Hi All,
TODAY....10 AM......Study Session.....Fiduciary Review
Event: Board of Trustees Study Session will occur on Aug 7, 2014 at 10:00am
Location: Township Hall, 4200 Telegraph Road, Bloomfield Township, Michigan 48303
Description: CHARTER TOWNSHIP OF BLOOMFIELD
BOARD OF TRUSTEES
NOTICE OF SPECIAL STUDY SESSION
THURSDAY, AUGUST 7, 2014
10:00 A.M.
TO BE HELD IN THE TOWNSHIP CONFERENCE ROOM (UPPER LEVEL)
AT 4200 TELEGRAPH ROAD
(248) 433-7700
TO BE DISCUSSED:
FIDUCIARY REVIEW OF INVESTMENTS
My comments on this study session:
1. IT SHOULD BE AUDIO/VIDEO RECORDED and ARCHIVED
2. IT SHOULD have been THE agenda item at the cancelled meeting.
7/28/14 Board of Trustees Meeting. Due to lack of Agenda
items.
However, that would have given the taxpayers information BEFORE the millage elections.
3. Another "public" meeting held when many of the public cannot attend.
4. No agenda or board packet posted on the Bloomfield Township website in advance of the meeting.
5. Will the public ever get to see the documents that are being discussed at this meeting?
6. I do believe Fiduciary Review is supposed to be QUARTERLY at the Township.
7. Is the $85 MILLION bond money earning the interest rate expected and needed?
Marcia
Showing posts with label $85 Million Bond. Show all posts
Showing posts with label $85 Million Bond. Show all posts
Thursday, August 7, 2014
Wednesday, October 30, 2013
OUR TAX MONEY...Who decides financial decisions?
Hi All,
PLEASE PUT ON YOUR CALENDAR... SPECIAL STUDY SESSION
To Be Discussed:
Investment Strategy Recommendations of Schwartz and Company regarding the proceeds of the Pension Obligation Bonds Sale as well as the annual Fiduciary Review.
Any early birds??? 8 AM... Monday, Nov. 11, 2013. Can you make this SPECIAL STUDY SESSION MEETING? It is a PUBLIC MEETING.
I'm sure IF MANY people attend...the administration will hopefully move the meeting to the township hall meeting room.... otherwise... the study session will be held in the conference room..... where the trustees, etc. sit at a conference table.... and YOU sit on a chair along the wall.
Since it is a public meeting... you should be able to make a comment/ask a question.
A LOT of money from the Pension Obligation Bond sale... (question: WHEN is the $85 million bond sale? or DID the bond sale already happen?.... ) HOW is this $$$ going to be invested?
Please, someone other than the 7 trustees needs to be there...taking notes. I hope the PRESS will attend... listen/ask questions and write their own article... not accepting any preprinted press release.
THIS IS ANOTHER PUBLIC MEETING THAT SHOULD BE MANDATORY FOR THE TOWNSHIP TO RECORD AND ARCHIVE AND PUT ON CABLE TV AND ON THE WEBSITE...therefore, it should be held in the township hall meeting room.
In fact, I think this should be discussed as an agenda item at a regularly scheduled meeting. I wish many of you would call or email (see the township 7 email addresses in this email heading) and request that this meeting be audio/video recorded.
Trust me.... everyone should have MORE than the written minutes for the information given at study session special meetings. It is OUR taxpayer money... and OUR debt of 85 million in bond sales.....along with the OTHER 150 million in bond debt already on the books.
Question: Should we hear from OTHER financial groups on their recommendations for investments? Are there CHOICES of who to invest with/ how much/ in what way/ etc? Should WE know and hear and see the complete fiduciary review?
Question: Do you think your assessed value of your home is high? The township NEEDS money to pay for all the borrowed funds and all the employee contract promises....not only payroll/health benefits/pensions, but also including vehicle perks and tuition reimbursements among other things. When you go to sell your house... you MAY be surprised at the offer price. Want to know more about how much $$$$ in ASSESSMENTS in the township for your house or others? go to this link: https://is.bsasoftware.com/BSA.IS/default.aspx and click on the many choices in the left hand column for information. ONE of the links shows what your assessed value was for every year since 2000. What is YOUR assessed value today compared to 2008? Do you think you can sell your house for that much today? ONE of the links will tell you for how much and when the property LAST sold... Play around with the assessing link.
FYI: Coming up AFTER this meeting... sometime in Nov./Dec. will be the preliminary budget proposal for 2014-2015. What will that say?
Also NOT mentioned so far by the trustees... 3 millages that expire in 2013.... last payment for those should be the December 2013 winter bill. Are more millage requests in our future? WHEN?
REMINDER: Monday, November 11 @ 8 AM.... morning !!! Try to attend this SPECIAL STUDY SESSION meeting.
Charter Township of Bloomfield
Board of Trustees
Notice of Special Study Session
Monday, November 11, 2013
8:00 AM
To Be Held In The Township Conference Room (Upper Level) At 4200 Telegraph Road
(248) 433-7700
To Be Discussed:
Investment Strategy Recommendations of Schwartz and Company regarding the proceeds of the Pension Obligation Bonds Sale as well as the annual Fiduciary Review
PLEASE PUT ON YOUR CALENDAR... SPECIAL STUDY SESSION
To Be Discussed:
Investment Strategy Recommendations of Schwartz and Company regarding the proceeds of the Pension Obligation Bonds Sale as well as the annual Fiduciary Review.
Any early birds??? 8 AM... Monday, Nov. 11, 2013. Can you make this SPECIAL STUDY SESSION MEETING? It is a PUBLIC MEETING.
I'm sure IF MANY people attend...the administration will hopefully move the meeting to the township hall meeting room.... otherwise... the study session will be held in the conference room..... where the trustees, etc. sit at a conference table.... and YOU sit on a chair along the wall.
Since it is a public meeting... you should be able to make a comment/ask a question.
