February 08, 2012

Fitch review of Worcester

Found this today

here is part

Overall debt ratios, excluding self-supporting debt, are moderate with debt per capita at $3,106 or 4.7% of market value. The debt amortization rate is rapid with 70% paid off in 10 years. Worcester's combined long-term liabilities related to retiree benefits are large. The city's pension funded ratio was 71% as of Jan. 1, 2011; however, using Fitch's more conservative 7% discount rate assumption, the pension plan would be 62% funded. The city's stated unfunded pension liability at Jan. 1, 2011 totaled $300 million or a moderate 2.5% of market value. The city contributed 100% of its annual required contribution (ARC) of $29.8 million towards its pensions in fiscal 2011, equal to 5.3% of general fund spending. The city budgeted $32.7 million in fiscal 2012 (up 9.9%) and estimates a $35.3 million ARC in fiscal 2013. The city has always made 100% of its required contribution.

The city's unfunded other post employment benefits (OPEB) liability totaled $765 million as of June 30, 2010 or 6.4% of market value (MV), but due to the recent healthcare reforms the city's actuary has estimated that its OPEB liability will be 13% less at approximately $665 million (5.5% of MV). The city funds annual OPEB costs on a pay-go basis.


Jahn said...

What about the city's other unfunded liabilies , e.g. accumulated unpaid sick leave.

Some 'ees leave with a years worth of accumulated sick leave, unless they're some of the employees who on average use 10 sick days per year. I'd love to see what what the average sick days taken per year are in the DPW operations including trash haulers, motor equipment operators, mechanics, ....basically all the blue collar DPW jobs.

What I would like to know regarding retirees health care coverage is what happens if Obumacare survives and eventually all employers push their 'ees into the giant one payer system which is where it will eventually end up. The city will no longer have any health ins. costs and city employees will no longer have to pay their 10%, 15%, or whatever their share is on the premiums.

Where is the money going to come from to fund fed'l gov't provided insurance? The city doesnt pay federal income taxes like a private employers so the Feds cant tax the city and Obuma said that Obumacare will not add one dime to the deficit.

Anonymous said...

Bill, why don't you give us your opinion of the review?

Jahn said...

Anonymous, Ill give you my opinion.

THE CITY IS BROKE, inspite of the beancounters representations to the contrary.

ALL future 'ee obligations s/b funded as these future obligations to city retireees are earned.

TRANSLATION: Time to put all gubmint 'ees into currently funded retirement plans similar to 401'k's

If a private employer did what the city does, the employer would be jailed.

The old:

"You shovel your sidewalk in 8 hours and I'll shovel mine if and when I ++++ing feel like it"

Dittos for other city owned/ created nusiances like the steps at the Auditorium pulling away from the structure and sinking... or ...the bricks facade falling off Nelson Displaced School for almost a decade now...gives new meaning to the elementary school kids working with clay.