SMBA Special Board Meeting

Southwest Michigan Building Authority 7275 West Main Street Kalamazoo MI 49009 269-585-4150 www.swmiba.org Special Board Meeting June 6, 2023 8:30 AM Oshtemo Township Hall Public Meeting Room 7275 W Main St Kalamazoo, MI 49009 Agenda 1. Call to Order 2. Public Comments on Non-Agenda Items 3. Consent Agenda a. Meeting Minutes – April 27, 2023 Regular Meeting b. April 2023 Financial Reports 4. Closed Session to Consider Written Opinion of Legal Counsel 5. Consideration of Amended Request to Increase Credit Spending Limit for Office Manager 6. Discussion Regarding Health Insurance Options 7. Discussion Regarding Conflict Resolution Process 8. Board Chair’s Report 9. Other Business 10. SeberTans FY 2022 Financial Audit Presentation – Ben Walker 11. Adjournment 2023-06-06 SMBA Board Packet | Page 1 of 44 Minutes of the Regular Board Meeting Southwest Michigan Building Authority (SMBA) Board of Directors April 27, 2023 | 8:30am | Public Meeting Room, Oshtemo Township Hall Page 1 of 2 Minutes 1. Call to Order: Chair Dusty Farmer called the meeting to order at approximately 8:30am. Name Present or Absent Dusty Farmer, Board Chair (Oshtemo Representative) Present Jeff Sorensen (Cooper Representative) Present Carol Dehaan, Treasurer (Cooper Representative) Present Cheri Bell (Oshtemo Representative) Absent Bernie Mein (Oshtemo Representative) Present Also present were: Building Official Garrett Reitenour, Attorney Jim Porter, Administrative Assistant Elvira Oropeza, Board Secretary Kyle Gibson, and three members of the public. 2. Public Comments on Non-Agenda Items: a. Robert Lankford of 8284 W ML AVE: Mr. Lankford requested that the Board of Directors re-instate permits which were closed by the Building Official. Chair Farmer advised Mr. Lankford that such a request should be submitted to the Construction Board of Appeals. 3. Consent Agenda: a. Meeting Minutes – March 23, 2023 Regular Meeting b. March 2023 Financial Reports c. Benefit Load Calculation for FY 2023 d. 1st Quarter Budget Amendments for FY 2023 e. Governance Letter from SeberTans Regarding FY 2022 Audit A motion was made by Jeff Sorensen and supported by Bernie Mein to approve the consent agenda as presented. Upon a voice vote, the motion was carried 4-0 with 1 absent. 4. Consideration of Revision to Fee Schedule: A motion was made by Carol DeHaan and supported by Jeff Sorensen to approve the revised fee schedule as presented. Upon a voice vote, the motion was carried 4-0 with 1 absent. 5. Consideration of Request to Increase Credit Spending Limit for Office Manager: Members of the Board held discussion regarding the request. A motion was made by Dusty Farmer and supported by Bernie Mein to approve the request to increase the credit spending limit for the office manager to $10,000. Upon a voice vote, the motion was carried 4-0 with 1 absent. 6. Old Business – Construction Board of Appeals: Jeff Sorensen raised a concern regarding his motion from the March 23 meeting to convene the Construction Board of Appeals. Following discussion, a motion was made by Jeff Sorensen and supported by Carol DeHaan to cancel the Construction Board of Appeals Meeting scheduled for April 28, 2023. Additional discussion followed. ***A recess was called at 8:55am. The Board reconvened at 9:05am. Discussion continued. A motion was made by Bernie Mein and supported by Dusty Farmer to proceed with the Construction Board of Appeals Meeting scheduled for April 28, 2023 as scheduled. 2023-06-06 SMBA Board Packet | Page 2 of 44 Minutes of the Regular Board Meeting Southwest Michigan Building Authority (SMBA) Board of Directors April 27, 2023 | 8:30am | Public Meeting Room, Oshtemo Township Hall Page 2 of 2 Upon a voice vote, Jeff Sorensen and Carol DeHaan were opposed. The motion failed 2-2 with 1 absent. Discussion continued. ***A recess was called at 9:47am. The Board reconvened at 9:52am. Following further discussion, a motion was made by Dusty Farmer and supported by Carol DeHaan to withdraw the Board’s request to the Construction Board of Appeals, and cancel the meeting scheduled for April 28, 2023. Upon a voice vote, the motion was carried 4-0 with 1 absent. 7. Closed Session to Consider Written Opinion of Legal Counsel: A motion was made by Dusty Farmer and supported by Jeff Sorensen to adopt a resolution to enter into closed session. Upon a roll call vote, the following voted “Yes”: Dusty Farmer, Jeff Sorensen, Carol DeHaan, Bernie Mein The following were Absent: Cheri Bell The motion was carried 4-0 with 1 absent. The Board entered into closed session at approximately 9:55am. A motion was made by Dusty Farmer and supported by Bernie Mein to return to open session. Upon a voice vote, the motion was carried 4-0 with 1 absent. The Board returned to open session at approximately 10:12am. 8. Discussion Regarding Health Insurance Options: Office Manager Gibson presented a summary of options to the Board. Consensus was to table the discussion until the next meeting. 9. Consideration of Application for Appointment to CBOA to Fill a Vacant Seat – Ron Farr: A motion was made by Jeff Sorensen and supported by Carol DeHaan to appoint Ron Farr to the Construction Board of Appeals. Upon a voice vote, the motion was carried 4-0 with 1 absent. 10. Board Chair’s Report: Chair Farmer had nothing to report. 11. Other Business: No other business was brought before the Board. 12. Adjournment: Seeing and hearing no other business, and having exhausted the agenda, Board Chair Dusty Farmer declared the meeting adjourned at approximately 10:23am. Next Regular Board Meeting May 25, 2023 | 8:30am | Public Meeting Room, Oshtemo Township Hall Prepared By: KYLE GIBSON Board Secretary & Office Manager 2023-06-06 SMBA Board Packet | Page 3 of 44 Southwest Michigan Building Authority 7275 West Main Street Kalamazoo MI 49009 269-585-4150 www.swmiba.org Financial Reports for: April 2023 1. Permit Revenue & Inspections Report 2. Budget Snapshot Report 3. Balance Sheet Report 4. Accounts Payable Detailed Disbursement Report 2023-06-06 SMBA Board Packet | Page 4 of 44 SOUTHWEST MICHIGAN BUILDING AUTHORITY REVENUE / INSPECTIONS REPORT Reporting Period: 4/1/2023 to 4/30/2023 Building Electrical Mechanical Plumbing Totals Oshtemo 50 28 32 20 130 Revenue $17,447.00 $4,168.00 $4,346.00 $2,966.00 $28,927.00 YTD Oshtemo 136 129 111 49 425 YTD Revenue $45,647.00 $27,204.00 $17,808.30 $7,380.00 $98,039.30 Cooper 14 2 7 4 27 Revenue $6,009.00 $208.00 $1,066.00 $802.00 $8,085.00 YTD Cooper 46 26 34 15 121 YTD Revenue $20,620.00 $2,943.00 $4,362.00 $1,858.00 $29,783.00 Total Permits 64 30 39 24 157 Total Revenue $23,456.00 $4,376.00 $5,412.00 $3,768.00 $37,012.00 YTD Total Permits 182 155 145 64 546 YTD Total Revenue $66,267.00 $30,147.00 $22,170.30 $9,238.00 $127,822.30 Building Electrical Mechanical Plumbing Totals Oshtemo Inpsections 128 58 45 39 270 Cooper Inspections 30 8 7 9 54 YTD Oshtemo Inspections 428 228 223 166 1045 YTD Cooper Inspections 115 58 65 25 263 Total Inspections 158 66 52 48 324 YTD Total Inspections 543 286 288 191 1308 Permit Revenue Inspections 0 100 200 300 400 500 $0.00 $10,000.00 $20,000.00 $30,000.00 $40,000.00 $50,000.00 $60,000.00 $70,000.00 2022 Revenue by Month 2023 Revenue by Month 2022 Inspections by Month 2023 Inspections by Month Printed 5/17/2023 at 8:24 AM I:\Board Meetings\01 TEMPLATES\Revenue & Inspections Report 2023-06-06 SMBA Board Packet | Page 5 of 44 05/17/2023 08:25 AM REVENUE AND EXPENDITURE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 1/2 User: kgibson DB: Smba PERIOD ENDING 04/30/2023 % Fiscal Year Completed: 32.88 % BDGT USED AVAILABLE BALANCE ACTIVITY FOR MONTH 04/30/2023 YTD BALANCE 04/30/2023 2023 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 210,000.00 46,159.00 17,231.00 163,841.00 21.98 569-272-49200 Electrical Permits 50,000.00 10,622.00 1,557.00 39,378.00 21.24 569-272-49300 Mechanical Permits 55,000.00 9,681.30 2,507.00 45,318.70 17.60 569-272-49400 Plumbing Permits 25,000.00 3,738.00 1,568.00 21,262.00 14.95 569-272-49500 Annual Permits 5,000.00 0.00 0.00 5,000.00 0.00 569-272-60701 FOIA Fees 500.00 77.00 15.40 423.00 15.40 569-272-62600 Building Services to Others 0.00 0.00 0.00 0.00 0.00 569-272-62701 Building Inspections 60,000.00 16,900.00 5,500.00 43,100.00 28.17 569-272-62702 Electrical Inspections 40,000.00 11,650.00 2,300.00 28,350.00 29.13 569-272-62703 Mechanical Inspections 45,000.00 10,300.00 2,550.00 34,700.00 22.89 569-272-62704 Plumbing Inspections 35,000.00 6,300.00 2,400.00 28,700.00 18.00 569-272-63000 Plan Review 40,000.00 16,165.00 2,115.00 23,835.00 40.41 569-272-66300 Bond Forfeitures and Bond Costs 0.00 0.00 0.00 0.00 0.00 569-272-66500 Interest on Investments 12,000.00 2,167.95 0.00 9,832.05 18.07 569-272-67300 Gain / Loss on Sale of Assets 0.00 0.00 0.00 0.00 0.00 569-272-67500 Miscellaneous Revenues 600.00 530.21 0.00 69.79 88.37 569-272-67700 Print / Copy Fees 1,500.00 122.00 40.00 1,378.00 8.13 569-272-67800 Postage / Shipping 100.00 0.00 0.00 100.00 0.00 Total Dept 272 – Revenue Accounts 579,700.00 134,412.46 37,783.40 445,287.54 23.19 TOTAL REVENUES 579,700.00 134,412.46 37,783.40 445,287.54 23.19 Expenditures Dept 273 – Building Authority Expense Activity 569-273-70200 Salaries 194,000.00 58,747.38 14,679.77 135,252.62 30.28 569-273-70203 Construction Board of Appeals Stipend 975.00 260.00 260.00 715.00 26.67 569-273-70204 Board Member At Large Stipend 360.00 90.00 60.00 270.00 25.00 569-273-71002 Health Insurance 56,000.00 26,197.47 4,395.26 29,802.53 46.78 569-273-71003 Disability / Life Insurance 2,350.00 834.32 0.00 1,515.68 35.50 569-273-71004 Work Comp Insurance 1,014.00 1,014.00 0.00 0.00 100.00 569-273-71005 Payroll Taxes – FICA 14,841.00 4,499.90 1,124.41 10,341.10 30.32 569-273-71006 HSA 7,197.89 7,197.86 0.00 0.03 100.00 569-273-71009 Pension Plan 15,520.00 5,849.47 1,762.08 9,670.53 37.69 569-273-71101 In Lieu of Insurance 5,565.00 1,675.04 418.76 3,889.96 30.10 569-273-71102 Clothing Allowance 1,500.00 0.00 0.00 1,500.00 0.00 569-273-71103 Education / Membership Dues 4,000.00 1,489.00 244.00 2,511.00 37.23 569-273-71200 Employee Appreciation 300.00 300.00 0.00 0.00 100.00 569-273-72700 Supplies 4,000.00 1,500.77 660.12 2,499.23 37.52 569-273-72800 Postage / Shipping 2,000.00 85.17 0.00 1,914.83 4.26 569-273-72900 General Insurance 10,114.00 10,114.00 0.00 0.00 100.00 569-273-80100 Building Inspector 8,000.00 650.00 50.00 7,350.00 8.13 569-273-80200 Electrical Inspector 40,000.00 11,250.00 2,900.00 28,750.00 28.13 569-273-80300 Mechanical Inspector 40,000.00 12,000.00 2,500.00 28,000.00 30.00 569-273-80400 Plumbing Inspector 30,000.00 8,200.00 2,000.00 21,800.00 27.33 569-273-80500 Plan Review 30,000.00 12,295.00 3,265.00 17,705.00 40.98 569-273-80600 Consultants 0.00 0.00 0.00 0.00 0.00 2023-06-06 SMBA Board Packet | Page 6 of 44 05/17/2023 08:25 AM REVENUE AND EXPENDITURE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 2/2 User: kgibson DB: Smba PERIOD ENDING 04/30/2023 % Fiscal Year Completed: 32.88 % BDGT USED AVAILABLE BALANCE ACTIVITY FOR MONTH 04/30/2023 YTD BALANCE 04/30/2023 2023 GL NUMBER DESCRIPTION AMENDED BUDGET Fund 569 – Building Authority Expenditures 569-273-80700 Accounting / Audit Fees 12,500.00 5,460.00 4,500.00 7,040.00 43.68 569-273-80800 Legal Fees 7,000.00 1,875.00 1,725.00 5,125.00 26.79 569-273-80900 IT / Infrastructure 29,700.00 12,025.68 2,719.88 17,674.32 40.49 569-273-80901 IT / Software 8,900.00 2,695.00 139.00 6,205.00 30.28 569-273-80902 IT / Support 500.00 0.00 0.00 500.00 0.00 569-273-81000 New Hire Expenses 0.00 0.00 0.00 0.00 0.00 569-273-85000 Telephone 4,000.00 1,575.59 295.42 2,424.41 39.39 569-273-86000 Vehicle Gas / Maintenance 3,500.00 904.25 210.00 2,595.75 25.84 569-273-86100 Mileage 500.00 0.00 0.00 500.00 0.00 569-273-94000 Facility Rent 22,000.00 22,000.00 0.00 0.00 100.00 569-273-95500 Miscellaneous Expenditures 500.00 0.00 0.00 500.00 0.00 569-273-95600 Equipment / Maintenance 2,400.00 977.36 385.89 1,422.64 40.72 569-273-96401 Refund of Overpayment 0.00 0.00 0.00 0.00 0.00 569-273-96500 Bank Service Charges 720.00 161.70 0.00 558.30 22.46 569-273-96800 Depreciation Expense 0.00 0.00 0.00 0.00 0.00 569-273-97100 Capital Outlay 3,500.00 3,475.68 927.00 24.32 99.31 569-273-97200 Capital Outlay – Vehicle 0.00 0.00 0.00 0.00 0.00 569-273-99300 Interest / Penalty 0.00 0.00 0.00 0.00 0.00 Total Dept 273 – Building Authority Expense Activity 563,456.89 215,399.64 45,221.59 348,057.25 38.23 TOTAL EXPENDITURES 563,456.89 215,399.64 45,221.59 348,057.25 38.23 NET OF REVENUES & EXPENDITURES 16,243.11 (80,987.18) (7,438.19) 97,230.29 498.59 TOTAL EXPENDITURES 563,456.89 215,399.64 45,221.59 348,057.25 38.23 TOTAL REVENUES 579,700.00 134,412.46 37,783.40 445,287.54 23.19 Fund 569 – Building Authority: NET OF REVENUES & EXPENDITURES 16,243.11 (80,987.18) (7,438.19) 97,230.29 498.59 TOTAL EXPENDITURES – ALL FUNDS 563,456.89 215,399.64 45,221.59 348,057.25 38.23 TOTAL REVENUES – ALL FUNDS 579,700.00 134,412.46 37,783.40 445,287.54 23.19 2023-06-06 SMBA Board Packet | Page 7 of 44 05/17/2023 08:26 AM BALANCE SHEET FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 1/1 User: kgibson DB: Smba Period Ending 04/30/2023 Fund 569 Building Authority GL Number Description Balance *** Assets *** 569-000-00100 Cash – CKG – Mercantile