A LOT of money from the Pension Obligation Bond sale... (question: WHEN is the $85 million bond sale? or DID the bond sale already happen?.... ) HOW is this $$$ going to be invested?
Please, someone other than the 7 trustees needs to be there...taking notes. I hope the PRESS will attend... listen/ask questions and write their own article... not accepting any preprinted press release.
THIS IS ANOTHER PUBLIC MEETING THAT SHOULD BE MANDATORY FOR THE TOWNSHIP TO RECORD AND ARCHIVE AND PUT ON CABLE TV AND ON THE WEBSITE...therefore, it should be held in the township hall meeting room.
In fact, I think this should be discussed as an agenda item at a regularly scheduled meeting. I wish many of you would call or email (see the township 7 email addresses in this email heading) and request that this meeting be audio/video recorded.
Trust me.... everyone should have MORE than the written minutes for the information given at study session special meetings. It is OUR taxpayer money... and OUR debt of 85 million in bond sales.....along with the OTHER 150 million in bond debt already on the books.
Question: Should we hear from OTHER financial groups on their recommendations for investments? Are there CHOICES of who to invest with/ how much/ in what way/ etc? Should WE know and hear and see the complete fiduciary review?
Question: Do you think your assessed value of your home is high? The township NEEDS money to pay for all the borrowed funds and all the employee contract promises....not only payroll/health benefits/pensions, but also including vehicle perks and tuition reimbursements among other things. When you go to sell your house... you MAY be surprised at the offer price. Want to know more about how much $$$$ in ASSESSMENTS in the township for your house or others? go to this link: https://is.bsasoftware.com/BSA.IS/default.aspx and click on the many choices in the left hand column for information. ONE of the links shows what your assessed value was for every year since 2000. What is YOUR assessed value today compared to 2008? Do you think you can sell your house for that much today? ONE of the links will tell you for how much and when the property LAST sold... Play around with the assessing link.
FYI: Coming up AFTER this meeting... sometime in Nov./Dec. will be the preliminary budget proposal for 2014-2015. What will that say?
Also NOT mentioned so far by the trustees... 3 millages that expire in 2013.... last payment for those should be the December 2013 winter bill. Are more millage requests in our future? WHEN?
REMINDER: Monday, November 11 @ 8 AM.... morning !!! Try to attend this SPECIAL STUDY SESSION meeting.
Charter Township of Bloomfield
Board of Trustees
Notice of Special Study Session
Monday, November 11, 2013
8:00 AM
To Be Held In The Township Conference Room (Upper Level) At 4200 Telegraph Road
(248) 433-7700
To Be Discussed:
Investment Strategy Recommendations of Schwartz and Company regarding the proceeds of the Pension Obligation Bonds Sale as well as the annual Fiduciary Review
Monday, July 15, 2013
Bl. Township & Bonds for Underfunded Pension Plan
Hi All,
Bloomfield Township is rated AAA. We have a current $69 MILLION BOND Debt and growing with more water bonds.....and soon to have $85 Million Bond Debt for the underfunded pension fund..... that's over 150 million in bond debt for 17,000 homesteads over the next 20 years. IT bothers me that the anticipation is that Bloomfield Township will retain the AAA rating. WHY? Answer, so we can borrow more? Bond debt "looks good" on the financial reports? At some point in time, this township needs to pay for services and contracted debt ANNUALLY with revenues collected each year. It is time to quit borrowing more and more money.
The bonds for the pension obligation....MAY.... be a financially responsible move with low interest rates... in theory to many in the financial community.... but those financial people collect their fee no matter what happens in the economy. The township taxpayer has to rely on PROFITS gained from the investments... or if no profit or good returns, we just have extra debt....pensions and bondholders and interest/fees. This pension fund will last much longer than the 20 years of this pension obligation bond. What then? Stating to the public that this will 100 % fund this obligation.... is not exactly true. There is RISK involved and many more decades past this 20 year bond for this defined benefit pension plan..... it will be finally "closed" when all 400 + current retirees and current employees hired before 2005 (except the library, 2012) are gone. I most likely won't live to see that day... I'm 65.
However, by allowing bonds, the taxpayers now have NO leverage to get the leadership to make cuts to meet costs except voting NO on any new or renewed millages. In fact, after learning of the bond opportunity, the Township gave ALL employees a 2 % raise for 2013 and a 2% raise for 2014.... with the six year contract having another wage opener in 2015. The six year contract was a "gift" from the outgoing Supervisor who QUIT... aka as retired.... in the middle of his elected term... so the township could APPOINT his successor. The township also "OPTS OUT" of the requirements of PA 152 (and will for a total of 6 years) because of the 6 year contract signed in 2011. Again, the township KNEW what was coming out of Lansing and has been able to "game" the system. FYI: The existing contracts were NOT about to expire when the 6 year contract deal was made.
If there was 2% money for pay raises... WHY NOT put that money into their UNDERFUNDED PENSION PLAN? Was it because the government in Lansing gave them an EASY BUTTON ? Our township leadership is making this bond opportunity sound like a "get out of debt free" opportunity.... in fact... they say we will SAVE $60 million dollars over the 20 years. I'll believe it when I see it happen. Unfortunately.... we won't really SAVE $60 million..... our township leadership will find another way to give it to the employees. My opinion.
I would really like to hear from any one of you.... as to why a DEFINED BENEFIT PENSION PLAN..... is considered CLOSED... when it is open and thriving for at least 230 + current employees in Bloomfield Township STILL IN THE PLAN and STILL ACCRUING BENEFITS under the conditions of that plan. There are over 200 retirees already collecting from this pension plan. Some of the employees may have another 20 + years of employment in the township. This existing "CLOSED" plan is unsustainable and I do not believe this $80-85 million bond deal will be the END of the funding stream needed from the township taxpayers. Why didn't LANSING define CLOSED..... as FROZEN.... or STOPPED ACCRUING.... something? I still believe this defined benefit plan is unsustainable ... for many decades to come.
