Saturday, 23 March 2019

Lakeville Selectment considers increasing town retiree benefits fund

LAKEVILLE — After reviewing the employee retirement benefits (OPEB) report for the town for the fiscal year that ended on June 30, selectmen began debating the possibility of increasing the annual contribution to the reserve fund being built to cover the anticipated costs of future health and life insurance benefits for its retired workers.

The report indicated that the town’s liability for OPEB costs will stand at about $20 million by the year 2028, if the annual deposits to the OPEB liability fund aren’t substantially increased from the current $230,000 a year funding level.

Chairman of Selectmen Aaron Burke noted at the board’s last meeting that it would take at least 20 years for the town to fully fund its projected OPEB liability if the annual appropriations increase. He suggested “it looks more like 30 years” if Lakeville doesn’t step up its yearly contributions to cover the anticipated cost increases.

Selectman Mitzi Hollenbeck indicated that “the OPEB liability dropped about $2 million from the previous year” but pointed out that steady increases in insurance costs each year make it more difficult to reduce the growing liability by any significant measure.

When Burke suggested that the board consider hiking the annual deposit into the OPEB reserve account to $300,000 per year, keeping the full-funding timeline to 20 years, Hollenbeck countered with the possibility of appropriating $400,000 per year for OPEB liabilities “if we have the money.”

Ten years from now, it will cost the town about $1.1 million per year in OPEB funding to “pay as you go” and cover benefit costs for future retirees, Hollenbeck estimated.

At that point, Lakeville should have its pension liability projections “fully funded,” said Town Administrator Rita Garbitt. That leaves insurance coverage the main issue of concern for town officials, as health insurance coverage costs increase annually by as much as 10 percent a year.

At present, town employees pay half of their health insurance plan costs, while the town picks up the other half of the coverage premiums.

In some area communities, town officials are pressing for more insurance costs to be assumed by employees, or encouraging workers and retirees to switch to cheaper alternative insurance plans to reduce future OPEB liabilities.

The state Department of Revenue is encouraging cities and towns to make stronger efforts to reduce future OPEB costs, now being considered a clear liability on municipal government balance sheets for the first time.


There’s no question that a few expensive retirements of key personnel will be impacting the town’s retirement liabilities in the next few years. The town has just started the search for a replacement for retiring Fire Chief Daniel Hopkins, and Police Chief Frank Alvilheira has announced his plans to retire within the next few years.

Next headed into retirement is Garbitt, whose current employment contract expires on June 30, 2019. Selectmen recently indicated they will meet with the current town administrator in September to either confirm her retirement date, or seek a short-term contract extension while a replacement is sought.

Garbitt suggested that her replacement be on the job at least a few months before she retires so she can help train the new hire and ensure a smoother transition. She indicated that January of 2019 would be a good time to begin searching for a new town administrator.

Selectmen said they would have a better indication of Garbitt’s retirement date by the beginning of May, the deadline for the filing of a request for payment of any unused vacation and sick time payouts that would have to be included in the Fiscal Year 2020 budget plan.

In other business at their July 25 meeting, selectmen voted to sign an amendment to the Inter-Municipal Agreement with Middleborough officially adding Baldie’s Restaurant at 40 Main Street to the list of water line customers served by the neighboring town.

The board also voted to finalize the warrant for the state primary election, scheduled for Tuesday, Sept. 4, 2018.


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