Bank 298,036.81 569-000-00201 Cash – SAV – Consumers CU 25.00 569-000-00301 Cash – CD – Flagstar Bank 250,980.83 569-000-00302 Cash – CD – Consumers CU 152,049.71 569-000-00400 Cash – Imprest / Petty 250.00 569-000-14700 Accumulated Depreciation (43,844.20) 569-000-14799 Capital Assets Equipment 93,831.85 Total Assets 751,330.00 *** Liabilities *** 569-000-20200 Accounts Payable 0.39 569-000-22800 Due to State of Michigan 607.95 569-000-25700 Accrued Payroll 3,718.79 569-000-26500 Performance Bonds 5,000.00 Total Liabilities 9,327.13 *** Fund Balance *** 569-000-39000 Fund Balance 822,990.05 Total Fund Balance 822,990.05 Beginning Fund Balance 822,990.05 Net of Revenues VS Expenditures (80,987.18) Ending Fund Balance 742,002.87 Total Liabilities And Fund Balance 751,330.00 2023-06-06 SMBA Board Packet | Page 8 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 1/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 05/23/2023 N 204.98 SEATTLE WA, 98124-5184 / / 0.0000 N 0.00 2372 PO BOX 035184 04/24/2023 N 204.98 AMAZON AMAZON CAPITAL SERVICES 04/24/2023 1MGY-M1C6-KXJ1 SWBA SUPPLIES 569-273-72700 ANKER S500 CONFERENCE SPEAKERPHONE 204.98 GL NUMBER DESCRIPTION AMOUNT Paid 05/23/2023 N 29.98 SEATTLE WA, 98124-5184 / / 0.0000 N 0.00 2371 PO BOX 035184 04/24/2023 N 29.98 AMAZON AMAZON CAPITAL SERVICES 04/24/2023 1V7T-YKTC-KYYR SWBA SUPPLIES 569-273-72700 KEYBOARD WITH TOUCHPAD FOR MEETINGS 29.98 GL NUMBER DESCRIPTION AMOUNT Paid 05/04/2023 N 61.98 SEATTLE WA, 98124-5184 / / 0.0000 N 0.00 2333 PO BOX 035184 04/05/2023 N 61.98 AMAZON AMAZON CAPITAL SERVICES 04/05/2023 1WHQ-YJFF-9XV6 SWBA SUPPLIES 569-273-72700 AIR FILTER REPLACEMENT CARTRIDGES QTY 2 61.98 GL NUMBER DESCRIPTION AMOUNT Paid 05/21/2023 N 43.80 SEATTLE WA, 98124-5184 / / 0.0000 N 0.00 2370 PO BOX 035184 04/24/2023 N 43.80 AMAZON AMAZON CAPITAL SERVICES 04/24/2023 1WTC-P631-9N99 SWBA SUPPLIES 569-273-72700 CHECK ENDORSEMENT STAMPS, QTY 2 43.80 VENDOR TOTAL: 340.74 2023-06-06 SMBA Board Packet | Page 9 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 2/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 05/01/2023 N 2,420.00 CHICAGO IL, 60680-9113 / / 0.0000 N 0.00 2331 PO BOX 809113 04/03/2023 N 2,420.00 AUNALYTICS AUNALYTICS, INC 04/03/2023 29981798 SWBA CLOUD HOSTING SERVICES MAY 2023 569-273-80900 IT / Infrastructure 2,420.00 VENDOR TOTAL: 2,420.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/12/2023 Y 60.00 KALAMAZOO MI, 49009-6978 / / 0.0000 N 0.00 2350 10339 SKYVIEW DR 04/12/2023 N 60.00 BMEIN BERNARD MEIN 04/12/2023 2023-04-12-1 SWBA BOARD MEETING ATTENDANCE Q1-2023 569-273-70204 2023-03-02 30.00 569-273-70204 2023-03-23 30.00 60.00 VENDOR TOTAL: 60.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/28/2023 N 4,395.26 DETROIT MI, 48267-4416 / / 0.0000 N 0.00 2358 PO BOX 674416 04/14/2023 N 4,395.26 BCBS BLUE CROSS BLUE SHIELD OF MICHIGAN 04/14/2023 007043238-0000 SWBA HEALTH INSURANCE JUN 2023 PREPAY 569-273-71002 Health Insurance 4,395.26 VENDOR TOTAL: 4,395.26 GL NUMBER DESCRIPTION AMOUNT Paid 04/05/2023 Y 65.00 KALAMAZOO MI, 49009-9118 / / 0.0000 N 0.00 2339 6330 TORRINGTON RD 04/05/2023 N 65.00 BVANDERWEE BRUCE VANDERWEELE 04/05/2023 2023-04-05-2 SWBA PAYMENT FOR CBOA MEETING ATTENDANCE 569-273-70203 2023-04-05 65.00 2023-06-06 SMBA Board Packet | Page 10 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 3/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID VENDOR TOTAL: 65.00 2023-06-06 SMBA Board Packet | Page 11 of 44 Paid 04/12/2023 N 390.00 ANN ARBOR MI, 48104-1354 / / 0.0000 N 0.00 CODE ENFORCEMENT SERVICES DIVISION 04/12/2023 N 390.00 117 N 1ST ST STE 70 2355 CWA CARLISLE WORTMAN ASSOCIATES 04/12/2023 2168870 SWBA REVIEW PB23-05-0087 6820 W MAIN ST MCDODue 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 4/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/12/2023 N 240.00 ANN ARBOR MI, 48104-1354 / / 0.0000 N 0.00 CODE ENFORCEMENT SERVICES DIVISION 04/12/2023 N 240.00 117 N 1ST ST STE 70 2352 CWA CARLISLE WORTMAN ASSOCIATES 04/12/2023 2168866 SWBA REVIEW PB22-05-0436 3680 STADIUM PARK WA569-273-80500 Plan Review 240.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/12/2023 N 120.00 ANN ARBOR MI, 48104-1354 / / 0.0000 N 0.00 CODE ENFORCEMENT SERVICES DIVISION 04/12/2023 N 120.00 117 N 1ST ST STE 70 2351 CWA CARLISLE WORTMAN ASSOCIATES 04/12/2023 2168867 SWBA REVIEW PE23-05-0091 3680 STADIUM PARK WA569-273-80500 Plan Review 120.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/12/2023 N 720.00 ANN ARBOR MI, 48104-1354 / / 0.0000 N 0.00 CODE ENFORCEMENT SERVICES DIVISION 04/12/2023 N 720.00 117 N 1ST ST STE 70 2356 CWA CARLISLE WORTMAN ASSOCIATES 04/12/2023 2168868 SWBA REVIEW PB23-05-0052 501 N 9TH ST WALMAR569-273-80500 Plan Review 720.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/12/2023 N 390.00 ANN ARBOR MI, 48104-1354 / / 0.0000 N 0.00 CODE ENFORCEMENT SERVICES DIVISION 04/12/2023 N 390.00 117 N 1ST ST STE 70 2354 CWA CARLISLE WORTMAN ASSOCIATES 04/12/2023 2168869 SWBA REVIEW PB23-05-0062 5097 CENTURY AVE ST569-273-80500 Plan Review 390.00 2023-06-06 SMBA Board Packet | Page 12 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 5/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/12/2023 N 390.00 ANN ARBOR MI, 48104-1354 / / 0.0000 N 0.00 CODE ENFORCEMENT SERVICES DIVISION 04/12/2023 N 390.00 117 N 1ST ST STE 70 2355 CWA CARLISLE WORTMAN ASSOCIATES 04/12/2023 2168870 SWBA REVIEW PB23-05-0087 6820 W MAIN ST MCDO569-273-80500 Plan Review 390.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/12/2023 N 480.00 ANN ARBOR MI, 48104-1354 / / 0.0000 N 0.00 CODE ENFORCEMENT SERVICES DIVISION 04/12/2023 N 480.00 117 N 1ST ST STE 70 2353 CWA CARLISLE WORTMAN ASSOCIATES 04/12/2023 2168871 SWBA REVIEW PB23-05-0010 6857 W MAIN ST STE 569-273-80500 Plan Review 480.00 VENDOR TOTAL: 2,340.00 2023-06-06 SMBA Board Packet | Page 13 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 6/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 05/09/2023 N 265.00 BRIGHTON MI, 48114 / / 0.0000 N 0.00 2342 9032 ROSEMARY LN 04/10/2023 N 265.00 CSC CODE SAVVY CONSULTANTS LLC 04/10/2023 2212 SWBA FA REVIEW PE23-05-0094 6400 TECHNOLOGY A569-273-80500 2023-0057-1 265.00 GL NUMBER DESCRIPTION AMOUNT Paid 05/10/2023 N 265.00 BRIGHTON MI, 48114 / / 0.0000 N 0.00 2343 9032 ROSEMARY LN 04/10/2023 N 265.00 CSC CODE SAVVY CONSULTANTS LLC 04/10/2023 2214 SWBA FA REVIEW PE23-05-0017 6480 TECHNOLOGY A569-273-80500 2023-065-1 265.00 GL NUMBER DESCRIPTION AMOUNT Paid 05/15/2023 N 395.00 BRIGHTON MI, 48114 / / 0.0000 N 0.00 2359 9032 ROSEMARY LN 04/17/2023 N 395.00 CSC CODE SAVVY CONSULTANTS LLC 04/17/2023 2217 SWBA FS REVIEW PM23-05-0125 5130 W MAIN ST K569-273-80500 2022-0213-2 395.00 VENDOR TOTAL: 925.