In fact, the township leadership had to go to another taxing authority ( our public library) .... which has people in the township pension plan.... unbelievable.... and negotiate them OUT of this pension plan... to really have the word "closed" associated with this pension plan. Why?... to be able to take advantage of this bond opportunity. Our township has been telling us and the media that this pension plan was closed to new hires since 2005..... never telling us that another taxing authority had their employees in the township defined benefit pension plan. How is that taxing authority contributing funds for their employees?
This pension plan is not the only obligation for retirees that the township is responsible to fund. There is also retiree health benefit plans.... costing $4 million yearly and growing. That plan didn't change...except for new hires in 2011??? The list goes on... How much is the township paying for BENEFITS.... for RETIREES? MILLIONS and growing....
Our Supervisor, Leo Savoie, sent this to me via email CC in response to another Bl. Twp. Taxpayer 's question. Read Savoie's comment to another:
"We have taken steps to overhaul the system. Bloomfield Township ended the defined benefit plan for all new hires in 2005. We were forced to go to binding arbitration to get that done. 82% of the benefit has already been earned. The average pension in Bloomfield Township is $34,000. Dave Payne is an anomaly. He worked at Bloomfield Township for 42 years. He came up through the ranks and attained the highest position. Dave could have retired approximately 8 years earlier, collected his maximum pension and go to work for someone else. He easily left in excess of a half a million dollars on the table.
"I have seen emails where you have issues with the pension obligation bonds. We realize we have a problem. These bonds are the most fiscally prudent way to manage the problem. The liability already exists to the Township. These bonds will allow us to properly weight the pension plan to meet a return assumption of 6.25%. We realize there are risks involved however we have plans to mitigate the risks. Over the last 9 years the plan returned on average 5.95%. This includes 2008/2009 which saw a loss in principal of 4%.
"We have another town hall meeting set up tomorrow 7/9 at 1 pm. I would encourage you to come or we can get together individually and I can go over everything with you. If you would like I am available 7/11 or 7/16 around noon. Please let me know."
Leo Savoie
Bloomfield Township Supervisor
4200 Telegraph Road
P.O. Box 489
Bloomfield Twp., MI 48303
(248) 433-7708
MY COMMENT: FYI: Dave Payne, our recently "retired" supervisor (2011) earns a pension over $130,000/yr plus retiree health benefits. The employees... named the new public works building after him and gave him a "surprise" afternoon event showing his name on the building. The township leadership did not approve of this naming of the building at a public Board Meeting until after the event was held. I wish Payne had retired 8 years earlier.... maybe we could have elected someone at that time that could have brought the contracts and other issues to a manageable level instead of the six year "gift".
The Savoie paragraph above states he knows there is a problem. Yet, he gave raises to all employees and continues to "OPT OUT" of a state law which would require more employee payment into a health plan. His comment about the bond for pensions.... does not give me comfort. What are the township's plans to mitigate the risk? Tell us now. WE, the taxpayers, need to realize 6.25% in the future 20 years on these bonds..... but have NOT averaged that in the last 9 years.... even though the market has rebounded to record high levels. What bubble is next to burst? Tell me why this $85 million bond proposal to fund the underfunded defined benefit plan is a good idea?
View on your computer:
Town Hall meetings: http://vimeo.com/69538409 and http://vimeo.com/70036772
The Township video BEFORE the town hall meetings but AFTER already approving the bond at a Board of Trustee meeting: http://vimeo.com/68534211
Bloomfield Township is rated AAA. We have a current $69 MILLION BOND Debt and growing with more water bonds.....and soon to have $85 Million Bond Debt for the underfunded pension fund..... that's over 150 million in bond debt for 17,000 homesteads over the next 20 years. IT bothers me that the anticipation is that Bloomfield Township will retain the AAA rating. WHY? Answer, so we can borrow more? Bond debt "looks good" on the financial reports? At some point in time, this township needs to pay for services and contracted debt ANNUALLY with revenues collected each year. It is time to quit borrowing more and more money.
The bonds for the pension obligation....MAY.... be a financially responsible move with low interest rates... in theory to many in the financial community.... but those financial people collect their fee no matter what happens in the economy. The township taxpayer has to rely on PROFITS gained from the investments... or if no profit or good returns, we just have extra debt....pensions and bondholders and interest/fees. This pension fund will last much longer than the 20 years of this pension obligation bond. What then? Stating to the public that this will 100 % fund this obligation.... is not exactly true. There is RISK involved and many more decades past this 20 year bond for this defined benefit pension plan..... it will be finally "closed" when all 400 + current retirees and current employees hired before 2005 (except the library, 2012) are gone. I most likely won't live to see that day... I'm 65.
However, by allowing bonds, the taxpayers now have NO leverage to get the leadership to make cuts to meet costs except voting NO on any new or renewed millages. In fact, after learning of the bond opportunity, the Township gave ALL employees a 2 % raise for 2013 and a 2% raise for 2014.... with the six year contract having another wage opener in 2015. The six year contract was a "gift" from the outgoing Supervisor who QUIT... aka as retired.... in the middle of his elected term... so the township could APPOINT his successor. The township also "OPTS OUT" of the requirements of PA 152 (and will for a total of 6 years) because of the 6 year contract signed in 2011. Again, the township KNEW what was coming out of Lansing and has been able to "game" the system. FYI: The existing contracts were NOT about to expire when the 6 year contract deal was made.
If there was 2% money for pay raises... WHY NOT put that money into their UNDERFUNDED PENSION PLAN? Was it because the government in Lansing gave them an EASY BUTTON ? Our township leadership is making this bond opportunity sound like a "get out of debt free" opportunity.... in fact... they say we will SAVE $60 million dollars over the 20 years. I'll believe it when I see it happen. Unfortunately.... we won't really SAVE $60 million..... our township leadership will find another way to give it to the employees. My opinion.
