Acton's OPEB funding delay could cost taxpayers extra $120 million

Acton faces a $100 million liability for future retiree healthcare costs called OPEB. According to the town meeting warrant (see attachments or page 18 of Town Warrant, Section C, OPEB), Acton plans on saving $500,000 next year towards this liability, and then increasing this amount by $200,000 a year. Unfortunately, this plan is actually going to increase our liabilities in the long term, not decrease them.

The plan as shown in the Town Warrant would cost Acton's taxpayers over $120 million, or actually increase OPEB's cost from its current present-value of $100 million, according to an analysis done by Acton Forum. (See attachments). This assumes that the $200,000 annual increase is carried forward until it meets the Segal Report's recommended annual saving level of $5.3 million. (See Segal Report, page 4).

The Acton Leadership Group (ALG) proposed this saving schedule after protracted negotiations among the three boards. What appears in the town warrant was a compromise between what the school members wanted ($500,000 a year with $100,000 annual increases) and what FinCom proposed ($500,000 a year with $500,000 annual increases.)

FinCom showed that the schools funding plan would cost an additional $10 million over the next 5 years, but its plan would only cost an additional $5 million. (See attachments, "FinCom-OPEB"). However, the FinCom analysis only looked at the municipal liability, not the total liability, and stopped after 5 years.....

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