfactory to Landlord upon request.
RENEWAL TERMS. This Lease shall automatically renew for an additional period of 1 year
per renewal term, unless either party gives written notice of termination no later than30 days
prior to the end of the term or renewal term. The lease terms during any such renewal term shall
be the same as those contained in this Lease.
MAINTENANCE. Landlord shall have the responsibility to maintain the Premises in good
repair at all times.
UTILITIES AND SERVICES. Landlord shall be responsible for the following utilities and
services in connection with the Premises:
– Electricity
– Water and Sewer
– Gas
– Heating
– Garbage and Trash Disposal
– Janitorial Services
– Internet
Tenant shall be responsible for the following utilities and services in connection with the
Premises:
– Telephone Service
Tenant acknowledges that Landlord has fully explained to Tenant the utility rates, charges, and
services for which Tenant will be required to pay to Landlord (if any), other than those to be paid
directly to the third-party provider.
TERMINATION UPON SALE OF PREMISES. Notwithstanding any other provision of this
Lease, Landlord may terminate this Lease upon 90 days’ written notice to Tenant that the
Premises have been sold.
DESTRUCTION OR CONDEMNATION OF PREMISES. If the Premises are partially
destroyed by fire or other casualty to an extent that prevents the conducting of Tenant’s use of
the Premises in a normal manner, and if the damage is reasonably repairable within sixty days
after the occurrence of the destruction, Landlord shall repair the Premises and a just proportion
of the lease payments shall abate during the period of the repair according to the extent to which
the Premises have been rendered untenantable. However, if the damage is not repairable within
sixty days, or if Landlord is prevented from repairing the damage by forces beyond Landlord’s
control, or if the property is Condemned, this Lease shall terminate upon twenty days’ written
notice of such event or condition by either party and any unearned rent paid in advance by
Tenant shall be apportioned and refunded to it. Tenant shall give Landlord immediate notice of
any damage to the Premises.
2021-06-24 SMBA Board Packet | Page 57 of 69
LEASE AGREEMENT OF OSHTEMO CHARTER TOWNSHIP AND SOUTHWEST
MICHIGAN BUILDING AUTHORITY
Page 3 of 6
DEFAULTS. Tenant shall be in default of this Lease if Tenant fails to fulfill any lease
obligation or term by which Tenant is bound. Subject to any governing provisions of law to the
contrary, if Tenant fails to cure any financial obligation within 7 days (or any other obligation
within 15 days) after written notice of such default is provided by Landlord to Tenant, Landlord
may take possession of the Premises without further notice (to the extent permitted by law), and
without prejudicing Landlord’s rights to damages. In the alternative, Landlord may elect to cure
any default and the cost of such action shall be added to Tenant’s financial obligations under this
Lease. Tenant shall pay all costs, damages, and expenses (including reasonable attorney fees and
expenses) suffered by Landlord by reason of Tenant’s defaults. All sums of money or charges
required to be paid by Tenant under this Lease shall be additional rent, whether or not such sums
or charges are designated as “additional rent”. The rights provided by this paragraph are
cumulative in nature and are in addition to any other rights afforded by law.
HOLDOVER. If Tenant maintains possession of the Premises for any period after the
termination of this Lease (“Holdover Period”), Tenant shall pay to Landlord lease payment(s)
during the Holdover Period at a rate equal to the normal payment rate set forth in the Renewal
Terms paragraph.
CUMULATIVE RIGHTS. The rights of the parties under the Lease are cumulative and shall
not be construed as exclusive unless otherwise required by law.
NON-SUFFICIENT FUNDS. Tenant shall be charged actual cost for any fees incurred by
Landlord for each check that is returned to Landlord for lack of sufficient funds.
ACCESS BY LANDLORD TO PREMISES. Subject to Tenant’s consent (Which shall not be
unreasonably withheld), Landlord shall have the right to enter the Premises to make inspections,
provide necessary services, or show the Premises to prospective buyers, mortgagees, tenants, or
workers. However, Landlord does not assume any liability for the care or supervision of the
Premises. As provided by law, in the case of an emergency, Landlord may enter the Premises
without Tenant’s consent. During the last three months of this Lease, or any extension of this
Lease, Landlord shall be allowed to display the usual “To Let” signs and show the Premises to
prospective tenants.
INDEMNITY REGARDING USE OF PREMISES. To the extent permitted by law, Tenant
agrees to indemnify, hold harmless, and defend Landlord from and against any and all losses,
claims, liabilities, and expenses, including reasonable attorney fees, if any, which Landlord may
suffer or incur in connection with Tenant’s possession, use or misuse of the Premises, except
Landlord’s act or negligence.