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/14/2023 N 50.00 Kalamazoo MI, 49007 04/14/2023 0.0000 N 0.00 2357 542 E MICHIGAN AVE 04/14/2023 N 0.00 MISC E M Sergeant 04/14/2023 00037936 SWBA BD Payment Refund 569-272-62703 35. Inspection – Rough 50.00 VENDOR TOTAL: 50.00 2023-06-06 SMBA Board Packet | Page 14 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 7/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/05/2023 Y 2,100.00 KALAMAZOO MI, 49009-8911 / / 0.0000 N 0.00 2334 6323 WINDDRIFT AVE 04/05/2023 N 2,100.00 GHECKMAN GARYAIRE, LLC 04/05/2023 2023-04-05-1 SWBA PLUMBING / MECHANICAL INSPECTIONS 569-273-80400 Plumbing Inspector 600.00 569-273-80300 Mechanical Inspector 1,000.00 569-273-80200 Electrical Inspector 450.00 569-273-80100 Building Inspector 50.00 2,100.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/18/2023 Y 1,450.00 KALAMAZOO MI, 49009-8911 / / 0.0000 N 0.00 2367 6323 WINDDRIFT AVE 04/18/2023 N 1,450.00 GHECKMAN GARYAIRE, LLC 04/18/2023 2023-04-18-3 SWBA PLUMBING / MECHANICAL INSPECTIONS 569-273-80400 Plumbing Inspector 800.00 569-273-80300 Mechanical Inspector 200.00 569-273-80200 Electrical Inspector 450.00 1,450.00 VENDOR TOTAL: 3,550.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/17/2023 N 5,000.00 ANN ARBOR MI, 48108 04/17/2023 0.0000 N 0.00 2364 1457 WHISPERING MAPLES DR S 04/17/2023 N 0.00 MISC GCWAX2, LLC 04/17/2023 BTCO22-003 SWBA BD Bond Refund 569-000-26500 BTCO22-003 5,000.00 VENDOR TOTAL: 5,000.00 2023-06-06 SMBA Board Packet | Page 15 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 8/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/24/2023 N 5,000.00 Kalamazoo MI, 49009-2013 04/24/2023 0.0000 N 0.00 2369 6339 STADIUM DR 04/24/2023 N 0.00 MISC Glas Associates Inc. 04/24/2023 BTCO23-003 SWBA BD Bond Refund 569-000-26500 BTCO23-003 5,000.00 VENDOR TOTAL: 5,000.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/10/2023 N 587.70 KALAMAZOO MI, 49007-4713 / / 0.0000 N 0.00 2346 211 S ROSE ST 04/10/2023 N 587.70 GREENLEAF GREENLEAF TRUST 04/10/2023 00017385 SWBA Q1-2023 TRUSTEE AND RECORDKEEPING FEES 569-273-71009 TRUSTEE MARKET VALUE FEE 159.70 569-273-71009 RECORDKEEPING BASE FEE 400.00 569-273-71009 PER PARTICIPANT FEE 28.00 587.70 VENDOR TOTAL: 587.70 GL NUMBER DESCRIPTION AMOUNT Paid 04/05/2023 Y 65.00 KALAMAZOO MI, 49009-9495 / / 0.0000 N 0.00 2340 3030 S 9TH ST STE 2I 04/05/2023 N 65.00 JSMITH JEFFREY SMITH 04/05/2023 2023-04-05-3 SWBA PAYMENT FOR CBOA MEETING ATTENDANCE 569-273-70203 2023-04-05 65.00 VENDOR TOTAL: 65.00 2023-06-06 SMBA Board Packet | Page 16 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 9/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/17/2023 N 105.00 CALEDONIA MI, 49316 04/17/2023 0.0000 N 0.00 2361 6980 HAMMOND AVE SE 04/17/2023 N 0.00 MISC K & S Plumbing 04/17/2023 00037868 SWBA BD Payment Refund 569-272-49400 14. 3/4 ” Water Dist. Pipe 5.00 569-272-62704 23. Inspection – Rough 50.00 569-272-62704 23. Inspection – Final 50.00 105.00 VENDOR TOTAL: 105.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/05/2023 Y 65.00 KALAMAZOO MI, 49009-7920 / / 0.0000 N 0.00 2341 322 S 1ST ST 04/05/2023 N 65.00 KOSBORNE KEVIN OSBORNE 04/05/2023 2023-04-05-4 SWBA PAYMENT FOR CBOA MEETING ATTENDANCE 569-273-70203 2023-04-05 65.00 VENDOR TOTAL: 65.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/22/2023 N 1,951.31 KALAMAZOO MI, 49009-1332 / / 0.0000 N 0.00 2332 811 S DRAKE RD 04/04/2023 N 1,951.31 VISA MERCANTILE VISA 04/04/2023 2023-04-04-1 SWBA VISA BILL MAR 2023 569-273-86000 GAS 180.01 569-273-86000 CAR WASH MONTHLY SUBSCRIPTION 29.99 569-273-80901 COGNITO FORMS SUBSCRIPTION 139.00 569-273-80900 SITEGROUND WEB HOSTING 299.88 569-273-71103 KYLE GIBSON SHRM MEMBERSHIP 244.00 569-273-97100 STANDING DESK KIT FOR EL 927.00 569-273-72700 MENARDS / DRILL 131.43 1,951.31 VENDOR TOTAL: 1,951.31 2023-06-06 SMBA Board Packet | Page 17 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 10/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/05/2023 Y 750.00 COLDWATER MI, 49036-9553 / / 0.0000 N 0.00 2335 426 SARAH LN 04/05/2023 N 750.00 TTHATCHER MP SERVICES LLC 04/05/2023 2023-04-05-2 SWBA MECHANICAL / PLUMBING INSPECTIONS 569-273-80300 Mechanical Inspector 500.00 569-273-80400 Plumbing Inspector 250.00 750.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/18/2023 Y 1,150.00 COLDWATER MI, 49036-9553 / / 0.0000 N 0.00 2366 426 SARAH LN 04/18/2023 N 1,150.00 TTHATCHER MP SERVICES LLC 04/18/2023 2023-04-18-2 SWBA MECHANICAL / PLUMBING INSPECTIONS 569-273-80300 Mechanical Inspector 800.00 569-273-80400 Plumbing Inspector 350.00 1,150.00 VENDOR TOTAL: 1,900.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/23/2023 N 119.97 CINCINNATI OH, 45263-3301 / / 0.0000 N 0.00 2348 PO BOX 633301 04/10/2023 N 119.97 ODP ODP BUSINESS SOLUTIONS 04/10/2023 305681548001 SWBA OFFICE SUPPLIES 569-273-72700 COPY PAPER QTY 3 CASE (10 REAM / CASE) 119.97 GL NUMBER DESCRIPTION AMOUNT Paid 04/23/2023 N 67.98 CINCINNATI OH, 45263-3301 / / 0.0000 N 0.00 2349 PO BOX 633301 04/10/2023 N 67.98 ODP ODP BUSINESS SOLUTIONS 04/10/2023 306622637001 SWBA OFFICE SUPPLIES 569-273-72700 HP 62XL BLACK INK REPLACEMENTS QTY 2 67.98 VENDOR TOTAL: 187.95 2023-06-06 SMBA Board Packet | Page 18 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 11/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/17/2023 N 1,725.00 KALAMAZOO MI, 49009-8210 / / 0.0000 N 0.00 2363 7275 W MAIN ST 04/17/2023 N 1,725.00 OSHTEMO OSHTEMO TOWNSHIP 04/17/2023 10174 SWBA LEGAL FEES 2023-Q1 569-273-80800 JAN 195.00 569-273-80800 FEB 645.00 569-273-80800 MAR 885.00 1,725.00 VENDOR TOTAL: 1,725.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/21/2023 N 221.89 CHICAGO IL, 60680-2815 / / 0.0000 N 0.00 2330 PO BOX 802815 04/03/2023 N 221.89 RICOH RICOH 04/03/2023 5067072995 SWBA Q2-2023 CONTRACT # 5137948 569-273-95600 MPCW2201SP BASE 2023-04-01 TO 2023-06-30 210.00 569-273-95600 MPCW2201SP COLOR READ 11.89 221.89 GL NUMBER DESCRIPTION AMOUNT Paid 05/06/2023 N 164.00 CHICAGO IL, 60680-2815 / / 0.0000 N 0.00 2360 PO BOX 802815 04/17/2023 N 164.00 RICOH RICOH 04/17/2023 5067183968 SWBA APR 2023 CONTRACT # 4470926 569-273-95600 MPC2504 BASE 2023-04-15 TO 2023-05-14 17.72 569-273-95600 MPC2504 BW READ 3.88 569-273-95600 MPC2504 COLOR READ 142.40 164.00 VENDOR TOTAL: 385.89 2023-06-06 SMBA Board Packet | Page 19 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 12/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/10/2023 N 4,500.00 PORTAGE MI, 49002-0507 / / 0.0000 N 0.00 2347 246 E KILGORE RD 04/10/2023 N 4,500.00 SIEGFRIED SIEGFRIED CRANDALL PC 04/10/2023 111856 SWBA ACCOUNTING SERVICES MAR 2023 & PRE-AUDI569-273-80700 Accounting / Audit Fees 4,500.00 VENDOR TOTAL: 4,500.00 2023-06-06 SMBA Board Packet | Page 20 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 13/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/17/2023 N 55.00 Plainwell MI, 49080 04/17/2023 0.0000 N 0.00 2362 361 12 Street 04/17/2023 N 0.00 MISC Steensma Lawn And Power 04/17/2023 00036922 SWBA BD Payment Refund 569-272-49300 07. Gas Piping (Each Opening) 5.00 569-272-62703 35. Inspection – Final 50.00 55.