Westport RTM OKs partial payment on amount owed retiree fund
Published 1:00 pm, Wednesday, March 2, 2011
Grappling with an underfunded "Other Post-Employment Benefits" account for Westport's municipal retirees, the Representative Town Meeting on Tuesday approved $1.2 million to partially fund the annual required contribution (ARC) for the current fiscal year.
Some RTM members, however, wanted the contribution doubled.
However, Finance Director John Kondub said he will likely seek another contribution to the fund before the fiscal year wraps up June 30. It all depends on "how our revenues look in the middle of May," he said.
OPEB primarily represents medical costs for the town's retirees before they are eligible for Medicare, and in 2007, government accounting standards required that towns start disclosing what their accrued OPEB liability is.
Westport's liability was estimated at the time to be in the ballpark of $50 million.
"That means we made promises that had a value of $50 million, but we hadn't put anything aside to meet those promises," said Board of Finance member Tom Lasersohn told the Westport News the morning after the RTM session. "We started a schedule where we had to contribute to an OPEB Trust. We were supposed to have funded $5.9 million a year, but the town hasn't been doing that."
The first contribution, in 2006, was $1.6 million. The following year it was $4.3 million. The 2010 contribution was $3.1 million, when it should have totaled $5.9 million, according to Lasersohn.
District 7 RTM member Alan Bomes said Tuesday night, "While our obligation continues to grow, our funding has not kept up." He added, "If not planned out properly, this will negatively affect taxpayers down the road."
Fellow District 7 member Jack Klinge, looking at Kondub and other officials, said it would be "irresponsible to plan to fall further behind."
"I don't find that acceptable," he said.
"We need the administration to request more," said RTM member Michael Rea.
The vote on the $1.2 million contribution was 29 in favor, with one member -- Steve Rubin -- abstaining.