Public Hearing Held For Halted Bond Proposal

Though a controversial bond proposal had been pulled from the agenda last week, the Washtenaw County board of commissioners held a previously scheduled public hearing for that proposal at its July 10, 2013 meeting. The bonding of potentially up to $345 million was intended to cover unfunded pension and retiree healthcare obligations. The board had set the public hearing at its meeting on June 5, 2013, and had also intended to take initial votes on July 10 on several items related to the bonding.

However, on Wednesday, July 3, board chair Yousef Rabhi and county administrator Verna McDaniel issued a joint statement announcing a decision not to put the bond-related items on the July 10 agenda. They 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. [See Chronicle coverage: "County to Push Back Vote on Bond Proposal."]

Another public hearing on the bond proposal had been held on June 5. That 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. More than a half dozen people also spoke at the July 10 hearing, as well as during two opportunities for public commentary. Many of the speakers were affiliated with a group called the Washtenaw Watchdogs, which has raised concerns about the bonding and is prepared to launch a petition drive that would force the proposal to be put on the ballot for voters to approve. Doug Smith, one of the group’s organizers, told commissioners that the Washtenaw Watchdogs will have a booth at the Ann Arbor art fairs, and is recruiting volunteers.

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.

It’s unclear what actions might be taken next. The administration has previously stated that the bonding proposal was crucial to developing a four-year budget from 2014-2017. The administration has set a goal of identifying $6.99 million in structural reductions for the overall 2014 general fund budget, based on the assumption that the bonding would take place. Without the bonding, the county had expected to pay an estimated $30 million contribution toward these obligations in 2014, with additional amounts varying in subsequent years.

The board had also voted to hold an extra meeting this month, on July 24. That meeting will be held as planned, but instead of bonding, the main topic will be a discussion of budget priorities.

This brief was filed from the boardroom of the county administration building at 220 N. Main St. in Ann Arbor. A more detailed report will follow: [link]