Cemetery board, bank reps meet
Menominee panel also discusses residency issue
Tuesday, July 09, 2013 7:00 PM
MENOMINEE - The City of Menominee Cemetery Board of Trustees is attempting to eliminate loopholes with residency issues, stave off potential investment speculation on lots and find a way to get a better return on its investments.
Riverside Cemetery currently has about $1.2 million in its perpetual care and flower funds. Concerns were raised last month during a meeting of the trustees about the fees being paid to oversee the accounts. Currently Wells Fargo charges approximately $7,400 a year.
Tuesday, a representative from the bank attended the meeting in person while another spoke and answered questions via a conference call. The two spoke of the current market situation and the performance record of the accounts which are invested in very stable markets.
"In looking at this document, it appears that with the lower rate of return we're getting because of the market, the crash in the market and because interest rates are being held so low that all of our earnings and then some are getting eaten up in fees," said Mayor Jean Stegeman.
The rules for investing taxpayers money are different than for an individual retirement account. People can assume greater risks for greater yields. Such is not the case for accounts like those held by the cemetery. The city has a portfolio policy in place that sets the parameters. The banking representatives suggested the possibility of boosting up the risks a bit to possibly sweeten the bottom line.
"As a former banker, I would not be in favor of risking city money by assuming greater risk for a greater return," said Stegeman. "I do not think that that suggestion was a good one."
Committee Chairman Mike Kaufman suggested soliciting other local banks to see if they could offer a better deal, saying he was less than satisfied with a $500 return for the year on the $100,000 flower account.
"There's two ways to earn more money and one side of it is cutting fees," Stegeman said. "I don't think we should be any less risk averse than we are right now, this is taxpayer money."
City Manager Michael Cramer said he would solicit other local banks to see if there was any interest in the city accounts.
Trustees also discussed ways to get a better handle on lot fees for residents and non-residents and how to deal with the private sale of lots already purchased from the cemetery. Kaufman has been pushing for new rules, especially with a new section destined to open.
"I would like some type of rules in effect there that would protect us in the future from what's going on in the old section," he said. "I guess, too, I would want to know on the resale of the lots, this right of first refusal, at what rate we buy them back. Do we buy them back at what we sold them for or do we buy them back at the current rate?"
Kaufman gave the example of buying a grave 20 years ago for $200 and now it costs $1,100. He questioned whether anyone wishing to sell back their unused grave would have to offer it to the city first for $200 before seeking a higher amount in the free market. He also hinted that with rising costs, there could be speculators buying up hundreds of lots and holding onto them until the market is right to sell them for a profit.
Peg Bastien, who oversees the operations at the cemetery, interjected that the board has taken some steps to prevent grave hoarding.
"The policy this board came up with being able to purchase for immediate family only at the rate of their residency at the time would control that," she said. "The policy is also that you have to designate those spaces."
Cramer suggested the board continue to discuss the right of first refusal and lot transfers and come up with solid policy. To deal with the residency rule, lots could be purchased by residents at a residential rate. If the person being buried in that lot is a non-resident, they would be charged a non-resident interment fee. Non-residents buying lots would be charged non-resident lot and interment fees.
The board also agreed to have the city issue requests for proposals to repair the roof of the cemetery chapel and the entrance gate.