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Tax Rate to Rise 2.95 percent

By James Lomuscio

Even without the exact numbers on Westport’s long term health care liabilities, the Board of Finance tonight unanimously set a 2.95 percent tax increase for the 2011-12 fiscal year which begins July 1.

The new mill rate is now 17.43. In dollars that means that the average homeowner will now pay $17.43 for every $1,000 of a home’s assessed value. But the exact change will depend on how much last year’s revaluation affected the assessed value of the property. Last year, the tax increase was 3.05 percent after no increase the previous year.

In setting the new rate, the board agreed to move $3.5 million from the town’s reserve fund into the OPEB trust (other post employment benefits) to offset what would have been an even greater tax increase.

The motion was made by Helen Garten, board chairman, a Democrat, and seconded by Avi Kaner, the senior Republican on the board.

“I think Helen’s proposal is a very responsible proposal,” said Kaner.

“It’s a compromise considering we’re almost running blind on the OPEB liability. They (the town’s actuaries) refused to give us an estimate, and here we’re setting the mill rate weeks before we have the numbers.”

The finance board had hoped to have all of the OPEB numbers in before setting the tax rate.

Estimates are that the OPEB liability is more than the earlier projected $50 million liability—to be paid over 30 years—and the finance board had wanted to determine the town’s annual required contribution (ARC) which would be figured into the town’s budget and ultimately, its mill rate.

However, at a special meeting with Pentegra Retirement Services of White Plains, N.Y. last week, Jeff Kissel, who oversees Pentegra’s actuarial services, said that the figures would not be available for at least two weeks.

At that meeting, First Selectman Gordon Joseloff suggested the board set the new tax rate tonight, as the new fiscal year begins at the month’s end.

The exact OPEB figures are not yet available due to what has now been determined to be an an inaccurate 2008 OPEB projection by Retirement Services Group, a service that Pentegra has since acquired.

More than 500 current employees and retirees from the Board of Education and library had not been included, Kissel said, adding that the exact reason was still not known.

At tonight’s meeting Kaner noted that with $750,000 already budgeted for OPEB in the 2011-12 town budget, adding $3.5 million would amount to $4.25 million in the OPEB trust.

Garten added that the finance board also had a commitment of $500,000 from Joseloff in 2011-12 budget turn backs to help offset the $3.5 million. In doing so, she said, the town’s reserve fund will remain healthy at 9.1 percent.

While all agreed on the new tax rate, several board members expressed concern about the overall budget process.

“I think we’re at risk at leaving the taxpayers with an impression that the only problem we’re facing is a problem with OPEB,” said Kenneth Wirfel, who said that the budget reports from the Finance Department have not be “timely or accurate.”

“Three long years have passed,” Wirfel said about the actuarial error. “I can no longer rely on the correctness of the information provided.”

Thomas Lasersohn said that the numbers he had crunched figured the ARC to be closer to $5.26 million.

“We have to make those (health care) plans more reasonable, and if we can, we can reduce our OPEB liability,” Lasersohn said. “They are real dollars, and we have to get them under control.”

Brian Stern took the opportunity “to get off my chest” the frustration he said he has felt during the past budget season over a resistance to keep costs down via consolidation between the town government at the Board of Education.

“In my judgment, zero progress has been made to solve the problem,” he said. ” …There is no plan for improved productivity and to eliminate the duplication of activities. “

Stern also said there has been “no formal plan” for pension and healthcare modification.

“And with teacher contracts next year, things will only get worse,” Stern said. “We ask for ,and we spend.

“The town tax increase is the blank check every year,” he added.

“From my perspective the current process is fundamentally flawed. …It’s not fair for the rest of our town to pay for waste and and an uncertain future. It is absolutely not impossible. Next year, we must do better.”

On the positive side, Garten noted, OPEB questions and concerns are being addressed.

“We’re going to ask the actuaries to update the OPEB numbers every year so we have it in advance of our budget discussions,” said Garten. “I think we are going to have better procedures next time.”

Speaking during the public portion of the meeting, Charles Haberstroh, a former finance board member and now a selectman, said he empathized with the board.

“It’s important for the town to know who is accountable for the kind of situation we find ourselves in,” said Haberstroh.

“The second thing is, what message are you sending to your constituents by having a tax rates of 2.95 and a reserve of 9 percent in light of what’s going on? It sounds like business as usual to me.”

“It’s a lot better than a 3.95 budget increase,” Garten retorted about the tax bump.

“Call me an optimist, but finally we’re going to focus on this (OPEB) problem. We’re essentially doing the best we can.”

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