Three volunteer members of Grand Traverse County's Pension Advisory Board submitted their resignations Monday.
The county has a pension debt of more than $50 million. The advisory board is working to identify ways to reduce it and present those findings to county commissioners.
In their letter of resignation the citizen members – Christopher Radu, Robert Zimmerman and Michael Gillman – say, "our recommendations have been solicited, but appear to be ignored."
In response to their resignations, County Administrator Tom Menzel said he was “surprised” and “very disappointed," and he thanked them for the effort they had devoted to "helping reverse years of bad decisions" that landed the county in debt.
Radu, a financial advisor and long-time Traverse City resident, says they hope their resignations will push voters to get more involved.
The citizen members want the county to put a millage before taxpayers, but they say it appears county commissioners appear more interested in a bond.
"We unanimously oppose bonding," the citizen members said in their resignation letter.
"I don't know about you, but I've never known anyone to get out of debt by borrowing more money," says Radu. "That's kind of like digging a hole to China, and hoping you end up back in Michigan. It's just not going to happen."
Radu says if voters approve a millage, the money goes directly towards the pension obligation.
"If you borrow the money via bonds, roughly a third of the total borrowed money pays just interest," he says.
He says, therefore, bonding ends up costing the taxpayer more money than a millage.
County Commissioner Sonny Wheelock says no decisions have been made, but he is interested in discussing the bonding option with commissioners.
"At least in my mind [bonding] is similar to refinancing your house," Wheelock says. "You have a certain amount of debt, but if you can get a better interest rate or you can spread the payment out, you can get a lower or a constant payment."
And that's what the money from bonds would go towards: an amortization payment.
Radu says a number of cities around the country have gone with the bonding option, and it has not gone well.
Wheelock hasn't thrown his suppport behind bonding yet, but he says "so far we really haven't truly had a fact-filled discussion about that option."
Wheelock says he does not support a millage.
"I personally don't believe that the taxpayers of the county as a whole should be asked to pay this on their property taxes," he says.
He says with bonding, taxpayers will not be asked to pay any additional money.
County commissioners could discuss funding the pension debt during a May 10th meeting.