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/10/2023 N 59.00 Plainwell MI, 49080 04/10/2023 0.0000 N 0.00 2345 361 12 Street 04/10/2023 N 0.00 MISC Steensma Lawn And Power 04/10/2023 00037827 SWBA BD Payment Refund 569-272-49200 07. Residential Generator 9.00 569-272-62702 30. Inspection – Final 50.00 59.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/10/2023 N 55.00 Plainwell MI, 49080 04/10/2023 0.0000 N 0.00 2344 361 12 Street 04/10/2023 N 0.00 MISC Steensma Lawn And Power 04/10/2023 00037828 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: 169.00 2023-06-06 SMBA Board Packet | Page 21 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 14/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/05/2023 Y 65.00 KALAMAZOO MI, 49009-8013 / / 0.0000 N 0.00 2338 6279 SHUGARBUSH TRL 04/05/2023 N 65.00 SVISSER STEVE VISSER 04/05/2023 2023-04-05-1 SWBA PAYMENT FOR CBOA MEETING ATTENDANCE 569-273-70203 2032-04-05 65.00 VENDOR TOTAL: 65.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/21/2023 N 145.42 CHICAGO IL, 60677-8000 / / 0.0000 N 0.00 2336 8020 SOLUTIONS CTR 04/05/2023 N 145.42 TELNET TELNET WORLDWIDE 04/05/2023 269486 SWBA PHONE APR 2023 569-273-85000 Telephone 145.42 VENDOR TOTAL: 145.42 GL NUMBER DESCRIPTION AMOUNT Paid 04/20/2023 N 155.00 Kalamazoo MI, 49009-9056 04/20/2023 0.0000 N 0.00 2368 7858 RAVINE RD 04/20/2023 N 0.00 MISC Van Dam & Kruzinga 04/20/2023 00036843 SWBA BD Payment Refund 569-272-49100 01. Base Permit Fee 155.00 VENDOR TOTAL: 155.00 2023-06-06 SMBA Board Packet | Page 22 of 44 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 05/17/2023 08:27 AM INVOICE APPROVAL BY INVOICE REPORT FOR SOUTHWEST MICHIGAN BUILDING AUTHORITY Page: 15/15 User: kgibson DB: Smba POST DATES 04/01/2023 – 04/30/2023 BOTH JOURNALIZED AND UNJOURNALIZED PAID GL NUMBER DESCRIPTION AMOUNT Paid 04/05/2023 Y 1,600.00 MATTAWAN MI, 49071-9746 / / 0.0000 N 0.00 2337 38159 24TH ST 04/05/2023 N 1,600.00 WWILCOX WILLIAM WILCOX 04/05/2023 2023-04-05-3 SWBA ELECTRICAL INSPECTIONS 569-273-80200 Electrical Inspector 1,600.00 GL NUMBER DESCRIPTION AMOUNT Paid 04/18/2023 Y 400.00 MATTAWAN MI, 49071-9746 / / 0.0000 N 0.00 2365 38159 24TH ST 04/18/2023 N 400.00 WWILCOX WILLIAM WILCOX 04/18/2023 2023-04-18-1 SWBA ELECTRICAL INSPECTIONS 569-273-80200 Electrical Inspector 400.00 VENDOR TOTAL: 2,000.00 TOTAL – ALL VENDORS: 38,153.27 2023-06-06 SMBA Board Packet | Page 23 of 44 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: 17 MAY 2023 Re: Request to Increase Credit Spending Limit for Office Manager At the regular meeting of April 27, 2023, a request was made by Office Manager Gibson to increase the credit spending limit with Mercantile Bank up to the amount of $10,000.00. A motion was passed authorizing the increase, but Mercantile was not satisfied with the phrasing of the motion. Therefore, a request is made to adopt and vote upon the following recommended motion: A motion is made to enter into an agreement with Mercantile Bank to implement a business credit card program; to authorize Kyle Gibson, as Office Manager, and Carol DeHaan, as Treasurer, to sign agreements and manage the card program. 2023-06-06 SMBA Board Packet | Page 24 of 44 Summary of Options Relating to the Discussion of Health Care As of 4/21/2023 Options: 1. Require employees to be enrolled in the BCBS plan if they are eligible (i.e. full-time employees), do not offer an opt-out option. a. Legal opinion? Are we required to offer an opt-out? 2. Offer a taxable cash payment in lieu of group coverage. a. Wide range of options here. Could be based on what the Authority is currently spending on healthcare, based on what the actual cost to employees would be, or some other criteria. 3. Individual Coverage Healthcare Reimbursement Arrangement (“ICHRA”). 4. Some other form of Healthcare Reimbursement Arrangement. Providers Contacted & Opinions / Suggestions: 1. Ted Hartleb Agency / Geoff Lansky a. Recommended taxable cash payment in lieu of group coverage if the Authority is not able to continue with the BCBS plan. b. Advised that the administrative fees associated with an ICHRA would not be responsible for such a small number of participants. 2. Burnham Flower a. Not a viable option – group size. 3. Home Builders Association a. Not a viable option. 4. Nulty Insurance a. Submitted contact form submission on website, awaiting response. 5. Small Business Administration a. Not a viable option. 6. West Michigan Health Insurance Pool (Used by Texas Township, AKA “Consortium” option). a. Not a viable option – group size. 7. West Michigan Insurance Advisors LLC a. Submitted contact form submission on website, awaiting response. 2023-06-06 SMBA Board Packet | Page 25 of 44 Southwest Michigan Building Authority Kalamazoo County, Michigan FINANCIAL STATEMENTS Year ended December 31, 2022 DRAFT 2023-06-06 SMBA Board Packet | Page 26 of 44 CONTENTS Page INDEPENDENT AUDITOR’S REPORT 1 MANAGEMENT’S DISCUSSION AND ANALYSIS 2 ‐ 4 BASIC FINANCIAL STATEMENTS Statement of net position 5 Statement of activities 6 Statement of cash flows 7 Notes to financial statements 8 ‐ 10 DRAFT 2023-06-06 SMBA Board Packet | Page 27 of 44 SEBER TANS, PLC CONSULTANTS & CERTIFIED PUBLIC ACCOUNTANTS 555 W. Crosstown Parkway, Suite 304 Kalamazoo, Michigan 49008 Phone (269) 343-8180 www.sebertans.com Fax (269) 343-5419 INDEPENDENT AUDITOR’S REPORT Members of the Board of Southwest Michigan Building Authority Opinion We have audited the accompanying financial statements which consist of a single enterprise fund, of Southwest Michigan Building Authority (the Authority) as of and for the year ended December 31, 2022, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statement as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Southwest Michigan Building Authority, as of December 31, 2022, and the respective change in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. DRAFT 2023-06-06 SMBA Board Packet | Page 28 of 44 ‐1‐ In performing an audit in accordance with generally accepted auditing standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Seber Tans, PLC Kalamazoo, Michigan June 6, 2023 DRAFT 2023-06-06 SMBA Board Packet | Page 29 of 44 MANAGEMENT’S DISCUSSION AND ANALYSIS DRAFT 2023-06-06 SMBA Board Packet | Page 30 of 44 Southwest Michigan Building Authority MANAGEMENT’S DISCUSSION AND ANALYSIS The following discussion and analysis is intended as a narrative overview of the Southwest Michigan Building Authority’s (the Authority) operations over the two recent fiscal years and its financial condition on December 31, 2022. Please read it in conjunction with the Authority’s financial statements. FINANCIAL HIGHLIGHTS  The Authority’s total net position decreased by $28,614 in 2022.  