DANGEROUS MATERIALS. Tenant shall not keep or have on the Premises any article or
thing of a dangerous, flammable, or explosive character that might substantially increase the
danger of fire on the Premises, or that might be considered hazardous by a responsible insurance
company, unless the prior written consent of Landlord is obtained, and proof of adequate
insurance protection is provided by Tenant to Landlord.
2021-06-24 SMBA Board Packet | Page 58 of 69
LEASE AGREEMENT OF OSHTEMO CHARTER TOWNSHIP AND SOUTHWEST
MICHIGAN BUILDING AUTHORITY
Page 4 of 6
COMPLIANCE WITH REGULATIONS. Tenant shall promptly comply with all laws,
ordinances, requirements, and regulations of the federal, state, county, municipal and other
authorities, and the fire insurance underwriters. However, Tenant shall not by this provision be
required to make alterations to the exterior of the building or alterations of a structural nature.
DISPUTE RESOLUTION. The parties will attempt to resolve any dispute arising out of or
relating to this Agreement through friendly negotiations amongst the parties. If the matter is not
resolved by negotiation, any controversies or disputes arising out of or relating to this Agreement
will be submitted to mediation in accordance with any statutory rules of mediation. If mediation
does not successfully resolve the dispute, then the parties may proceed to seek an alternative
form of resolution in accordance with any other rights and remedies afforded to them by law.
SUBORDINATION OF LEASE. This Lease is subordinate to any mortgage that now exists, or
may be given later by Landlord, with respect to the Premises.
ASSIGNABILITY / SUBLETTING. Tenant may not assign or sublease any interest in the
Premises, nor assign, mortgage, or pledge this Lease, without the prior written consent of
Landlord, with shall not be unreasonably withheld.
NOTICE. Notices under this Lease shall not be deemed valid unless given or served in writing
and forwarded by mail, postage prepaid, addressed as follows:
Landlord:
Oshtemo Charter Township
7275 W Main St
Kalamazoo, MI 49009
Tenant
Southwest Michigan Building Authority
7275 W Main St
Kalamazoo, MI 49009
Such addresses may be changed from time to time by any party by providing notice as set forth
above. Notices mailed in accordance with the above provisions shall be deemed received on the
third day after posting.
GOVERNING LAW. This Lease shall be construed in accordance with the laws of the State of
Michigan.
ENTIRE AGREEMENT / AMENDMENT. This Lease Agreement contains the entire
agreement of the parties and there are no other promises, conditions, understandings or other
agreements, whether oral or written, relating the subject matter of this Lease. This Lease may be
modified or amended in writing, if the writing is signed by the party obligated under the
amendment.
2021-06-24 SMBA Board Packet | Page 59 of 69
LEASE AGREEMENT OF OSHTEMO CHARTER TOWNSHIP AND SOUTHWEST
MICHIGAN BUILDING AUTHORITY
Page 5 of 6
SEVERABILITY. If any portion of this Lease shall be held to be invalid or unenforceable for
any reason, the remaining provision shall continue to be valid and enforceable. If a court finds
that any provision of tis Lease in invalid or unenforceable, but that by limiting such provision, it
would become valid and enforceable, then such provisions shall be deemed to be written,
construed, and enforced as so limited.
WAIVER. The failure of either party to enforce any provision of this Lease shall not be
construed as a waiver or limitation of that party’s right to subsequently enforce and compel strict
compliance with every provision of this Lease.
BINDING EFFECT. The provisions of this Lease shall be binding upon and inure to the
benefit of both parties and their respective legal representatives, successors, and assigns.
[Signature page follows.]
2021-06-24 SMBA Board Packet | Page 60 of 69
LEASE AGREEMENT OF OSHTEMO CHARTER TOWNSHIP AND SOUTHWEST
MICHIGAN BUILDING AUTHORITY
Page 6 of 6
LANDLORD:
Oshtemo Charter Township
By:__________________________________________ Date:__________________
Libby Heiny-Cogswell
Its: Supervisor
TENANT:
Southwest Michigan Building Authority
By:__________________________________________ Date:__________________
Dusty Farmer
Its: Board Chairperson
2021-06-24 SMBA Board Packet | Page 61 of 69
Appendix A – “Premises”
Page 1 of 1
“Premises” as used in the Agreement shall be defined as the following:
– All areas indicated in red in Appendix A Drawing 1 and in Appendix A Drawing 2
2021-06-24 SMBA Board Packet | Page 62 of 69
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2021-06-24 SMBA Board Packet | Page 63 of 69
2021-06-24 SMBA Board Packet | Page 64 of 69
Appendix B – “Furnishings”
Page 1 of 1
“Furnishings” as used in the Agreement shall be defined as the following:
– Cubicle office furniture (desk tops, cubicle walls, supports, and “built-in” drawers and
filing cabinets.
