Budget Agreement Contains More Flexible EVIP Language

Posted on May 29, 2013 by Dene Westbrook

The budget agreement reached yesterday by the House and Senate includes more flexible language for the Economic Vitality Incentive Program (EVIP). The language is viewable in the budget bill beginning on page 121.

The new EVIP language expands eligibility for EVIP grant projects to include those projects in which a local unit of government shares services with a university, community college, authority, school district, or intermediate school district.

In Category 1, accountability and transparency (dashboards), the language is similar to last year; however, it does also require a detailed listing of debt service requirements. The dashboard information must be submitted to the Department of Treasury by October 1 to comply with EVIP.

Category 2, consolidation of services, includes “innovation” and “privatization”. So while a local unit must still submit a new plan under this provision, it can include an innovative practice of an existing service or privatization of service to be eligible for category 2.

The “timeline” piece in category 2 has been an issue with the Department of Treasury calling communities to follow up on that piece. The language now says “estimated timeline” in hopes that it allows more flexibility.

The consolidation plan must be submitted by February 1 to qualify for EVIP.

Category 3 has been dramatically changed to “unfunded accrued liability plan”.  This would require a local unit with unfunded accrued liabilities as of its most recent audited financial report related to employee pensions or other post-employment benefits shall submit a plan to lower all unfunded accrued liabilities. The plan shall include a listing of all previous actions taken to reduce its unfunded accrued liabilities with an estimated cost savings of those actions; a detailed description of how it will continue to implement and maintain previous actions taken; and a listing of additional actions it could take. If no actions have been taken to reduce its unfunded accrued liabilities, it shall provide a detailed explanation of why no actions have been taken and a listing of actions it could implement to reduce unfunded accrued liabilities. Actuarial assumption changes and issuance of debt instruments shall not qualify as a new proposal. The unfunded accrued liabilities plan must be made available in the clerk’s office or on the website.

If a local unit does not have any unfunded accrued liabilities it must certify to the Department of Treasury that it has none.

The unfunded accrued liabilities plan must be submitted to the Department by June 1.

This new EVIP language goes into effect October 1, 2013.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at [email protected]

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