I want to congratulate the town manager and selectmen for their courage in taking a vote to deal with the OPEB (retiree health insurance) challenge that is facing the town. While an extremely emotional topic, the exchange of views between stakeholders last (Monday) night and during the OPEB task force deliberations has been respectful and thorough.
Having served as chairman of Philips Electronics and its 23,000 employees for a number of years, and now as CEO of a 1,000-person education company, I have dealt extensively with health benefits strategies, actuaries, and employee impacts.
It’s very unfortunate that health-care costs have risen at more than twice the rate of inflation over the past 20 years, a phenomenon that no one could have predicted when negotiating prior contracts, and one which is a burden on Andover, the state, the federal government and private companies.
Many proposals have been floated since the prior town manager outlined the need for reform, but many of them have been blocked by the state Legislature, the PEC (Public Employees Committee) or public employee unions. After an extended process, led by Mike Morris and the OPEB special committee, it was finally time to come to a decision, and the selectmen did their duty last week.
I am also proud that our town manager and selectmen, acknowledging the fiscal challenges ahead, approved an “all-in” strategy to keep us on a more solid financial trajectory: taxing closer to the levy limit and using those funds to stimulate growth at the town yard to drive new tax growth above its historic average, creative use of TIFF financing to bring more development and employment to Andover, accelerating payments to the pension fund to reduce the time to fully fund that obligation, and now making a first move to deal with a much bigger OPEB obligation.
The Town will need all the tools at its disposal to continue to close this gap. We can’t rely on the Statehouse to make the necessary changes to the overly generous benefits for part-time employees. Adjustments for new employees, revised union contracts, and moving closer to employee contribution benchmarks will allow Andover to achieve a sustainable path, asking all stakeholders to be part of the solution.
15 Muirfield Circle, Andover