– Garbage / Recycling bins.
2021-06-24 SMBA Board Packet | Page 65 of 69
Appendix C – “Amenities”
Page 1 of 1
“Amenities” as used in the Agreement shall be defined as the following:
– All areas indicated in green in Appendix A Drawing 1 and in Appendix A Drawing 2
o Specifically:
Break room
Bathrooms
Server room (For installation of shared networking equipment and
telephony infrastructure).
Copy room (For occasional use of general office supplies and equipment
not maintained by Tenant.
Conference Room Spaces (“North”, “South”, and “Small” conference
rooms).
2021-06-24 SMBA Board Packet | Page 66 of 69
Southwest Michigan Building Authority
7275 West Main Street
Kalamazoo MI 49009
269-585-4150
www.swmiba.org
MEMORANDUM
To: SMBA Board
From: Office Manager
Date: 6/21/2021
Re: Document Update Project
At the April regular meeting, the Board authorized the start of a project to overhaul & update SMBA’s
documents. The main goal of this project is to unify the policies and create a cohesive look / format for the
documents. The Board requested a list of the documents that were intended to be updated, and periodic
updates from the Office Manager to ensure that the project was not interfering with day-to-day operations due
to scope of the project.
A request is made for the Board to approve the enclosed list of documents.
As a result of need for some of the listed documents (the employee handbook, for example) to be reviewed by
Attorney Porter prior to the board’s review, a secondary request is also made to approve any necessary budget
amendments for GL 569-273-80800 (Legal Fees) in connection with the project. At present, $5,000 has been
budgeted for legal fees, and $3,455 remains available.
2021-06-24 SMBA Board Packet | Page 67 of 69
SMBA Document Overhaul Project
List of Documents for Review & Revision
Overarching Goals:
– Replace gendered language with gender-neutral terms.
– Replace references to the building official with office manager, where appropriate, to reflect
current operations and updated position descriptions.
– Remove procedural instructions / policy from interlocal agreement / bylaw / handbook
documents. Create discrete policy that is referenced by such documents.
1. Interlocal State Construction Code Enforcement and Administration Agreement
a. Update / Remove language duplicated in Bylaws.
b. Remove all procedural information.
i. Create policies for procedures separate from the interlocal agreement.
c. Add language entitling a jurisdiction to a copy of all SMBA policy documents upon
request, withdrawal from, or dissolution of SMBA.
2. Bylaws of Southwest Michigan Building Authority
a. Reconcile officer term of office with regular term for members.
b. Correct typos.
c. Reformat
3. Employee Handbook
a. Rewrite document to incorporate language from the Society for Human Resource
Management (SHRM).
b. Update to reflect new / revised policies.
c. Remove policies from appendices.
d. Replace references to Building Official with Officer Manger, where appropriate.
4. Position Descriptions
a. Rewrite employee position descriptions (Building Official, Office Manager,
Administrative Assistant) to:
i. Include language recommended by SHRM and O*NET.
ii. Establish salary ranges for each position.
5. Policies
a. Reformat & rewrite policies to reflect current operations:
i. Conflict of Interest Policy
ii. Capital Assets Policy
iii. Credit Card Policy
iv. Purchasing Policy
1. Allow office manager to be sole signer of checks for monthly recurring
payments greater than $2,500 (ex: healthcare).
2021-06-24 SMBA Board Packet | Page 68 of 69
v. Investment Policy
vi. Temporary Certificate of Occupancy Policy Resolution
vii. Permits Waiting for Pickup
viii. Expired Permits
ix. Refund of Permit Fee
x. Overpayment / Underpayment of Fee
xi. FOIA Policy & Procedure Guide
xii. Employee Appraisal Policy
xiii. Salary Adjustment Policy
xiv. New – Budget Preparation Policy
xv. New – Administrative Document Management Policy
6. New – Rental Agreement with Oshtemo Charter Township
2021-06-24 SMBA Board Packet | Page 69 of 69