Total net position was reported in the amount of $813,100 at December 31, 2022, with unrestricted net position of $773,002. Overview of the financial statements The Statement of Net Position reports all of the Authority’s assets and liabilities, along with the difference between the two, which is identified as the net position. Over time, increases or decreases in net position may serve as a useful indicator as to whether the Authority’s financial position is improving or deteriorating. However, other factors must also be considered when evaluating the overall financial position. The Statement of Activities shows how the Authority’s net position changed during the fiscal year. All changes in net position are reported when the underlying events giving rise to the changes occur, regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. earned but unused vacation leave). This statement should help the reader to answer the question: Is the Authority better or worse off as a result of this year’s activities? The Statement of Cash Flows presents the Authority’s cash receipts and disbursements during the fiscal year, classified by principal sources and uses. Funds The accounts of the Authority are organized within a single fund, its Operating Fund. This fund accounts for the expenses involved in providing inspection services to customers within the member townships who are charged fees to recover the costs of operation. This fund uses accrual accounting, which is the same method used by private‐sector businesses. The notes to the basic financial statements provide additional information that is necessary to understand the data reported in the financial statements. FINANCIAL ANALYSIS OF THE AUTHORITY AS A WHOLE Net position Net position may serve, over time, as a useful indicator of the Authority’s financial position. In the Authority’s case, assets exceeded liabilities at the end of fiscal year 2022 by $813,100 compared to $841,714 at the end of fiscal year 2021. The Authority’s investment in capital assets, a component of the total net position, amounts to $40,098 at the end of fiscal year 2022, compared to a balance of $37,346 for the end of fiscal year 2021. The Authority uses these capital assets to provide essential services to its customers; consequently, these assets are not available to be liquidated for future spending needs. ‐2‐ DRAFT 2023-06-06 SMBA Board Packet | Page 31 of 44 Southwest Michigan Building Authority MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Changes in net position The Authority’s total revenues of $563,475 in 2022 were $99,961 lower than total revenues in 2021 ($663,436). The Authority’s operating revenues come from its customers for building and trade inspections, and plan review fees. These charges comprise 99 percent of the Authority’s revenues. Total 2022 expenses of $592,089 were $59,005 higher than 2021 expenses ($533,084). Revenues decreased as fewer commercial permits were issued in 2022. Expenses increased primarily due to an increase in personnel costs due to increased hours in 2022. ‐3‐ 2022 2021 Current assets $ 817,154 805,536 $ Capital assets 40,098 37,346 Total assets 845,634 854,500 Current liabilities 32,534 12,786 Net assets: Investment in capital assets 40,098 37,346 Unrestricted 773,002 804,368 Total net position $ 813,100 $ 841,714 Condensed financial information Net position 2022 2021 Operating revenues $ 560,189 $ 662,183 Nonoperating revenues: Interest 3,286 1,253 Total revenues 563,475 663,436 Operating expenses 592,089 533,084 Change in net position $ (28,614) $ 130,352 Net position at end of year $ 813,100 $ 841,714 Condensed financial information DRAFT Changes in net position 2023-06-06 SMBA Board Packet | Page 32 of 44 Southwest Michigan Building Authority MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) The total cost of the Authority’s operations amounted to $592,089 during the period ended December 31, 2022. The Authority’s most significant expenses were personnel costs (31 percent) and contractual inspection services (22 percent). CAPITAL ASSETS AND DEBT ADMINISTRATION Capital assets The Authority’s investment in capital assets was as follows: The Authority acquired a new 65 inch plan review monitor for $11,371 during 2022. More detailed information about the Authority’s capital assets is presented in Note 3 of the notes to the financial statements. Debt The Authority had no debt at the beginning or end of the period. ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES The Authority continues to develop uniform processes and information to implement the combination of inspections activities within its member townships and to actively recruit new municipal members. CONTACTING THE AUTHORITY’S FINANCIAL MANAGEMENT Questions regarding any information provided in this report or requests for additional financial information should be addressed to: Southwest Michigan Building Authority 7275 West Main Street Kalamazoo, MI 49009 ‐4‐ 2022 2021 Equipment $ 18,099 $ 10,715 Vehicles 21,999 26,631 Totals $ 40,098 $ 37,346 DRAFT 2023-06-06 SMBA Board Packet | Page 33 of 44 BASIC FINANCIAL STATEMENTS DRAFT 2023-06-06 SMBA Board Packet | Page 34 of 44 Southwest Michigan Building Authority STATEMENT OF NET POSITION December 31, 2022 ASSETS Current assets: Cash $ 783,381 Prepaid items 22,155 Total current assets 805,536 Noncurrent assets ‐ capital assets, net of accumulated depreciation 40,098 Total assets 845,634 LIABILITIES Current liabilities: Accounts payable 28,815 Accrued payroll 3,719 Total liabilities 32,534 NET POSITION Investment in capital assets 40,098 Unrestricted 773,002 Total net position $ 813,100 ‐5‐ See notes to financial statements DRAFT 2023-06-06 SMBA Board Packet | Page 35 of 44 Southwest Michigan Building Authority STATEMENT OF ACTIVITIES Year ended December 31, 2022 OPERATING REVENUES Permits and inspections: Building $ 268,719 Electrical 88,610 Mechanical 100,462 Plumbing 52,839 Plan review fees 48,364 Other 1,195 Total operating revenues 560,189 OPERATING EXPENSES Personnel