HAVERHILL — Mayor James Fiorentini and the Retirement Board will take another week to fine tune their arguments before facing off over the board's proposal to increase benefits for city retirees.
The board wants to give retired city workers more money each year. The mayor says the city cannot afford the hike.
The board recently approved, on a split 3-2 vote, increasing the maximum base amount on which annual 3 percent cost-of-living pay increases would apply. The board would increase the base amount, which is currently $12,000, by $1,000 per year for each of the next three years, capping at $15,000 in 2016.
The City Council, which must approve the increase for it to take effect, was set to consider the proposal last night, but agreed to postpone it to Sept. 10 at the Retirement Board's request. The board said it needed more time to gather additional financial information.
Information provided by the board shows a $1,000 increase to the cost-of-living base would add $30 per year to a retiree's benefits. The information also said the median pension for city retirees is $16,600.
There are 1,067 retirees in the Haverhill system and 894 current city workers paying into it, officials said.
In total, the mayor said it would cost the city about $500,000 to increase the cost-of-living base amount to $15,000 over three years, and about $4.8 million over 20 years.
Fiorentini said he "strongly opposes" the proposed increase and will urge councilors to reject it. He said the city's unfunded pension liability is about $155 million and that increasing payments to retirees would grow that shortfall.
The mayor, who vetoed a similar measure a year ago after it was passed by the council, said increasing the unfunded pension liability could jeopardize Haverhill's bond rating. The rating effects how much interest the city pays when it borrows money.
Fiorentini said he intends to bring the city's financial consultants and analysts with him to next week's council meeting to help make his case against the proposal and to verify information about potential costs and impacts from the measure.
The mayor said he might have been willing to increase the base amount to $13,000 as a compromise, but the board voted for the full $15,000.