Commerce Township trustees set reserve targets for general, police and fire funds

At its Jan. 28 quarterly meeting, the Charter Township of Commerce Board of Trustees reached consensus on target reserve levels, aiming for six months of operating costs in the general, police and fire funds and four months for the library and parks funds.

Trustee George Weber and others said larger reserves would protect township services and infrastructure from unexpected revenue shortfalls or one-time costs. The board discussed prioritizing funds by public safety and community services, and agreed to review fund balances at the close of 2024 and work the targets into the 2026 budget cycle.

The discussion covered a list of township funds trustees said should be considered when setting targets: general fund; road improvement fund; fire; sheriff; building and improvement; cemetery; historic fund; library; parks and open space; debt service; sewer and water; and the Building Department fund (auditors treat the latter as part of the general fund). Trustee Rick Sovel urged the board to identify contractual obligations and noticing requirements for each fund so those liabilities are accounted for when setting targets. "The Township should also identify any contractual obligations and noticing requirements and make sure to fund those obligations and contracts within each subdivision of the general ledger," Sovel said.

Treasurer Molly Phillips told trustees that municipal auditors generally will not set specific reserve targets for a township because "there are too many variables between municipalities." Phillips recommended treating the targets as guidance rather than legally binding requirements, noting a formal resolution could require frequent amendments if circumstances prevented meeting the target in a given year.

Trustees discussed possible tiers: six months for the top three funds (general, police and fire), four months for library and parks, and shorter targets for other funds. Trustee Robert Long said that, if resources were constrained, the township should still prioritize police, fire and basic services such as garbage collection. Supervisor Larry Gray asked trustees to review the materials Treasurer Phillips provided and said the board would revisit the topic at the regular March meeting using Orion Township as a template.

The board did not adopt a formal ordinance or resolution at the meeting; trustees recorded a policy direction and consensus to pursue the targets and directed staff to return with specific numbers and budget implications.