BLOOMFIELD TOWNSHIP (AP) – An Oakland County community could become one of the first in the state to issue bonds to pay for retiree pensions or health care.
Bloomfield Township’s board of trustees voted 7-0 last month to proceed with the planned sale of bonds before the end of the year, with township officials saying the bond sale could save taxpayers $60 million to $80 million over the next two decades.
The proposed bond issuance is made possible by a state law signed by Gov. Rick Snyder in October. It amends a 2001 state statute that governs how municipalities may sell bonds to raise funds other than by taxation.
The new law allows bond sales to cities, villages and townships, but only if they have excellent credit – a minimum AA bond rating – and only if they have closed their pension plans to new participants. Bloomfield Township meets the requirements, township officials said.
“Everyone who’s looked at this (says) it’s close to a no-brainer,” township Finance Director Ray Perkins told the Detroit Free Press.
Trustees voted to sell as much as $85 million in bonds. The money would be invested, and the account would be used to pay off the amounts due to township pensioners over the next two decades, Perkins said.
The savings comes from the increase in the pension plan’s expected investment returns, which are made possible by the funds provided by the bond sale, he said.
Some residents aren’t sold on the idea.
“I’m horrified,” said Jenny Greenwell, a township resident since 1987.
“I don’t think any municipality or school district should have the ability to take on additional debt without the permission of taxpayers,” Greenwell said. “More debt never solves a problem.”
Perkins said: “Anyone who opposes this doesn’t understand it.”
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