Long-time Oakland County, Mich., Executive L. Brooks Patterson — recovering from an August car accident in which he was seriously injured — said the triple-A county is starting to rebound from the Great Recession.
Patterson said the county will see a 1% increase in property values this year after six straight years of decline. He touted private investment stemming from several economic development projects, and said the county’s prized three-year budgeting process shows a balanced budget through 2015, “and we’re tinkering with 2016.”
“Oakland County learned its lesson in 2008 and 2009: we had an overabundance of our jobs located within one sector: the automotive sector,” Patterson told the audience at his 19th state-of-the-county address. “And when that sector went south in 2009, it took 60,000 high-paying Oakland County jobs with it, and we’re still trying to recover from that disastrous year. There’s a lesson to be learned: you have to spread your employment risks over a number of diversified sectors.”
Patterson said the county was poised to save $100 million from an upcoming refinancing of roughly $500 million of outstanding certificates of participation. The county issued the COPs in 2007 to fully fund its retirement health care benefit liability, making it the first county in the United States to do so.
The borrowing allowed the county to make annual debt-service payments of $48.5 million, compared to $60.2 million that would have been required without the bond issue, according to Patterson.
The county expects to trade its current rate of 6.2% for a rate of around 2.9% on the refunded debt. “That’s $100 million cash. In addition, because of the growth in the investment value of the county’s two retiree health care trust funds, the county will be able to pay down the principal on the outstanding COPs balance by at least $75 million. This will leave the two combined trust funds 110 % funded,” he said.
