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Washtenaw County commissioners' retirement benefits, travel expenses talk of annual meeting:
In 1984 the County established the Money Purchase Pension Plan (MPPP), which was a defined contribution pension plan but in 2008 and 2009 they transferred nearly all of the participants into the defined benefit pension plan, which contributed greatly to the underfunding of the pension fund.
“Over the last year, as a result of collective bargaining, the county has transferred nearly all active members from the Money Purchase Pension Plan to the Washtenaw County Employees’ Retirement System. In an attempt to further reduce administrative expenses and move toward closure of the MPPP, former participants have been encouraged to withdraw or transfer their assets. The board of commissioners is the only remaining active participants making contributions and receiving employer contributions under the MPPP.”
Washtenaw County retiree pension and benefit plans underfunded by nearly $240M
There have been warning signs for years but the County administrator has downplayed them.
“McDaniel said the county is working collaboratively with its labor unions to bring costs down. But she said the fact that the county has the burden of those future liabilities isn't anything to be ashamed of — the county is proud to invest in its employees' futures and provide the kind of benefits they deserve.”
Washtenaw County considers borrowing unprecedented $345M to cover its retiree benefits:
First public discussion of the retirement bond proposal
Washtenaw County commissioners postpone discussion on $345M bond issue:
John Axe, the County’s bond Counsel tries to sell the Commissioners on the idea that they will make money in the stock market.
“The county’s bond counsel has claimed it would reduce the county’s expenditures by $112 million over the next 25 years.”
County commissioners seek more input from public, professionals as they consider issuing $345M in debt:
The Board of Commissioners invite several experts to present at their working session
County board: $345M bond issue to cover debt is 'cash flow management' solution:
Commissioners tell the public that they are not trying to make money in the stock market but just break even. The purpose of the bond issue is to smooth out payments for the retirement costs in order to better manage “cash flow” in the County budget.
County administrator holding public briefing on $345M bond issue:
Verna McDaniel holds meetings to discuss the retirement bond proposal
Commissioners want more information as county considers bond issue to cover retiree benefits
Commissioners delay vote on the retirement bond proposal to get more information and more input from the public.
Public voices opposition to county board on potential bond issue:
Petition drive to put the retirement bond proposal on the ballot announced at the June 10, 2013 meeting of the Board of Commissioners.
Washtenaw County board chairman postpones vote on massive bond issue for second time:
The Washtenaw County Board of Commissioners removes the vote on the retirement bond initiative from the June 10 and June 24, 2013 meeting agendas.
Guest Column: A better alternative to Washtenaw County's $345 Million bond issue plan
President of University Bank, Stephen Ranzini, proposes that the County buy pension annuities from an insurance company, which would transfer the investment risks to the insurance company and may cost less than the proposed bond.
Ann Arbor Chronicle
Proposal coming to issue up to $350 million in bonds to fund county's pension & retiree healthcare liabilities; board to be briefed on May 2
The proposal is for a 25-year bond issue of up to $350 million to fully fund the county’s pension and retiree healthcare plans – the Washtenaw County Employees’ Retirement System (WCERS) and Voluntary Employees Beneficiary Association (VEBA).
County Board Debates $345M Bond Proposal:
“John Axe of Axe & Ecklund, a Grosse Pointe Farms attorney who has served as the county’s bond counsel for decades, helped craft the state legislation that permits this type of bonding. He was on hand at the working session to describe the proposal and answer questions. “If you don’t issue the bonds,” Axe said, “you’re going to have horrible budget problems.”
County administrator Verna McDaniel has advocated for this move, in part to make long-term budgeting easier by having predictable bond payments. She raised the proposal publicly for the first time at the board’s April 17, 2013 meeting. However, Axe told commissioners that he’d been asked by the county administration to start looking into this possibility in November of 2012. He also met earlier this year with the board in closed session, when labor negotiations were discussed.
During the May 2 working session, several commissioners referred to the fact that the new 10-year labor deals approved earlier this year had been key to moving forward with this bond proposal. Allusions to that connection have been made at previous board meetings, but not directly stated. The crucial point was closing the defined benefit plan to employees hired after Jan. 1, 2014. Unless the defined benefit plans were closed, the county would not have been allowed by law to proceed with this type of bonding.”
County Delays First Step in Bond Proposal:
“At the May 15, 2013 meeting of Washtenaw County board of commissioners, board chair Yousef Rabhi pulled from the agenda a resolution related to a $345 million bond proposal, pushing back a process that was originally scheduled to start that evening. The proposed bond issue – the largest in the county’s history – is intended to cover unfunded pension and retiree healthcare obligations.”
County to Push Back Vote on Bond Proposal
Washtenaw County board chair Yousef Rabhi cites concerns from public, commissioners; uncertain state approval process also a factor
County Gets Input on Bonding, Despite Delay:
On July 10, more than a half dozen people spoke at the public 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. In addition to the speakers, several other members of the Washtenaw Watchdogs – many of them wearing the group’s T-shirt – attended the meeting.
The Saline Reporter
Residents calling for $295 million bond proposal to be put on ballot (WITH VIDEO):
County Administrator, Verna McDaniel says that she doesn’t want to confuse voters by putting the bond issue on the ballot
New York Times
Billions in Debt, Detroit Tumbles Into Insolvency:
“Numerous factors over many years have brought Detroit to this point, including a shrunken tax base but still a huge, 139-square-mile city to maintain; overwhelming health care and pension costs; repeated efforts to manage mounting debts with still more borrowing; annual deficits in the city’s operating budget since 2008; and city services crippled by aged computer systems, poor record-keeping and widespread dysfunction.
Detroit Gap Reveals Industry Dispute on Pension Math:
“Until mid-June, there was one ray of hope in Detroit’s gathering storm: For all the city’s problems, its pension fund was in pretty good shape. If the city went under, its thousands of retired clerks, police officers, bus drivers and other workers would still be safe.
Then came bad news. Seemingly out of nowhere, a $3.5 billion hole appeared in Detroit’s pension system, courtesy of calculations by a firm hired by the city’s emergency manager.”