City Finds $560,000 in Fund Balance to Pay Down Unfunded Retirement Liabilities

 11/26/2018 - 23:33

After an audit presentation Nov. 19, Saline City Council voted to take money from its fund balance to pay down employee retirement liability.

Saline’s books received high marks from Plante Moran. The firm noted that Saline’s general fund balance had grown to beyond 23.5 percent of the city’s general fund budget. City council policy dictates the city carry a fund balance of between 15 and 20 percent of the budet. Plante Moran also called attention to the city’s unfunded retirement liabilities – about $9 million in retirement and $5.6 million in health care benefits. Martin Olejnik, partner with Plante Moran, said many municipalities have more dangerous unfunded liability situations. Still, he said, the liabilities were high enough that fluctuations in the market could prove harmful.

Council took Plante Moran’s advice to heart. Later in the meeting, Council voted 6-0-1 to amend its budget, taking $560,000 from the fund balance to chip away at the unfunded liability.

“It’s the responsible and prudent thing to do,” Mayor Brian Marl said.

City Treasurer Mickie Jo Bennett said that even after amending the budget, the fund balance is estimated at 19.45 percent – closer to the high end of city council’s target.

Councillor Dean Girbach said the city’s fund balance grew because of land sales.

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Tran Longmoore
Tran Longmoore is a veteran community journalist. He is founder and owner of TheSalinePost.com. He is co-publisher of The Saline Post weekly newspaper. Email him at tran@thesalinepost.com or call him at 734-272-6294.

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