Traverse City Record-Eagle

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December 3, 2013

Grand Traverse to hold pension bond hearings

TRAVERSE CITY — The Grand Traverse County Commission will host public hearings on the 2014 budget and a proposal to borrow more than $40 million to cover pension obligation costs during a committee meeting Wednesday night.

The public budget hearing comes after protracted debate among commissioners on how best to resolve a shortfall of about $1.5 million in the 2014 budget. The most recent proposed budget changes include allocating roughly $1 million in fund balance to close a sizable part of the gap.

What isn’t clear is whether board members will approve a final budget after the hearing.

Commissioner Larry Inman said he hopes the budget is a done-deal after Wednesday night. There’s only about three weeks until the end of the year, and county department heads need time to plan around whatever budget changes the commission settles on, he said.

“My hope is we will stay there as long as necessary to pass that budget,” Inman said.

Other board members are not ready to sign off on a final budget just yet. Commissioner Dan Lathrop said he wants more time to review the latest set of recommended budget changes.

Board Chair Herb Lemcool said he won’t vote for any plans that use fund balance to close the 2014 budget gap.

Lemcool supports selling pension obligation bonds to shore up the 2014 budget and to stabilize the county’s pension payments in future years.

Other commissioners are skeptical of the pension bonding proposal. They fear it’s based on unrealistic market returns and interest rate projections and could end up costing taxpayers more money in the long run.

The pension bonding proposal will be discussed during a separate public hearing Wednesday night. Both hearings will take place during a 7 p.m. meeting at the Governmental Center.

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