I would really like to hear from any one of you.... as to why a DEFINED BENEFIT PENSION PLAN..... is considered CLOSED... when it is open and thriving for at least 230 + current employees in Bloomfield Township STILL IN THE PLAN and STILL ACCRUING BENEFITS under the conditions of that plan. There are over 200 retirees already collecting from this pension plan. Some of the employees may have another 20 + years of employment in the township. This existing "CLOSED" plan is unsustainable and I do not believe this $80-85 million bond deal will be the END of the funding stream needed from the township taxpayers. Why didn't LANSING define CLOSED..... as FROZEN.... or STOPPED ACCRUING.... something? I still believe this defined benefit plan is unsustainable ... for many decades to come.
In fact, the township leadership had to go to another taxing authority ( our public library) .... which has people in the township pension plan.... unbelievable.... and negotiate them OUT of this pension plan... to really have the word "closed" associated with this pension plan. Why?... to be able to take advantage of this bond opportunity. Our township has been telling us and the media that this pension plan was closed to new hires since 2005..... never telling us that another taxing authority had their employees in the township defined benefit pension plan. How is that taxing authority contributing funds for their employees?
This pension plan is not the only obligation for retirees that the township is responsible to fund. There is also retiree health benefit plans.... costing $4 million yearly and growing. That plan didn't change...except for new hires in 2011??? The list goes on... How much is the township paying for BENEFITS.... for RETIREES? MILLIONS and growing....
Our Supervisor, Leo Savoie, sent this to me via email CC in response to another Bl. Twp. Taxpayer 's question. Read Savoie's comment to another:
"We have taken steps to overhaul the system. Bloomfield Township ended the defined benefit plan for all new hires in 2005. We were forced to go to binding arbitration to get that done. 82% of the benefit has already been earned. The average pension in Bloomfield Township is $34,000. Dave Payne is an anomaly. He worked at Bloomfield Township for 42 years. He came up through the ranks and attained the highest position. Dave could have retired approximately 8 years earlier, collected his maximum pension and go to work for someone else. He easily left in excess of a half a million dollars on the table.
"I have seen emails where you have issues with the pension obligation bonds. We realize we have a problem. These bonds are the most fiscally prudent way to manage the problem. The liability already exists to the Township. These bonds will allow us to properly weight the pension plan to meet a return assumption of 6.25%. We realize there are risks involved however we have plans to mitigate the risks. Over the last 9 years the plan returned on average 5.95%. This includes 2008/2009 which saw a loss in principal of 4%.
"We have another town hall meeting set up tomorrow 7/9 at 1 pm. I would encourage you to come or we can get together individually and I can go over everything with you. If you would like I am available 7/11 or 7/16 around noon. Please let me know."
Leo Savoie
Bloomfield Township Supervisor
4200 Telegraph Road
P.O. Box 489
Bloomfield Twp., MI 48303
(248) 433-7708
MY COMMENT: FYI: Dave Payne, our recently "retired" supervisor (2011) earns a pension over $130,000/yr plus retiree health benefits. The employees... named the new public works building after him and gave him a "surprise" afternoon event showing his name on the building. The township leadership did not approve of this naming of the building at a public Board Meeting until after the event was held. I wish Payne had retired 8 years earlier.... maybe we could have elected someone at that time that could have brought the contracts and other issues to a manageable level instead of the six year "gift".
The Savoie paragraph above states he knows there is a problem. Yet, he gave raises to all employees and continues to "OPT OUT" of a state law which would require more employee payment into a health plan. His comment about the bond for pensions.... does not give me comfort. What are the township's plans to mitigate the risk? Tell us now. WE, the taxpayers, need to realize 6.25% in the future 20 years on these bonds..... but have NOT averaged that in the last 9 years.... even though the market has rebounded to record high levels. What bubble is next to burst? Tell me why this $85 million bond proposal to fund the underfunded defined benefit plan is a good idea?
View on your computer:
Town Hall meetings: http://vimeo.com/69538409 and http://vimeo.com/70036772
The Township video BEFORE the town hall meetings but AFTER already approving the bond at a Board of Trustee meeting: http://vimeo.com/68534211
Saturday, June 15, 2013
Eccentric article/ More Comments on $85 Million Bond
Hi All,
Please take time to read this article on the Township Bond issue: Bloomfield Township to issue $85 million in bonds by: Jay M. Grossman, Birmingham Eccentric Reporter
My Comments and Opinions:
From Eccentric article: I've put quotes as: bold/italic/underlined
"Whether they agree or not with the decision is a totally separate issue." (Savoie)
In my opinion, those 2 newly planned meetings are to quiet the masses.... the decision is NOT going to change. So, if you think the bond decision is going to change by going to those meetings...think again. A referendum was the only way to get a public vote, which I still wish could happen. Those 2 meetings were only scheduled after the issue became more public and after Savoie held a private meeting with some UHOA members and others. It was not at a public Board meeting. I believe the township will just want to focus about their bond decision stressing the word "saving" at those two meetings.
I would stress the word RISK and ask WHY is the pension fund so underfunded and what other options were considered? There were other options given at the study session. Let's hear about them.
"Savoie said the township will save about $80 million over the next 20 years and still meet all its pension obligations."
Honestly, the "save" $80 M is estimating... and will THIS bond meet ALL pension obligations?? I doubt it... as the pension will need to go much beyond 20 years. What then? Need to check to see if the other pension plan for post 2005 employee receives any taxpayer contributions. Are there any
more pension plans on the books? Are there obligations to those as well? Are they underfunded? These issues also need to be discussed at the township "town hall" meetings. The taxpayers should see the whole picture of township expenses.
What Savoie should have said was that we have an obligation to pay a DEBT.. Our current PENSION debt on one plan is an $80 million obligation. IF we do a bond there is another $5 million in upfront fees, and XXX millions in interest owed. Remember, this is a DEBT..... not a savings account. There is money OWED. There is also around $69 Million in OTHER bond debt already on the books at the township that require payments. That bond debt number is growing with paving and other unfunded issues.
