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Alcona explores costs of getting bond to fund MERS

HARRISVILLE — The Alcona County Board of Commissioners is further exploring bonding options to fund the county’s Municipal Employees Retirement System of Michigan retirement fund obligations.

On Wednesday commissioners unanimously approved a motion to sign a letter of engagement with Clark Hill PLC that will outline the costs of getting a bond to potentially fund the obligations.

According to Chairman Craig Johnston the county has $4.5-$5 million in unfunded liabilities in the retirement fund. Under a law change, that unfunded liability will now appear in county audits and there is a push by many municipalities to find a funding source.

Additionally, he said, MERS is amortizing the unfunded liabilities and is going to make higher payments for municipalities, which could cause a pinch.

Alcona County, which currently has no bonding issues, has looked at getting a bond to fund the liability and at the same time pay the annual contributions to the retirement fund, Johnston said.

Johnston said during a recent meeting, the firm sent the county two engagement letters that would outline the expenses with getting the bond.

“It would include all those numbers that would be needed in the bond,” he said.

According to Johnston, signing the letters would not mean the county had to pay the firm unless it decided to bond.

“If we don’t bond, we don’t pay,” he said. “The clerk has sent all the paperwork. They are going to look at our budget, our finances and what our unfunded liability is and they’re going to give us an educated proposal to see if we should bond.”

Johnston said it was just one of a few options the county could take with MERS funding.

Commissioner Gary Wnuk said he heard a county bonded but it didn’t turn out how officials wanted it to.

“They went through the bonding process and their contribution went higher,” he said. “I just wanted to inform you of that.”

Commissioner Adam Brege cast a motion to allow the letters to be signed and was seconded by Wnuk.

Brege said there could be some action on repaying MERS, which is an issue for many counties and other municipalities across the state currently.

“I heard the governor is putting together a task force on MERS,” he said. “We might get some information out of that when they are done.”

Jason Ogden can be reached via email at jogden@thealpenanews.com or by phone at 358-5693. Follow Jason on Twitter @jo_alpenanews.

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