This article is republished from Press & Guide, originally written by Briana Gaskorski and can be found here.
The Dearborn City Council voted Oct. 23 to decide the amount being bonded for post-employment health care funding.
The issue was offered by Councilman Brian O’Donnell and was supported by Councilwoman Leslie Herrick.
The proposed amount for bonding was $35 million, which puts the city at 44 percent funding.
“In January, the original proposal was to bond up to $90 million for post-employment health care,” Dearborn Financial Director James O’Connor said. “We came back in the summertime and talked about a $20 million bond issue. That item was withdrawn by the administration and in September, we discussed a $45 million bond proposal.”
With the state law, Public Act 202, going into effect, each city is required to have a funding level of 40 percent.
“We came and talked about issuing bonds,” O’Connor said. “We updated the asset number, but we didn’t update the liability number so the liability was from 2016 at $226 million while the assets were the current assets on hand at $82 million. This resulted in an unfunded liability of $144 million and a 36 percent funding level. Based on that, with the numbers disjointed from timing, we had an $8.7 million number to get to the 40 percent funding level.”
Councilwoman Erin Byrnes said the process was an important one to undergo.
“This has been a lengthy and complex process, but I think the bottom line is that it is about assigning a dollar value,” Byrnes said. “But it’s also about so much more than that. I think we have the opportunity right now as a council and administration, as well, to set a tone, a positive tone and one that really shows our retirees and our current and future city employees that we value the work that they do.”
Being at a 44 percent funding level, Councilman Mike Sareini said that allows the city to have some cushioning without being able to take their eye off the ball.
“Had we gone with the bonding option of $45 million at a 48 percent funding level, it left us too much room to overlook it when doing budgeting every year and then we would be right back here in five years doing this exact same thing but without the option to bond,” he said.
Councilman Robert Abraham said he would like to have a larger bond than $35 million.
“I’m fully supporting the $35 million because I think it’s a great place to be at this point,” he said.
Eric Cullum, president of the Dearborn Police and Fire Retirees Association, said he agrees with Abraham and asked the City Council to request a $40 million bond instead.
“I’m asking you to consider 40,” he said. “The amount for the bond is lower, and you’re addressing the situation, but I don’t think in the future going forward that there will be a City Council or mayor that will address the situation.”
Councilman David Bazzy said he supports the $35 million.
“I think the number we came to is a nice compromise,” Bazzy said. “There’s no interest like self interest, but we have to do what’s best for the whole community.”
While Council President Susan Dabaja said the bond was inevitable, Byrnes said it was the right thing to do.
“This is not only the right thing to do, but it’s the only thing to do,” Byrnes said. “The residents’ and retirees’ voices matter and have been heard.”
Sareini said he believes the decision has a lot of positive feedback.
“We need to focus on all current and future retirees when making these decisions,” he said. “There’s a lot of positive feedback and I think that will continue.”
Public Act 202 states that municipalities are allowed to bond; however, cities are responsible for deciding the amount and are required to submit a plan by Oct. 26 on how they will meet the 40 percent funding requirement for post-employment health care.
Council members voted unanimously on a $35 million bond to fund post-employment health care at 44 percent.
“I’m very proud to work with colleagues,” Sareini said. “I’m proud of the work we did to come up with a good resolution to help our taxpayers and retirees.”