"...and right now the township is getting back around a 5-percent return on its investments." (Devine)
Ask Devine and Schwartz, Prudential or other financial advisors with the township : was any money LOST during the investment periods and how many years did it take to recover the money?
What factors made the pension go from 82% funded 3 years ago....with a good 2 years in the stock market since.... to DROPPING IN VALUE to only 61 % funded today??
If the township was invested properly with (I don't know the amount) of millions of money in the pension fund previously.... and LOST 21% to become even more UNDERfunded during 3 of the most productive years .... maybe we should have different investment advisors.
Or, should we just admit right now that this type of pension is unsustainable??
I wonder.... could we get the people expecting a pension from this fund.... to sign off any more financial responsibility from the township taxpayers if we put $80 MILLION "pot of cash" into that pension fund?? Let THEM take the investing RISK permanently!
Have you read the news lately about Chrysler/GM and others with changes to pension funds?
This is a DEBT, an obligation. I understand that.
This debt apparently has not been managed well in the past or it would not be that much underfunded.
Do continual pay raises and perks and/or other factors keep changing the grand total of the obligation? What changes have been made to the pension language? The township most likely knew this law was coming to use bonds for underfunded pension plans. There were certain agenda items over the last year concerning the pension plan. I didn't pay much attention to them. Perhaps we all should have? How did the township position themselves with those agenda items in terms of being able to do this bond issue? One agenda item concerning the pension seemed retroactive to make it valid at an earlier date. I'm not an investigative reporter. However, there are things that bother me....
THIS bond proposal is not refinancing, there is no existing loan...only bills that have not been paid by our township leadership that was to keep the pension fund at an acceptable level. This is a lot more than just searching for a low interest rate. THIS IS LOOKING FOR A LOAN...with low interest rates.
THE BOND... is a loan with RISK and possible benefits. A bond provides a huge "pot of money" at once...for the township leadership and Schwartz, and Prudential and /or others to gamble with and HOPE the financial gamble pays off. With $5 million allotted for "fees", those financial advisors potentially make a huge pay day whether or not the $80 million along with what is already in the fund to invest (at a RISK to the township taxpayer) is successful at the end of 20 years. I get nervous when a huge fee goes to a person telling us it is good to give them $80 million to invest...with no risk to them.
If we don't do the bond...we don't have $5Million in fees. I would like to hear about making PAYMENTS every year over the next 20 years... say, $5 million/year, taking the money out of the township budget.... to satisfy the $80 million underfunded. 20 years times (a possible) $5 million per year is $100 million. More than what is currently needed. NO risk/ No fees/ and... if invested yearly in something similar to a savings account/ or low risk... more money would be gained. Yes, I know there would need to be cuts in township government .... but those cuts are long overdue in my opinion. Outsourcing some things would help.
The township employees are going to get their pensions regardless.
Many that see the BOND as a DEAL.... are the ones not paying the DEBT. Those financial advisors and employees that are pushing the bond deal are receiving immediate or future benefits. Does it mean don't do a Bond? Maybe. If we have until Dec. of 2014.... why do it all in one 20 year lump sum? In a rush? Would it be better to do bonds differently? Not at all? What were/are the OPTIONS?
I'm back to the % funded vs % underfunded issue of the PENSION fund question....why did the bond go from 82% funded to only 61 % funded in the last three years? The stock market RALLIED during those years, and.... will this $85 million bond make this fund 100% funded for its lifetime? I doubt it.
Marcia
Please take time to read this article on the Township Bond issue: Bloomfield Township to issue $85 million in bonds by: Jay M. Grossman, Birmingham Eccentric Reporter
My Comments and Opinions:
From Eccentric article: I've put quotes as: bold/italic/underlined
"Whether they agree or not with the decision is a totally separate issue." (Savoie)
In my opinion, those 2 newly planned meetings are to quiet the masses.... the decision is NOT going to change. So, if you think the bond decision is going to change by going to those meetings...think again. A referendum was the only way to get a public vote, which I still wish could happen. Those 2 meetings were only scheduled after the issue became more public and after Savoie held a private meeting with some UHOA members and others. It was not at a public Board meeting. I believe the township will just want to focus about their bond decision stressing the word "saving" at those two meetings.
I would stress the word RISK and ask WHY is the pension fund so underfunded and what other options were considered? There were other options given at the study session. Let's hear about them.
"Savoie said the township will save about $80 million over the next 20 years and still meet all its pension obligations."
Honestly, the "save" $80 M is estimating... and will THIS bond meet ALL pension obligations?? I doubt it... as the pension will need to go much beyond 20 years. What then? Need to check to see if the other pension plan for post 2005 employee receives any taxpayer contributions. Are there any
more pension plans on the books? Are there obligations to those as well? Are they underfunded? These issues also need to be discussed at the township "town hall" meetings. The taxpayers should see the whole picture of township expenses.
What Savoie should have said was that we have an obligation to pay a DEBT.. Our current PENSION debt on one plan is an $80 million obligation. IF we do a bond there is another $5 million in upfront fees, and XXX millions in interest owed. Remember, this is a DEBT..... not a savings account. There is money OWED. There is also around $69 Million in OTHER bond debt already on the books at the township that require payments. That bond debt number is growing with paving and other unfunded issues.
"...and right now the township is getting back around a 5-percent return on its investments." (Devine)
Ask Devine and Schwartz, Prudential or other financial advisors with the township : was any money LOST during the investment periods and how many years did it take to recover the money?
What factors made the pension go from 82% funded 3 years ago....with a good 2 years in the stock market since.... to DROPPING IN VALUE to only 61 % funded today??
If the township was invested properly with (I don't know the amount) of millions of money in the pension fund previously.... and LOST 21% to become even more UNDERfunded during 3 of the most productive years .... maybe we should have different investment advisors.
