2018-01-10 / News

Bond consolidation will save Croswell money


CROSWELL — The city will save about $310,000 in the next 16 years by consolidating all outstanding debts at its wastewater treatment plant into one bond sale at a lower interest rate.

The consolidation of three previous bond sales into one bond sale at a lower 2.92 percent interest rate was finalized before a notary at the city council's Jan. 2 meeting.

The new bonds have been sold to Eastern Michigan Bank, a local bank. The sale will be finalized next week.

"It is a benefit to have a local bank buy them," said Croswell City Administrator Sam Moore. "We advertised all over the country and the lowest interest rate was right down the street."

The sale is expected to save the city about $20,000 a year, he said.

The council also decided to form a work group to study its plan to sell $4 million in bonds to help eliminate the city's pension obligations.

The work group will consist of perhaps two council members, representatives from the city's two union groups, the heads of each city department, newer hires and employees near retirement to provide perspective on the plan.

The first meeting of the new study group will be set at the Jan. 15 council meeting.

"We want everyone to sit down at the same table, so everyone understands how to proceed forward," Moore said. "We want everyone on the same page so everyone knows what's going on."

Cities, school districts and other government agencies around the country have struggled to keep up with payments into funds that cover workers’ retirement and health pensions.

In the past few decades, some have turned to bond sales as a partial solution to shrink the unfunded liability, in other words the projected amount needed to cover current and future obligations.

Croswell's proposed $4 million bond issue will not entirely cover the city's obligation, estimated at about $4.7 million. But it will make for easier maintenance of pension debt and take taxpayers off the hook if there is a shortfall, Moore said.

Council also:

Approved appointing Walter Reini to a three-year term on the Board of Review;

Approved appointing Marty Rheaume, Gerald MacDonald, Kim Hartman and Karen Schott to three-year terms on the Parks & Recreation Committee;

Approved appointing Mike O'Vell, Keith Kalso and Doug Bricker to four-year terms on the Tax Increment Finance Authority;

Approved appointing Clara Will to a three-year term on the Personnel Policy Committee.

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