costs 183,961 Employee benefits 90,166 Contracted inspections: Building 11,950 Electrical 43,150 Mechanical 42,900 Plumbing 29,900 Site plan reviews 47,970 Professional services 30,755 Computer support and operations 50,001 Operating supplies 5,279 Resource materials 4,191 Maintenance and utilities 4,547 Insurance 8,818 Telephone 3,067 Vehicle expense 3,533 Shared building cost 22,000 Miscellaneous 1,282 Depreciation 8,619 Total operating expenses 592,089 OPERATING INCOME (LOSS) (31,900) NONOPERATING REVENUES Interest 3,286 CHANGE IN NET POSITION (28,614) NET POSITION ‐ BEGINNING 841,714 NET POSITION ‐ ENDING $ 813,100 ‐6‐ See notes to financial statements DRAFT 2023-06-06 SMBA Board Packet | Page 36 of 44 Southwest Michigan Building Authority STATEMENT OF CASH FLOWS Year ended December 31, 2022 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and members $ 560,189 Payments to vendors and suppliers (381,556) Payments to employees (183,879) Net cash provided by operating activities (5,246) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of fixed assets (11,371) CASH FLOWS FROM INVESTING ACTIVITIES Interest received 3,286 NET INCREASE IN CASH (13,331) CASH ‐ BEGINNING 796,712 CASH ‐ ENDING $ 783,381 Reconciliation of operating income to net cash provided by (used in) operating activities: Operating income (loss) $ (31,900) Adjustments to reconcile operating income to net cash provided by (used in) operating activities: Depreciation 8,619 (Increase) in: Prepaid expenses (1,713) Increase in: Accounts payable 19,666 Accrued payroll 82 Net cash provided by operating activities $ (5,246) See notes to financial statements ‐7‐ DRAFT 2023-06-06 SMBA Board Packet | Page 37 of 44 Southwest Michigan Building Authority NOTES TO FINANCIAL STATEMENTS NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Southwest Michigan Building Authority (the Authority) conform to accounting principles generally accepted in the United States of America (hereinafter referred to as generally accepted accounting principles) as applicable to governmental units. The following is a summary of the more significant accounting policies. Reporting entity: As required by generally accepted accounting principles, these financial statements present the Authority (located in Kalamazoo County); management has determined that there are no other entities for which the Authority is financially accountable. These financial statements include all the operations of the Authority, a municipal joint venture. The Authority was created under the provisions of Public Act 7 of 1967 (Ex. Sess.), as amended, through an agreement entered into by the Charter Townships of Oshtemo and Cooper. The purpose of the Authority is to administer and enforce the Michigan State Construction Code within its member townships. Basis of accounting: The Authority uses the accrual basis of accounting to account for its operations. Revenues are recognized when permits are issued, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Operating revenues and expenses: The Authority distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services in connection with principal ongoing operations. Operating revenues represent charges to customers for sales and services. Operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Assets, liabilities, and net position: Cash ‐ Cash is considered to be demand deposits, time deposits, and short‐term investments with original maturities of three months or less from the date of acquisition. Capital assets ‐ Capital assets, which include property, equipment, and vehicles, are defined by the Authority as assets with an initial, individual cost of more than $2,500 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets are depreciated using the straight‐line method over the following estimated useful lives: ‐8‐ Equipment 5 ‐ 10 years Vehicles 5 ‐ 7 years Software 3 years DRAFT 2023-06-06 SMBA Board Packet | Page 38 of 44 Southwest Michigan Building Authority NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, liabilities, and net position (continued): Net position ‐ Net position represents the difference between assets and liabilities. The Authority currently reports two categories of net position, as follows: (1) Investment in capital assets consists of net capital assets reduced by outstanding balances of any related debt obligations attributable to the acquisition, construction, or improvement of those assets; and (2) Unrestricted net position consists of all other net position that does not meet the definition of the above component and is available for general use by the Authority. Use of estimates ‐ The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Accordingly, actual results could differ from those estimates. NOTE 2 ‐ CASH State statutes and the Authority’s investment policy authorize the Authority to make deposits in the accounts of federally‐ insured banks, credit unions, and savings and loan associations. The Authority’s deposits are in accordance with statutory authority. As of December 31, 2022, the Authority had deposits with carrying amounts of $783,131, and cash on hand of $250. Custodial credit risk is the risk that, in the event of the failure of a financial institution, the Authority will not be able to recover its deposits. The Authority’s investment policy does not specifically address custodial credit risk for deposits. At December 31, 2022 $131,665 of the Authority’s bank balances of $783,186 was exposed to custodial credit risk because it was uninsured and uncollateralized. NOTE 3 ‐ CAPITAL ASSETS Capital asset activity for the year ended December 31, 2022 was as follows: ‐9‐ Beginning Ending balance Increases Decreases balance Capital assets being depreciated: Equipment 25,000 $ 11,371 $ ‐ $ 36,371 $ Vehicles 32,421 ‐ 32,421 ‐ Software ‐ 15,040 ‐ 15,040 Subtotal 72,461 ‐ 11,371 83,832 Less accumulated depreciation for: Equipment (14,285) (3,987) ‐ (18,272) Vehicles (5,790) (4,632) ‐ (10,422) Software (15,040) ‐ ‐ (15,040) Subtotal (35,115) ‐ (8,619) (43,734) Total capital assets being depreciated, net $ 37,346 2 $ ‐ ,752 $ 40,098 $ DRAFT 2023-06-06 SMBA Board Packet | Page 39 of 44 Southwest Michigan Building Authority NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 4 ‐ RISK MANAGEMENT The Authority is exposed to various risks of loss related to property loss, torts, errors and omissions, employee injuries (workers’ compensation), and medical benefits provided to employees. The Authority has purchased commercial insurance for each of these claims and is neither self‐insured, nor participates in a shared‐risk pool. During the past three fiscal years, settlements