Or, should we just admit right now that this type of pension is unsustainable??
I wonder.... could we get the people expecting a pension from this fund.... to sign off any more financial responsibility from the township taxpayers if we put $80 MILLION "pot of cash" into that pension fund?? Let THEM take the investing RISK permanently!
Have you read the news lately about Chrysler/GM and others with changes to pension funds?
- I would like to remind all of the Township taxpayers... that back in 2010.... just before the February vote to increase our taxes with a 1.3 mills NEW GENERAL OBLIGATION for 10 years...( which passed by 600+ vote). the S.O.S. committee that sent out postcards with burning buildings...and suggesting that EMS might not be able to save you... scare tactics in my opinion to get you to vote YES for the new millage ($4 + Million collected/year) , that S.O.S. committee was FUNDED almost 95% by employees and vendors of the township. Instead of adjusting the size of government and making cuts.. many on the township payroll or doing work for the township in 2010, actively supported raising your taxes instead. The contributors to the S.O.S. committee is public record. Some with contributions in the 10's of thousands.
- I hear, but cannot confirm at this time, that there are currently 250 retirees collecting a pension now, with 10 past employees vested in the program but not old enough to collect yet, and 213 current employees still employed at the township and in this pension plan. I have heard that the pension plan is for the employee and their beneficiaries. That makes 473??? people in this pension plan?? Those numbers should be confirmed at the town hall meeting.
This is a DEBT, an obligation. I understand that.
This debt apparently has not been managed well in the past or it would not be that much underfunded.
Do continual pay raises and perks and/or other factors keep changing the grand total of the obligation? What changes have been made to the pension language? The township most likely knew this law was coming to use bonds for underfunded pension plans. There were certain agenda items over the last year concerning the pension plan. I didn't pay much attention to them. Perhaps we all should have? How did the township position themselves with those agenda items in terms of being able to do this bond issue? One agenda item concerning the pension seemed retroactive to make it valid at an earlier date. I'm not an investigative reporter. However, there are things that bother me....
THIS bond proposal is not refinancing, there is no existing loan...only bills that have not been paid by our township leadership that was to keep the pension fund at an acceptable level. This is a lot more than just searching for a low interest rate. THIS IS LOOKING FOR A LOAN...with low interest rates.
THE BOND... is a loan with RISK and possible benefits. A bond provides a huge "pot of money" at once...for the township leadership and Schwartz, and Prudential and /or others to gamble with and HOPE the financial gamble pays off. With $5 million allotted for "fees", those financial advisors potentially make a huge pay day whether or not the $80 million along with what is already in the fund to invest (at a RISK to the township taxpayer) is successful at the end of 20 years. I get nervous when a huge fee goes to a person telling us it is good to give them $80 million to invest...with no risk to them.
If we don't do the bond...we don't have $5Million in fees. I would like to hear about making PAYMENTS every year over the next 20 years... say, $5 million/year, taking the money out of the township budget.... to satisfy the $80 million underfunded. 20 years times (a possible) $5 million per year is $100 million. More than what is currently needed. NO risk/ No fees/ and... if invested yearly in something similar to a savings account/ or low risk... more money would be gained. Yes, I know there would need to be cuts in township government .... but those cuts are long overdue in my opinion. Outsourcing some things would help.
The township employees are going to get their pensions regardless.
- However, I don't believe past contracts were good for the taxpayers. I don't think there should have been 2% pay increases this April 2013.... the OPTION... to open the existing six year contract for wages was there... however, granting pay increases was not mandatory.
- I don't think the Township should annually "opt out" of a state law that had the employees paying more... by "opting out" the taxpayer pays that employee amount instead.
- I don't think our employees should be hired out to Sylvan Lake, Pontiac, or other municipalities for "FEES". Also, there are many "interlocal" agreements. While other nearby municipalities scale down.. our employees are often the ones going elsewhere to help out. The township taxpayer is responsible for pensions...not the fee payer. Perhaps it is time to scale down the SIZE of OUR government at Bloomfield Township. It seems as though the only way to do that is to force the issue by voting NO on future millage proposals.
Many that see the BOND as a DEAL.... are the ones not paying the DEBT. Those financial advisors and employees that are pushing the bond deal are receiving immediate or future benefits. Does it mean don't do a Bond? Maybe. If we have until Dec. of 2014.... why do it all in one 20 year lump sum? In a rush? Would it be better to do bonds differently? Not at all? What were/are the OPTIONS?
I'm back to the % funded vs % underfunded issue of the PENSION fund question....why did the bond go from 82% funded to only 61 % funded in the last three years? The stock market RALLIED during those years, and.... will this $85 million bond make this fund 100% funded for its lifetime? I doubt it.
Marcia
Tuesday, June 11, 2013
"POTS of CASH" ... to... "SAVE" YOU MONEY
Hi All,
$85 Million Bond issue in Bloomfield Township, MI.
Please read this article first:
Free Press article by Bill Laitner.
http://www.freep.com/apps/pbcs.dll/article?AID=2013306110023
Bloomfield Twp. set to be 1st in state to cut retiree costs by selling bonds
Now, more comments and opinions from me.....
I wanted this $85 Million bond issue to go to a REFERENDUM...for a vote by the people and so the discussion and the decision making of how to spend OUR tax dollars was more OPEN and TRANSPARENT.... and for many to finally face the reality of this unsustainable form of pension for public employees.
By limiting the process to get to a referendum in a 45 day time limit via a petition with signatures of 10% of the electorate .... is unfair. There should have been a mandatory series of Town Hall type meetings before the vote of the leadership. Honestly, I just couldn't afford the attorney nor afford to give the time needed to succeed in the referendum process.
However, I did get people talking. Now I need to get people THINKING . When it comes time for more Township millages and trustee elections, I hope all taxpayers will be paying attention, listening, talking, thinking, questioning, demanding facts and taking appropriate action by voting.
