02-13-14 MarionMakin

Acushnet looking to save on retirees; DOR reports on BPWBy Michael SmithNeighb News CorrespondentFinancial consultants addressedthe future of benefits for Acushnettown retirees during a presentation tothe Selectboard on Monday, 2/10.Acushnet Finance Director CathyDoane introduced the presenters tothe board to kick off the one hour andforty-five minute presentation, butnot before Ms. Doane told the boardthat the town possesses a surplus ofnearly $400,000 in overlay funds.OPEB stands for Other PostEmploy ment Benefits, or moreplainly, “a community’s health, dentaland life liabilities for your retirees,”said Chuck Patterson, a repre -sentative from Bartholomew, thetown’s investment advisors.Mr. Patterson provided a powerpoint presentation on OPEB and howit will affect Acushnet if leftunchecked. He said that he was notgiving legal or tax advice, but only anoverview of what OPEB is and meansfor Acushnet.“If you don’t deal with it, its goingto effect the town down the road,” Mr.Patterson said, adding that ifAcushnet does not deal with OPEB, itcould lead to tax increases and areduction of services.Mr. Patterson also talked abouthow crucial the town’s bond ratingcould be affected if OPEB is notaddressed.“One of the main questions a bondrating company will ask a town is if youaddressed OPEB,” said Mr. Patterson.“OPEB could very well affect if a towngets to borrow money or not.”Factors for growth of OPEBliability, Mr. Patterson said, includenumber of participants, annual healthcare costs, and assumed rate ofreturn on investments.In funding OPEB, Mr. Pattersonmentioned potential funding optionsto the board including: Acushnetdedicating a percentage of townrevenue; free cash; a dedicatedrevenue stream; establish costsharing structure with employees;and pension funding.Mr. Patterson also briefly men -tioned strategies in alternativeinvestments and specific risks thetown would be taking.Selectboard member David Wojnarasked how many municipalities in thestate have undergone tackling OPEB.Mr. Patterson answered that close to100 communities are addressing theissue.“Once it’s in, it’s there,” said Mr.Patterson of money planned forretiree benefits. “Rating agencies liketo see a plan.”Steve Lemanski, a principalconsultant from Milliman Actuarial,followed up by talking about optionsfor funding.Mr. Lemanski provided the boardwith three baseline scenarios,including front-loading contributions,and how they could invest moneyinto the trust, while showing itsfuture projections when fully fundedin 25 years.Any plan would need a “reasonableset of time to build up somethingmeaningful,” said Mr. Lemanski,adding that 20 years would not beA loss of water that isunaccounted for was alsodiscovered in the probe...costing taxpayers over$150,000 a year.reasonable for a trust to be fullyfunded.Town Administrator Alan Coutinhosaid the trust should be addressedeach year as a line item budget, butalso asked Mr. Lemanski if there werefuture changes in the law, could thetown use the money to pay currentemployees.“The purpose of an OPEB trust isto pay retirees, nothing else,” said Mr.Lemanski.Ms. Doane concluded thepresentation by recommending thatthe board use the $400,00 surplustoward the OPEB liability to ease taxrelief on taxpayers.“If we don’t start funding ourliability, we will see an increase intaxes. We also need to protect thetown’s services,” she said.Mr. Wojnar decided not to vote onthe issue until all municipal commit -tees hear the information and havetheir say on the matter. Selectboardmember Kevin Gaspar Sr. supports it,he said, but agreed with Mr. Wojnar tohave further discussion with theboard on the materials presented.The board voted unanimously totable the matter for further review.The ongoing saga of the AcushnetBoard of Public Works came closer toa conclusion when Zack Blake, arepresentative of the Department ofRevenue, spoke to the board of hisdepartment’s report on the financialmanagement of the town’s Board ofPublic Works.The report was requested by theSelectboard.Mr. Blake said that their Decemberreport probes into the practices ofthe BPW and interviews with severalpeople including Acushnet TownAdministrator Alan Coutinho, FinanceDirector Cathy Doane, and varioustown officials.“Based on our observation, we sawa lot of leadership issues,” said Mr.Blake of the BPW.The report stems from publicoutcry of years of controversialpractices by the municipality, whichincluded questionable rate increases,sewer-billing practices, and construc -tion costs.Town meeting voted in December2013 to eliminate the Board of PublicWorks and transfer oversight to theSelectboard.One finding Mr. Blake noted in thereport was a long expired purchaseagreement with New Bedford by thetown’s BPW, which Mr. Blake saidexpired more than five years ago.The report also mentions the lackof a capital improvement plan by theBPW.“This is an aging infrastructurefrom the 1920’s that needs to betackled with a long-term plan,” saidMr. Blake of Acushnet’s water andsewer system.A loss of water that is unaccountedfor was also discovered in the probe,which stated an annual loss of 20%,costing taxpayers over $150,000 ayear. Mr. Blake pointed toward agingmeters as part of the issue.Recommendations by Mr. Blakeinclude reviewing the sewer ratestructures, establishing a capitalimprovement program, and address -ing the expired New Bedford waterpurchase agreement in order to movethe department forward.“The whole lynch-pin of this reportis having the Selectboard oversee theBoard of Public Works,” said Mr.Wojnar.Page 16Thursday, February 13, 2014Fairhaven Neighborhood News