did not exceed insurance coverage. NOTE 5 – DEFERRED COMPENSATION PLAN The Authority offers its employees a deferred compensation plan created in accordance with Internal Revenue Code, Section 457. The assets of the plan were held in trust (custodial account or annuity contract), as described in IRC Section 457(g) for the exclusive benefit of the participants (employees) and their beneficiaries. The custodian thereof for the exclusive benefit of the participants holds the custodial account for the beneficiaries of this Section 457 plan, and the assets may not be diverted to any other use. The administrators are agents of the employer for purposes of providing direction to the custodian of the custodial account from time to time for the investment of the funds held in the account, transfer of assets to or from the account, and all other matters. In accordance with the provisions of GASB Statement 32, plan balances and activities are not reflected in the Authority’s financial statements. NOTE 6 ‐ RELATED PARTY TRANSACTIONS The Authority rents office space and pays for attorney services from the Charter Township of Oshtemo, which is a member unit. During the period ended December 31, 2022, the Authority paid the Charter Township of Oshtemo $22,000 and $18,160, respectively, for rent and attorney services. NOTE 7 – SUBSEQUENT EVENTS Management has evaluated subsequent events through June 6, 2023, the date on which the financial statements were available to be issued. NOTE 8 ‐ PENDING ACCOUNTING PRONOUNCEMENT In May 2020, the GASB issued Statement No. 96, Subscription‐based Information Technology Arrangements. This Statement provides guidance on the accounting and financial reporting for subscription‐based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right‐to‐use subscription asset ‐ an intangible asset ‐ and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended. The Authority is currently evaluating the impact this standard will have on the financial statements when adopted during the 2023 fiscal year. ‐10‐ DRAFT 2023-06-06 SMBA Board Packet | Page 40 of 44 SEBER TANS, PLC CONSULTANTS & CERTIFIED PUBLIC ACCOUNTANTS 555 W. Crosstown Parkway, Suite 304 Kalamazoo, Michigan 49008 Phone (269) 343-8180 www.sebertans.com Fax (269) 343-5419 June 6, 2023 To the Board of Southwest Michigan Building Authority Oshtemo, Michigan We have audited the financial statements of Southwest Michigan Building Authority (the Authority) for the year ended December 31, 2022 and have issued our report thereon dated June 6, 2023. Professional standards require that we provide you with the information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We previously communicated such information to you. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Authority are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year. We noted no transactions entered into by Southwest Michigan Building Authority during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the Authority’s financial statements was: Management’s estimate of depreciation based on the economic useful lives of the assets. We evaluated the key factors and assumptions used to develop this estimate in determining that they are reasonable in relation to the financial statements taken as a whole. The financial statements disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. We detected no such misstatements during our audit. DRAFT 2023-06-06 SMBA Board Packet | Page 41 of 44 To the Board of Southwest Michigan Building Authority June 6, 2023 2 Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated June 6, 2023. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Authority’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Authority’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This information is intended solely for the use of the Board, Director, and Management of the Authority and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Seber Tans, PLC DRAFT 2023-06-06 SMBA Board Packet | Page 42 of 44 SEBER TANS, PLC CONSULTANTS & CERTIFIED PUBLIC ACCOUNTANTS 555 W. Crosstown Parkway, Suite 304 Kalamazoo, Michigan 49008 Phone (269) 343-8180 www.sebertans.com Fax (269) 343-5419 June 6, 2023 To the Board of Southwest Michigan Building Authority Oshtemo, Michigan In planning and performing our audit of the financial statements Southwest Michigan Building Authority (the Authority) as of and for the year ending December 31 2022, in accordance with auditing standards generally accepted in the United States of America, we considered Southwest Michigan Building Authority’s internal control over financial reporting (internal control) as a basis for designing our auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified a deficiency in internal control that we consider to be a significant deficiency. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. We did not identify any deficiencies in internal control that we consider to be material weaknesses. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the following deficiency in internal control to be a significant deficiency: Segregation of Duties Internal controls are designed to safeguard assets and help to prevent and detect losses from employee dishonesty or error. A fundamental concept in an effective system of internal control is the segregation of duties. To maintain proper segregation of duties, no employee should be responsible for two or more of the following functions for a single transaction: 1) Record Keeping – the creation and maintenance of accounting records; 2) Asset Custody – access to and/or control of physical assets; 3) Authorization – reviewing and approving transactions and 4) Reconciliation – assurance that transactions are proper. The Authority has a limited number of employees, which contributes to the lack of segregation of duties. The Office Manager can receive, log, record receipts and revenues, and make bank deposits all before the outside accountant performs bank reconciliations. Because of these incompatible duties, errors or fraud may occur and not be detected by internal accounting controls. We recommend that management and the Board of Directors continue to explore ways of segregating duties of the Office Manager. DRAFT 2023-06-06 SMBA Board Packet | Page 43 of 44 To the Board of Southwest Michigan Building Authority June 6, 2023 2 This communication is intended solely for the information and use of the Board of Southwest Michigan Building Authority, and is not intended to be, and should not be, used by anyone other than these specified parties. Seber Tans, PLC DRAFT 2023-06-06 SMBA Board Packet | Page 44 of 44