For those looking just at the $85 Million BOND issue: I get it. We owe the money... a bond at this time potentially "saves" us money. I understand an argument about lower interest rates save money. I understand investing money can make money or lose money.
However, everyone needs to look at both sides of investing RISK. My question is WHO should be taking the RISKS? In this township pension plan... the risk taker is ALWAYS the taxpayer.... as the pension must be 100% funded until the last man/woman is gone.
Our elected officials need to make contracts/agreements/ pension plans/ that are fair to the employee.... yet mindful of the taxpayer and what costs result from each decision.
Did our leadership make payments to satisfy all those contracted expenses EACH YEAR from the taxes collected? I'm not sure.
How did the pension fund become UNDER-funded?
Was it: Failed to make payments? Lost money in investments? What is it?
I still would like to know more about the pension plan and how it has been funded to date. Where are the details of this plan? What assurances are there that this new "POT of CASH" from the Bonds will 100 % satisfy the taxpayer obligation to this fund? There are none. This type of pension is unsustainable for many reasons. This is not the last "pot of cash" that will be needed for this pension fund...in my opinion.
What I don't understand is WHY the fund was UNDERFUNDED?
Just three years ago this pension fund was FUNDED @ 82%.
NOW... with a new deal from the legislature and the Governor for municipalities to pay for underfunded pension plans, the Township pension plan is mysteriously...to me... now only 61% funded. (keep in mind this fact: one could only borrow what was "underfunded")
So if the bond "funding" can drop 21 % in 3 years in today's world, how much will the fund be underfunded in twenty years when THIS bond ends?
We have current employees still in that fund.
They might not retire for another 20 years and live for another 30 years. Bless them.
This pension was closed to NEW hires....not existing employees. What I argue is that this TYPE of pension plan should have been closed to ALL. Something should have been done/ offered/ negotiated/buy-out/ reorganized.....years ago because this kind of pension is unsustainable. The taxpayer may "save" some money by borrowing $85 million...for twenty years... but that may NOT be enough to keep the pension funded for the NEXT twenty years...thirty years.
This is what the taxpayers should know.... and going to a referendum... to discuss the wisdom of bonds versus OTHER OPTIONS should have been discussed by the community.
A quote from the article: "Bloomfield Township closed its employee pension plan in 2005, switching all new employees to 401(k) plans that are funded by the employees’ own deductions, officials said."
This quote needs a FACT CHECK. I recall that the township DOES make a contribution to the new employee 401(k) pension plan. The amount ??. Something to look into. Probably need to FOIA.
The article used the buying of a home as an example of saving money.... Yes, some people refinanced to "save" money. I get that. Some of those people that refinanced their homes... may still be on track to lose their home. On the other hand, in order to "save" money, some people faced reality and said..even though borrowing money is cheap right now...I don't have the financial resources to pay this amount of money back any more. Some people said .. this isn't working. I can't afford this home anymore. What else can I do? Give me some other OPTIONS. Sell. Rent. Buy a RV or boat and live there or even go live with family or friends. What other options do I have to "save" money other than borrowing cheap money? How can I get out of debt? Have the discussion/ exchange of ideas/ listen to each other before making the final decision.
That's what I wanted and still want from the Township officials: the taxpayers should be part of the discussion/ decision making. I can hear their come/back.... we had two study sessions and this as an agenda item at the Board of Trustees meeting. True. But who knew this was happening?
Think about this quote from the article: "Those tens of millions of dollars 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."
My question is: what about the pensioners AFTER the next two decades? Has anyone thought that far ahead?
Now I want you to think about YOUR investments and all the money you have left in YOUR retirement account after 20 years of investing and coping with reality. Some people have LOST money. Will the Township lose this money? Did the Township lose some money from this pension plan in the 2008 to now period ... or any other time period? A touchy subject...but where are the financial reports from those years? FOIA?
There is NO difference between the township pension plan funding and your personal retirement plan funding ..... YOU fund it. The difference is the township pension plan MUST always be re-funded by YOU, the taxpayer .... Your personal pension plan is what amount you can still afford...and only then.
Another quote: "The savings comes from the big increase in the pension plan’s expected investment returns, made possible by the large pot of cash provided by the bond sale, he said."
Whoopee...I'm at the end of the rainbow! Not.
There were OTHER OPTIONS to fund this pension. I want to know what they were. I want to know more about Township finances... more than what is found in the annual budget page. I want to know what facts gave the township a AAA rating? Is there another "large pot of cash" somewhere that could relieve some of this problem without incurring more debt to "save" money?
Please....do some thinking.
The township wants to spin this issue to be.... saving you money.... by borrowing cheaply.
They are the ones that put you into this debt by their decisions.
We are not getting out of this debt...we are attempting to manage the pension fund for 20 years....with a lot of risk, and all the risk is on YOU... not the employee. We are not solving the problem.
"POTS OF CASH" ..... the government/ taxing authority way to try to convince you that it's not costing you money... you are "saving money".
Sorry, a debt is a debt.
Marcia
PS: for my friends in the Bloomfield Hills School District living in Bloomfield Township:
I see the Bl. Hills Schools are patting themselves on the back in this article about how much money they are "saving" YOU in today's bond market. I wonder how much TOTAL BOND debt the Bloomfield Township w/ Bloomfield Hills Schools taxpayer is obligated to pay? Over $200 million?
$85 Million Bond issue in Bloomfield Township, MI.
Please read this article first:
Free Press article by Bill Laitner.
http://www.freep.com/apps/pbcs.dll/article?AID=2013306110023
Bloomfield Twp. set to be 1st in state to cut retiree costs by selling bonds
Now, more comments and opinions from me.....
I wanted this $85 Million bond issue to go to a REFERENDUM...for a vote by the people and so the discussion and the decision making of how to spend OUR tax dollars was more OPEN and TRANSPARENT.... and for many to finally face the reality of this unsustainable form of pension for public employees.
