Shiawassee County rejoins MAC

shiawasseeThanks to a vote by the Shiawassee Board of Commissioners this month, MAC will enter 2017 with all 83 counties as dues-paying members.

“This is excellent news for MAC and, more importantly, our members,” said incoming Executive Director Steve Currie. “Our collective voice will now be stronger at the State Capitol in a year when we are seeking major reforms to aid county governments on financing public services.”

Shiawassee County Board Chairman Hartmann Aue cited MAC’s services and the county’s financial improvements for the move.

“In two years, Shiawassee County has completely changed our financial condition. We have generated a record surplus of nearly $800,000, paid down long term debts by more than $850,000 and have grown our ‘rainy day fund’ from $23,000 to more than $400,000. … I felt now was the time to rejoin MAC and provide the Board of Commissioners additional resources to govern successfully,” he said. “The services and trainings provided by MAC will only help Shiawassee County continue the positive momentum from the foundation set in place by the 2015-2016 Board.”

With its membership, Shiawassee now can leverage the advocacy, educational and networking opportunities MAC offers all its members, plus special service arrangements with such business partners as Nationwide Retirement Solutions, Allstate Benefits and Lincoln Financial.

Alger’s Doucette appointed to NACo Board

jerry-doucette-sept-2015Jerry Doucette, chair of the Alger County Board of Commissioners, has been appointed a member of the National Association of Counties (NACo) Board. The appointment was made on Dec. 9 at a NACo Board session in Tallahassee, Fla.

Doucette, who also serves on the Michigan Association of Counties’ Board as Immediate Past President, was selected to replace Oceana County Commissioner Evelyn Kolbe, who passed away in November.

“With this board appointment, I will be able to continue my work on the Economic Development and Workforce Committee, the Rural Action Caucus, Veterans Committee and Membership Committee with NACO,” Doucette said. “It is so important for MAC and NACo to partner together to protect counties’ needs for funding and continue to be the voices of county government to state and federal governmental leaders.”

The NACo Board “governs the strategic goals, policies and priorities of the association, as well as oversees the association’s policies, business and property.”

“We are pleased that Jerry Doucette will be able to continue Evelyn’s fine work on behalf of Michigan at the national level,” said Stephan W. Currie, MAC’s executive director. “Jerry’s knowledge of the issues, gained from extensive service with MAC and NACo, will pay off for Michigan’s county governments.”

House takes up OPEB reform package

retirementIn an effort to address the more than $11 billion in unfunded accrued OPEB (Other Post-Employment Benefits) liabilities for local governments across Michigan, the House is reviewing a package of bills aimed at changing the insurance benefits for government retirees. The 13-bill package, put forth by Speaker Kevin Cotter (R-Isabella), creates the Local Government Retirement Act and amends all the relevant statutes to require compliance with the main bill, House Bill 6074.

Of Michigan’s 83 counties, 26 do not offer OPEB, while another six are currently at least 80 percent funded in the benefits, which would make them exempt from some of the requirements in the act. The remaining 51 counties have an accumulated unfunded liability of approximately $3 billion.

Breakdown of counties by OPEB commitments
(Updated 1/3/17 with corrected figures for Livingston County)

The six counties above the 80 percent mark — Barry, Cass, Clinton, Macomb, Oakland, Ottawa — would be exempt from the changes to current employee and current retiree OPEB benefits, regardless of whether or not the employees are currently vested in the benefit. These counties, however, would still be subject to the provisions for Medicare eligible retirees, Medicare supplemental policy contributions and for all new hires as detailed below.

The main provisions of the package include:

  • Requires an “unvested” retiree to contribute a minimum of 20 percent toward the cost for post-employment insurance and caps a local government’s contribution to a maximum of 80 percent.
  • Limits local governments’ contributions toward OPEB benefits for all new hires to a maximum of 2 percent of the employee’s base pay.
  • Requires all retirees to be on Medicare when eligible.
  • Caps local government contributions to Medicare supplemental policies to 80 percent of the cost of the policy.
  • Prohibits a local government, regardless of whether or not it meets the 80 percent funded threshold, from providing insurance benefits to retirees who are eligible to participate in a medical benefit plan or retirement health benefit plan offered or provided by an employer other than the local government.
  • Directs that “vested” employees will be exempt from changes in the act. To determine whether or not an employee is vested/exempt, the package states that if a collective bargaining agreement entered into before act’s adoption clearly and expressly confers a fixed, unalterable right to a vested retirement health benefit for an unambiguous duration, then the act does not impair that vested retirement health benefit for that duration.

After consulting with the Executive Committee of MAC’s Board of Directors and several county administrators, MAC took the position of “support in concept” and testified before the House Local Government Committee on that theme on Dec. 1. MAC noted in its testimony our appreciation for providing local governments with some assistance in tackling this looming obligation by taking this issue off of the bargaining table and for the state diverting legal challenges to the proposed law from the local governments that seek to amend the benefits for unvested employees and retirees.

MAC also conveyed concerns with the approach, including:

  • Many Michigan counties already have acted to change these benefits for current employees and for new hires. This should be recognized by the state.
  • Local control has been, and continues to be, a vital component of good governance, but the state needs to “untie the hands of the county so they have the tools necessary to address the issues.”
  • This approach focuses only on fixing local government budgetary issues by going after the costs associated with the employees that provide the public services we all rely upon. MAC would like to see the Legislature actually address the revenue side of the equation.

In addition to the concerns outlined above, MAC will be working with the Legislature on language changes and certain provisions that need to be addressed for specific counties. We anticipate additional hearings next week. For more information, contact Deena Bosworth at Bosworth@micounties.org