Action on a controversial bond proposal to cover unfunded pension and retiree healthcare obligations will not take place at a July 10, 2013 meeting of the Washtenaw County board of commissioners as had originally been planned. The decision not to put bond-related items on the July 10 agenda was made this week and announced on Wednesday, July 3.
County administrator Verna McDaniel, standing, at a June 27, 2013 public forum to discuss a major bonding proposal. Seated from the left are county commissioners Yousef Rabhi and Andy LaBarre, and former Ann Arbor Public Schools trustee Bob Rorke.
A joint statement by board chair Yousef Rabhi and county administrator Verna McDaniel, posted on the county’s website late Wednesday afternoon, cited the need to address questions and concerns that had been raised by commissioners and the public, as well as uncertainty related to the state approval process that’s required for this type of bonding.
Just last week, McDaniel held a public forum to provide information about the bonding process. At the June 27 forum, which was attended primarily by county staff and former or current elected officials, McDaniel presented only two options: (1) issue bonds to cover the full amount of unfunded liabilities, estimated to total more than $250 million, or (2) implement dramatic cuts in county services and programs.
This had been the administration’s approach since first publicly floating the idea in mid-April, and since work started on the plan privately in November 2012. A website devoted to the bond proposal, posted last month, includes a list of potential cuts to discretionary programs if the bonding did not move forward. The cuts include items like the elimination of 12 sheriff deputy road patrol positions and cutting the Washtenaw Health Plan. [.pdf of discretionary cuts] [.pdf of implications for county funding to outside agencies]
A public hearing on the bond proposal was held on June 5, and the board had voted to schedule another public hearing – to be held on July 10. The June 5 public hearing drew four people who all expressed caution about the possible action, as some attendees suggested a millage or additional budget cuts to cover the retiree obligations – instead of bonding.
Some commissioners have also asked whether alternatives to a bonding approach might also be viable, but the administration has not provided other options. The plan put forward by the administration was to bond for up to $345 million, although officials believed the amount would be lower than that, pending an updated actuarial report. A preliminary report, delivered late last month, has set the total of unfunded liabilities at $295,115,000 according to Rabhi.
This is the second time that action has been pushed back. Items related to the bonding proposal were originally slated for the May 15, 2013 agenda, but Rabhi pulled those items from the agenda after concerns were raised that the process was moving too quickly for adequate public input and board deliberation. [Full Story]