SMBA Regular Board Meeting

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? 1 1 2 2 2 2 2 2 3 3 3 5 5 5 5 5 5 5 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? 10 10 10 ’11 11 11 11 ‘t’l 13 t3 13 13 14 14 14 14 14 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 15 ‘t6 17 17 17 17 18 18 ‘t8 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. -1- 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?’). 4- 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 –t _ 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. -8- 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?’. -9- 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. -10- 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. -12- 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 -14- 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”). -16- 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 I’ v I5cd 15cd 1, ` j r IN T1 1 i r• I5cd \ n F scd Ift!> ‘ I5cd Ix r. ..,: l t F 110- d.. 1- t e r Scd r; . I5cd ._’> •_ •, „ F t: . 0 r F A I5cd I u’ sl I r ..„ 1, l … •,,. ‘.. ;’ , :, : j : 4 ,…. I5cd . r ® x”,{‘ 11. ;”” r… iF wSL_ ® r;.fF i r i n. ff If i I51-d 30C’K’r , 1\ I I I 1 ( ij F . r CdA J – I5c d ‘ r If SEE SHEET E2 FOR MORE F INFORMATION 05 itYY11 i I f 30cd A , v, . l-. , s < i lScd ;, ' SF" i r; r I i 1444 Tl 43r i OA r' I i 30cd 1 Q Scd 41 – 1 cd / h 15cd, y F I5cd yf , I5cd F' c 15cdFIRE ALARM GENERAL NOTES: 1 FIRE ALARM SHALL COMPLY WITH NWA 12 AND SHALL BE FULLY COMPLIANT. 44 T F FIRE ALARM SYSTEM S I5cd2COORDINATE BUILDING USE GROUP OR GROUPS WITH ARCHITECT AND PROVIDE SYSTEM COMPONENTS TO COMPLY WITH RELATED USE GROUP o OR GROUPS APPLIED TO PROJECT. Lo 3. FIRE ALARM INITIATING DEVICES SHALL INCLUDE BUT ARE NOT LIMITED TO: c ONS, HEAT DETECTORS, SMOKE DETECTORS, AUTOMATIC tt MANUAL STATIONS, SPRINKLER FLOW WITCHES, AUTOMATIC SPRINKLER TAMPER SWITCHES, EXTERIOR WATER GONG. 15Cd – 4. PROVIDE FIRE ALARM AND 120V P01ER CONNECTION TO ALL HVAC DUCT „ Iscd DETECTORS AND FIRE/SMOKE DAMPERS. SEE MECHANICAL DRAWINGS FOR LOCATIONS AND COORDINATE WITH MECHANICAL CONTRACTOR 1 . ELECTRICAL CONTRACTOR TO PROVIDE VI DUCT DETECTORS, FIRE/ SMOKE 431, vDAMPERSBY MECHANICAL CONTRACTOR Iscd . 115cd _ g 5. PROVIDE SHOP DRAWINGS FOR FIRE ALARM SYSTEM WHICH INCLUDE C SYSTEM OPERATION DESCRIPTION, DEVICE ADDRESS LIST, SYSTEM RISER 8 DIAGRAM AND BATTERY CALCULATIONS. S D 49 ij, 6. PROVIDE ALL DOCUMENTATION ACCOi TO NFPA 12 TO OWNER AND AUTHORITY HAVING JURISDICTION. DOCUMENTS INCLUDE " RECORD OF COMPLETE" AND " PERMANENT RECORDS". I5cd 1. THE INSTALLER SHALL DE TRAINED AND CERTIFIED BY MANUFACTURER FOR INSTALLATION UNITS FOR THE PROJECT. 5 _ 8. UPON FIRE ALARM ACTIVATION, SHUTDOWN RTU UNITS OVER 20Wdin,\ 3 a CLOSE ALL FIRE/ SMOKE DAMPERS, PROVIDE TIME DELAY FOR DAMPER _ CLOSURE MIN. OF 30 SECONDS. p EXISTING FIRE ALARM SYSTEM BY E.PS. a FIRE ALARM PLAN10. THE NEW FIRE ALARM DEVICES SHALL BE TIED INTO THE EXISTING FIRE UPPER LEVEL. SCALE' 1/ 8"=1'- 0° ALARM SYSTEM. THE EXISTING FIRE ALARM SYSTEM PANEL IS LOCATED IN MECHANICAL ROOM THE EXISTING ELECTRICAL ROOM LOCATED ON THE EAST SIDE OF THE BUILDING. NEW FIRE ALARM CIRCUITS ARE TO RUN TO THIS LOCATION. SCALE, I 1/ 411= 11- 0" ""' W 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