EagleTribune.com, North Andover, MA

Haverhill

March 30, 2014

Mayor, council to duke it out over pension pitch

Three proposals would boost payments to 1,000 retired city workers

HAVERHILL — A long-smoldering battle between the Haverhill Retirement Board and Mayor James Fiorentini over the board’s push to increase payments to 1,000 retired city workers is set to flare up this week.

For more than two years, Fiorentini has held off a proposal by the board to increase pension payments to retirees by raising the maximum base amount on which annual 3 percent cost-of-living pay increases would apply.

The board wants to increase the base amount, which is currently $12,000, by $1,000 per year for three consecutive years. Increasing the base amount by $1,000 would give retirees an extra $2.50 per month, or about $30 more in the first year, in their checks.

But, according to city officials, raising the cost of living base for retirees by $1,000 would cost the city $178,000 in just the first year. Raising it by that amount in three consecutive years would cost $580,000 and add about $20 million in future unfunded pension liability, the mayor said.

Pension liability is the amount the city would be obligated to pay if it went out of business or was otherwise unable to generate revenue. Haverhill’s unfunded pension and health insurance liability is currently about $500 million, the mayor said.

The council approved the Retirement Board’s proposal two years ago, but Fiorentini vetoed the measure back then, setting up the long-running stalemate.

“I have opposed and continue to oppose increasing the COLA base to $13,000,” Fiorentini said. “Spending $178,000 to is not warranted given the very small increase of $2.50 per month it would provide some retirees.”

The mayor stressed the board’s proposal would only apply to retirees who make more than $12,000 per year, thereby ignoring the lowest paid retirees, he said.

Last week the mayor offered a compromise he said would give every retiree a pay boost.

The council’s Administration and Finance Committee reviewed it, said it did not go far enough, and offered its own compromise. The committee then scheduled the matter for a vote of the full council Tuesday at 7 p.m. at City Hall.

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