City Councilor Ken Cockayne sent this along:
These are very trying economic times for all and as a councilman and taxpayer I feel we should be looking for ways to save the taxpayers money and control the city budget from growing and putting more strain on all of our pocket books. As the mayor and the council look for ways to save money and control spending I believe we also have an obligation to plan to pay for some of the benefits that we have promised to our fine city work force. One such benefit is retiree healthcare which we have promised to provide for 10 years after retirement at no cost to the retiree. We all know that healthcare costs continue to climb at an annual rate of 10 percent and the city’s healthcare plan is no different. While these costs inflate due to causes that are beyond our control at the local level, we can begin to plan on how we are going to meet and fund this liability in the future.
One such option is currently being explored by a committee right now called the GASB 45 Committee. They are looking at moving some of the over funding in our city pensions to a trust established to pay for healthcare costs in the future. Currently we pay as we go to fund this liability at 2.7 million per year for retiree’s health benefits; in addition we have an actuarial liability of 4.4 million dollars per year for a total liability of 7.1 million dollars per year to taxpayers. This is built into the City budget and it will continue to grow as we have more retirees and costs continue to rise for healthcare. By developing a fund that is pre funded with these extra funds from the city pension we could begin to build a fund, similar to our pension funds, to pay for this liability. This would reduce the current item from the budget and potentially save the city millions of dollars in the future.
There is resistance to doing this from some of our city unions as they feel they should be able to negotiate this move and get something in return. However, if we move the money 2 things happen that benefit the union. First, all current employees become vested in their pensions at the moment the money is moved and secondly the city could not change the healthcare plans' costs or benefit level for 5 years after the transfer. These are the conditions set by the IRS to allow this to happen and they both benefit the city workers.
This committee is having a public hearing on Tuesday February 3rd at 5:00pm in the city council chambers to hear concerns and comments from the tax paying public. I ask that you make every effort to attend and let your voice be heard as Bristol as a real opportunity to save all of us some money and begin to look towards the future. This committee will be voting to either recommend this move or not and the public should have their say because either way the taxpayer is on the hook for these liabilities regardless if the pension and healthcare trust are funded or not.
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