Mayor Worries About Paying City Employee Retirement Costs

Mayor James J. Fiorentini is worried about the city’s unfunded pension liability—the money city workers are paid during their retirement years.

During Tuesday’s 2017 budget presentation before the city council, he discussed how the city can make a dent in the estimated $167 million future shortfall for retiree pensions and health care cost.

Fiorentini told councilors “small changes make a big difference” in paying “other post-employment benefits (OPEB).” As examples, he noted the city has enacted, since council approval two years ago, a 25 percent employee and retiree contribution to city health insurance premiums which, so far, resulted in “a $52 million drop in our potential OPEB liability” and could, potentially, drop it further.

“This past couple of weeks I sent a letter out to about 300 retirees, saying everyone from now on has got to pay 25 percent of their health care premiums. Everyone in this room who works for the city and has city health insurance pays 25 percent of our benefits, but we had a small number of people that paid either 20 percent or 15 percent going back many years. That small change in liability—if we are allowed to do it. There is a bill pending in the legislature that would stop us—will save $3 million in our OPEB liability,” Fiorentini said.

He also noted a proposal to move health care trust fund money into an OPEB stabilization fund established last year would bring that fund’s balance from an initial $200,000 to “around” $1 million. But at the same time, Fiorentini warned of “the tremendous danger we have from pensions and healthcare.”

“Small percentage increases in pensions and healthcare can really make a tremendous dent in the budget and those are things we need to watch all the time. Our pensions are now 52 percent funded because of an increase in the stock market. We have a lower funded liability percentage—lower is not good—than the state and national average,” he explained.

The council is scheduled to begin a series of review sessions next week for Fiorentini’s proposed, total city spending plan of $197 million, including water and wastewater operating budgets, for the year beginning July 1. The first session, at 7 p.m., Monday, May 16, in the council office, room 204, at Haverhill City Hall, will include further discussions with Fiorentini on “needs or gaps not addressed in the budget,” a capital improvement plan and spending for the mayor’s office and Information Technology departments.

8 thoughts on “Mayor Worries About Paying City Employee Retirement Costs

  1. This is nothing more than this incompetent mayor doing what he does best…Covering his own A$$.

    He wasn’t too worried about unfunded pension liabilities when he approved raises for every union in the city, was he?
    What greater way is there to increase unfunded liability than to increase the total payout of individual employees at the time of retirement? Yet he continues to approve raises over and over.

    mayor Taxman wasn’t too worried about unfunded pension liabilities when he decided not to fire 29 city employees who conspired with each other to steal over $54,000.00 from The City of Haverhill during the EMT scam. That decision alone would have reduced the cities pension liability and delayed pension payouts for at least 20 years for those 29 positions.

    mayor Taxman wasn’t too worried about unfunded pension liability when he chose not to pursue the pension of a city cop found to be literally sleeping on job. When found to be sleeping on the job that cop walked right in and retired and the mayor did absolutely nothing about it. Depending upon how long that hack cop lives not pursuing his pension could end up costing the city over $2MILLION!! And this mayor did nothing to stop that!!

    As usual, what this says is completely different than what he actually does.

    • Thanks Ass-Hat. Do you actually have anything to say that anyone cares about. You are like a broken Trump record repeating itself through eternity but with really deep scratches. Uggh ! You are so stupid it hurts my Hypothalamus! Your wife must wear sound canceling headphones 24×7.

        • Not a liberal ass-hat Just an educated reasonable conservative. I’m don’t see liberals hiding in every corner. I am insulting you all because your idiots. That s the fact Jack………Stripes…. Drop the mic.

    • City employees, UNIONS AND ELECTED OFFICIALS have to pay attention to this deficit, working together to eliminate the UNFUNDED PENSION AND UNFUNDED HEALTHCARE LIABILITIES. Bottom line is that we as a City, HAVE PROMISED MORE THAN WE CAN DELIVER, and the taxpayers can no longer afford to further run up the tab to pay for pension and health. If employees and unions continue to insist on salary and pension increases that are beyond the City’s ability to handle, employees will end up with nothing, and the City of Haverhill will be bankrupt.

      —- Not good for anyone and we can’t depend on The Commonwealth of Massachusetts or the Federal Government to make up the deficit, because THEY ARE BROKE ALSO! They just refuse to acknowledge their financial condition!