The more Margaret Birch undertakes, the more she thrives. Not only does she assume a demanding job as treasurer for Waterford Township, the largest township in Oakland County, but she is a member of the Waterford Chamber of Commerce Board of Directors, a member of the International Association of Public Treasurers of the U.S. and Canada, a board member for the Oakland County Treasurers Association, and serves on several internal boards within Waterford Township. Her astute decision-making and tireless involvement in municipal government has earned her the title of director for the Michigan Municipal Treasurers Association, as voted by her peers throughout the state. She and her husband have lived in Waterford for over 30 years.
Tell us about your tenure as treasurer in Waterford Township and how long have you have been in the field?
MB: I was actually elected in 2006 — I finished out the term of a former treasurer. I was re-elected in 2008. My prior experience that prepared me for being the treasurer — I was on the Oakland County Pension Board for approximately 12 years and also served on the Waterford general pension board for eight years. I was also in the banking industry and worked in the Oakland County Treasurer’s office.
As the new director of the Michigan Municipal Treasurers Association, tell us what the association does, and what will your role be?
MB: The association is an educational association. The MMTA’s mission is to provide membership with tools to meet the diversified challenges facing us by the education, the services, and continued development and ethical standards. By being a member you have access to the 800+ members across the state via listservs that pose daily questions and give answers. You get a quarterly newsletter, employment postings, education, and also awards and certifications. The treasurers association, and all the treasurer associations, because I’m actually a board member on the Oakland County Treasurers Association, as well as the national association — it’s such a camaraderie. All of us realize the importance of having well-educated treasurers.
Why are these memberships important to municipalities?
MB: Being a member of the MMTA, we are probably the largest membership for the national association and by my being on the national association, (they call it an international association because it includes Canada), we are privy to so much education that we can use in our association. I’m hoping we can collaborate with the national association to utilize their tools to help us with education and with issues and concerns in our municipalities.
You are head of payroll and benefits for the township and sit on the retiree health board. Share with us why you established a trust for municipal employees’ retirement healthcare?
MB: I came from the county and the county is probably the leader in establishing a retirement health care board. When I came here there wasn’t an independent trust for healthcare. I wanted to ensure that those funds were only used for post retirement healthcare so I established the trust. That way those funds can only be used for that.
What’s currently in the fund, and how has that been beneficial for both the township and the employees themselves.
MB: Currently there’s over $6 million in the fund. We haven’t’ had to touch any of those funds so far, but when the need comes, we can. It gives the employees some comfort, I would think, that they have some money put aside for healthcare. We still have a high-funded liability as far as healthcare goes, which is not unusual because most municipalities that give retiree healthcare all have large unfunded liability. You don’t fund the unfunded liability like you do for the regular pension. It’s not a mandated unfunded liability contribution.
You’ve also conducted a number of educational seminars for township employees. Give us some examples and the benefit.
MB: I have given our employees Wildon Trust, so I had two attorneys from the area to come in here. They don’t get to promote their firm or anything but stress to the employees the importance of getting their lives in order. I’ve also done seminars on identity theft for employees and the senior center. I’ve also done seminars for the employees on financial planning. I think it’s so important so they know that everything in their life affects how they plan for the future, especially when you’re planning on retiring early. You need to have a financial plan in place so you can know if you really can retire and if you have enough to sufficiently support your future.
As a member of the township Defined Contribution System Board, it was decided that all new hires now are under a defined contribution benefit system, except police and fire personnel. Please state why those employees are exempt and why the switch?
MB: We went to the switch to the defined contribution, which was actually before I came here in 2005, because of the legacy costs. Defined benefits and defined contribution is different because the township puts in a certain portion (under a defined contribution system), but it’s not a pension. Our police and fire are still unionized. The general employees are not, except some Teamsters, but all our general employees — new ones are hired under the defined contribution because of the (lower) costs. It’s such a high cost. I know everyone is aware of the unfunded liability of a lot of pension plans. Waterford pension plans are generally really in good status. It’s 80 some percent funded. Police and fire is over 70 percent funded, which is still good because our police officers and firefighters retire at an earlier age.
Why do you serve on so many boards and associations, and what do you find the most rewarding?
MB: For different reasons. I serve on the Oakland County Treasurer’s Association Board because that’s all my peers in Oakland County. We have 61 municipalities in Oakland County and we get together and have a lot of the same concerns because a lot of our stuff is handled the same. Being on the state association brings you aware of smaller and larger communities, but we still all have a common goal. Even though some individuals may have a smaller piece of the pie than we have, because we have more population here, we still have all the same issues and the education. It’s a great learning process. I have treasurers who call me from, let’s say, East Tawas to ask me a question, or someone from Independence Township. I think there’s such a camaraderie and educational experience to be had with us all being together like that. There’s over 800 members in the state association.
Record low interest rates may bode well for those who need loans or mortgages, but they cut into interest income for investors, including municipalities. As the township official responsible for managing the investment of public funds, what changes, if any, do you see in investment income, and when will things change.
MB: Interest income has dropped considerably. In 2008 I probably earned over $1 million in interest. Now you’re lucky to get credit enough for your bank fees. The short term investment is hardly anything that’s offered out there, and I don’t see that changing. I think it will be in single digits for the next five to seven years. Other options open to us now: some of our main banks are willing to pay us money and insure our funds. When I went to the national conference this year, Washington has a local government pool for the whole state. One of the smartest things to do is if you deal specifically with one bank for the majority of your funds, put your money in there because your money can actually earn more interest on that account than it can if it went out into let’s say a CD or some other vehicle that won’t earn you as much money and you can’t have it invested for as long as it needs to be to earn any interest. I’m fortunate because the bank I deal with does insure all of my funds and pays me a decent rate.
Is there a need for changes in state law to either forbid or authorize certain investment vehicles in order for municipalities to reap a better return on the investment of public funds in the current economic climate?
MB: No, I don’t think so because public funds are governed under Public Act 20 and we can’t invest in anything that will give us less than what we put in. So say if we invest $1, our return has to be $1 or higher. It’s different than the Public Act 314 or 345, which governs general pensions or police/fire pensions. There you can invest in equity income and get a lot more latitude, but the market constantly goes up and down so you could lose money. We’re not allowed to do that with Act 20.