By limiting the process to get to a referendum in a 45 day time limit via a petition with signatures of 10% of the electorate .... is unfair. There should have been a mandatory series of Town Hall type meetings before the vote of the leadership. Honestly, I just couldn't afford the attorney nor afford to give the time needed to succeed in the referendum process.
However, I did get people talking. Now I need to get people THINKING . When it comes time for more Township millages and trustee elections, I hope all taxpayers will be paying attention, listening, talking, thinking, questioning, demanding facts and taking appropriate action by voting.
For those looking just at the $85 Million BOND issue: I get it. We owe the money... a bond at this time potentially "saves" us money. I understand an argument about lower interest rates save money. I understand investing money can make money or lose money.
However, everyone needs to look at both sides of investing RISK. My question is WHO should be taking the RISKS? In this township pension plan... the risk taker is ALWAYS the taxpayer.... as the pension must be 100% funded until the last man/woman is gone.
Our elected officials need to make contracts/agreements/ pension plans/ that are fair to the employee.... yet mindful of the taxpayer and what costs result from each decision.
Did our leadership make payments to satisfy all those contracted expenses EACH YEAR from the taxes collected? I'm not sure.
How did the pension fund become UNDER-funded?
Was it: Failed to make payments? Lost money in investments? What is it?
I still would like to know more about the pension plan and how it has been funded to date. Where are the details of this plan? What assurances are there that this new "POT of CASH" from the Bonds will 100 % satisfy the taxpayer obligation to this fund? There are none. This type of pension is unsustainable for many reasons. This is not the last "pot of cash" that will be needed for this pension fund...in my opinion.
What I don't understand is WHY the fund was UNDERFUNDED?
Just three years ago this pension fund was FUNDED @ 82%.
NOW... with a new deal from the legislature and the Governor for municipalities to pay for underfunded pension plans, the Township pension plan is mysteriously...to me... now only 61% funded. (keep in mind this fact: one could only borrow what was "underfunded")
So if the bond "funding" can drop 21 % in 3 years in today's world, how much will the fund be underfunded in twenty years when THIS bond ends?
We have current employees still in that fund.
They might not retire for another 20 years and live for another 30 years. Bless them.
This pension was closed to NEW hires....not existing employees. What I argue is that this TYPE of pension plan should have been closed to ALL. Something should have been done/ offered/ negotiated/buy-out/ reorganized.....years ago because this kind of pension is unsustainable. The taxpayer may "save" some money by borrowing $85 million...for twenty years... but that may NOT be enough to keep the pension funded for the NEXT twenty years...thirty years.
This is what the taxpayers should know.... and going to a referendum... to discuss the wisdom of bonds versus OTHER OPTIONS should have been discussed by the community.
A quote from the article: "Bloomfield Township closed its employee pension plan in 2005, switching all new employees to 401(k) plans that are funded by the employees’ own deductions, officials said."
This quote needs a FACT CHECK. I recall that the township DOES make a contribution to the new employee 401(k) pension plan. The amount ??. Something to look into. Probably need to FOIA.
The article used the buying of a home as an example of saving money.... Yes, some people refinanced to "save" money. I get that. Some of those people that refinanced their homes... may still be on track to lose their home. On the other hand, in order to "save" money, some people faced reality and said..even though borrowing money is cheap right now...I don't have the financial resources to pay this amount of money back any more. Some people said .. this isn't working. I can't afford this home anymore. What else can I do? Give me some other OPTIONS. Sell. Rent. Buy a RV or boat and live there or even go live with family or friends. What other options do I have to "save" money other than borrowing cheap money? How can I get out of debt? Have the discussion/ exchange of ideas/ listen to each other before making the final decision.
That's what I wanted and still want from the Township officials: the taxpayers should be part of the discussion/ decision making. I can hear their come/back.... we had two study sessions and this as an agenda item at the Board of Trustees meeting. True. But who knew this was happening?
Think about this quote from the article: "Those tens of millions of dollars 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."
My question is: what about the pensioners AFTER the next two decades? Has anyone thought that far ahead?
Now I want you to think about YOUR investments and all the money you have left in YOUR retirement account after 20 years of investing and coping with reality. Some people have LOST money. Will the Township lose this money? Did the Township lose some money from this pension plan in the 2008 to now period ... or any other time period? A touchy subject...but where are the financial reports from those years? FOIA?
There is NO difference between the township pension plan funding and your personal retirement plan funding ..... YOU fund it. The difference is the township pension plan MUST always be re-funded by YOU, the taxpayer .... Your personal pension plan is what amount you can still afford...and only then.
Another quote: "The savings comes from the big increase in the pension plan’s expected investment returns, made possible by the large pot of cash provided by the bond sale, he said."
Whoopee...I'm at the end of the rainbow! Not.
There were OTHER OPTIONS to fund this pension. I want to know what they were. I want to know more about Township finances... more than what is found in the annual budget page. I want to know what facts gave the township a AAA rating? Is there another "large pot of cash" somewhere that could relieve some of this problem without incurring more debt to "save" money?
Please....do some thinking.
The township wants to spin this issue to be.... saving you money.... by borrowing cheaply.
They are the ones that put you into this debt by their decisions.
We are not getting out of this debt...we are attempting to manage the pension fund for 20 years....with a lot of risk, and all the risk is on YOU... not the employee. We are not solving the problem.
"POTS OF CASH" ..... the government/ taxing authority way to try to convince you that it's not costing you money... you are "saving money".
Sorry, a debt is a debt.
Marcia
PS: for my friends in the Bloomfield Hills School District living in Bloomfield Township:
I see the Bl. Hills Schools are patting themselves on the back in this article about how much money they are "saving" YOU in today's bond market. I wonder how much TOTAL BOND debt the Bloomfield Township w/ Bloomfield Hills Schools taxpayer is obligated to pay? Over $200 million?
Subscribe to:
Posts (Atom)