Mayor Hall gets support in Lansing for flexibility bills

Local governments are one step closer to a four-bill package being approved that would alleviate some of their financial burden caused by a down economy. The bills passed the House Banking and Financial Services committee unanimously last Thursday (9-0) after testimony from Michigan Municipal League (MML), Huntington Woods, Standish and Rogers City mayor Beach Hall.

House Bills 5550-54 would amend various laws dealing with public financing bonds used for community improvement projects. These bonds are often entirely dependent on property value increases and backed by the municipality. With plummeting property values, municipalities are using more general fund money than anticipated.

?I presented the committee with a six-page written document of the Rogers City experience in trying to refund, is their term; refinance, my term, the marina bonds that were issued in 1995 and 2000, that have created a major cash-flow issue for the marina,? said Hall, who appeared before the committee with harbormaster Brian Wagner. ?We had to go through two refinancing plans to get one accepted, to be in compliance with state law.?

The city still owes $385,000 on the bonds. Hall also testified of the importance of having the bills passed as promptly as possible, so the city could refinance its bonds using a loan from one of the local bank, ?to get out of our cash-flow issue.? Wagner will be part of the legislative record, answered questions posed by the committee.

?The (state) Legislature must recognize the n

eed for additional tools that will aid local governments as they continue to struggle with reduced revenue sharing, declining property taxes and increased employee costs such as health care,? said MML President and Huntington Woods Mayor Pro-Tem Jeff Jenks.

State law discourages debt restructuring for local governments to improve cash flow. ?Using general fund revenue for bond payments will force communities to cut vital services and lay off employees,? said MML Director of State Affairs Summer Minnick. While the private sector has the ability to restructure its debt, local governments generally do not.

The MML is working with legislators to move the package to the House floor as soon as possible. Bill sponsors include Jeff Mayes (D-Bay City), Tim Moore (R- Farwell), Richard Hammel (D-Flushing), Tim Melton (D-Auburn Hills) and Barb Byrum (D-Onondaga). Similar bills were introduced last legislative session. Hall said Andy Neumann (D-Alpena) sat in on the hearing.

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