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Lenox Selectmen Weigh Options For Retirement Costs

By Andy McKeever
iBerkshires Staff
04:28PM / Thursday, January 09, 2014
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The Board of Selectmen met on Wednesday night.

LENOX, Mass. — Selectmen are still trying to decide how to best tackle unfunded retiree liabilities as they prepare the next budget.

In recent years, municipalities across the country have been including such future liabilities as heath-care costs and pensions for expected retirees to their financial books.

In the last two years, the town has set a task to create an account to cover those liabilities but how to do that while still maintaining level budgets hasn't been fully developed.

"This is the first couple of years we've recognized the problem and started contributing to it. And our bond rating has gone up," Selectmen Chairman David Roche said.

This year, the town is looking to put aside some $500,000 toward that fund but it needs to find the best practices to do so while still maintaining services. The Selectmen met with School Committee Chairman Donald Fitzgerald on Wednesday to discuss possible solutions.

Fitzgerald posed building the contributions for all town employees into the budget rather than have each department pull it from their budgets. He also said the town should use as much free cash as possible for contribution.

Doing that, he believes the town will be able to mostly preserve the services while still putting away for future costs.

"I believe what really should happen is that we fund it jointly as a town," Fitzgerald said, adding that it would be the most transparent and cleanest way to account for it. "We as a town and every department needs to hash this out."

But that plan isn't so cut and dry. Selectman John McNinch said the town's free cash is the basis for the capital budget and there is a significant backlog of work. He said the problem can't be solved without some cuts to departments.

"The money is coming out of the budget one way or the other," he said. "Every department is going to have to take a hit."

The town is ahead of most by already setting some aside for those future liabilities. Last year, town meeting passed a warrant article to make payments into the account. But the Selectmen want to set up a procedure for future payments that can be replicated each year and not dependent on projected revenue numbers.

Selectman Ed Lane said about half of the budget each year comes from taxes while the rest of the revenue sources are less predictable. Lane believes maintaining the town's services need to come first.

"We want to pay into this OPEB account what we can," Lane said.

Roche said he wants to continue providing good benefits but as this moves forward and when contracts end, the town may have to consider reducing their contribution.

"To date, we're contributing 70 percent and we'd like to keep that," he said. "[But] we don't want to cut services to find it."

In other business, the board approved a permanent conservation restriction on some 100 acres of land off Pittsfield Road. Two parcels that abut the Audubon Bird Sanctuary owned by Toole Properties will be placed into a conservation that restricts certain usages. Toole will still own the land while the Lenox Land Trust will manage it — separating the town from liabilities.

The land is mostly undeveloped wetlands and the restriction will pull it off the tax rolls. Despite that, the Selectmen felt the additional public usage of the land makes up for the modest loss in revenue.

"It provides a contiguous area running up to the Audubon property," said attorney Richard Dohoney, who represents Toole Properties, adding that they've already received approval from both the state and the Conservation Commission.

The board also offered to loan the Cantilena Chamber Choir up to $1,000 as seed money for the upcoming Martin Luther King concert on Sunday, Jan. 19. The choir originally asked for a donation citing that the concert would be attracting people to town. However, the Selectmen felt that since there were stipend members putting it on and the event is requesting donation money, that they should be paid back any loan.

"It's something I'd like to see happen in Lenox," Roche said, but added the town hasn't donated to events like that before.

The rest of the board members agreed and offered the loan to help advertise and get the event off the ground — but they expect to be paid back once tickets are sold.

The Selectmen also appointed Eric Kirby to the Police Department and issued an all-alcoholic license to the Panda House on Pittsfield Road.


Tags: conservation restriction,   retirement,   town budget,   

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