We thank our Democratic colleagues for their endorsement of the progress the Board of Finance has made. We also agree with their honest appraisal of how much remains to be done to recover from the previous years of haphazard financial management.
Since the 2011 election, we have made progress on the pension and retirement benefit (OPEB) fronts. Moody’s just affirmed Westport’s Aaa credit rating a few days ago. The credit agency's opinion included references to 1) adequate reserve levels, 2) well-funded pension system, and 3) proactive funding of our post-retirement liability.
We have made important progress by moving to experienced municipal actuaries and lowering the discount rate used to calculate the value of pensions and OPEB, to more realistically reflect the cost of those programs. To help eliminate the subjectivity and variability of the cost of defined benefit plans, we have implemented defined contribution pension plans for new hires in three of our six pension programs. The remaining three plans are subject to collective bargaining coming up under the term of the next Selectman to be elected this November.
Much more remains to be done, and we must work within Connecticut’s current collective bargaining framework, but we are on the right path. It is particularly gratifying that even though Republicans became the majority on the Board of Finance in November 2011, we were able to achieve these results on a bipartisan basis with the First Selectman and with unanimous support from the Democrats on the Board. We have been consensus-driven, with leadership roles shared among Republicans and Democrats – this model has served Westport taxpayers well.
Our conservative financial actions during this period, identified by Moody's as a primary strength, differentiate us from other towns as well as the state and nation. The Moody’s report stated that our approach “is indicative of the town’s proactive planning to address its long-term liabilities.”
Vigorous financial discipline is more important now than ever before. Personal income per capita in Westport has declined by about 6% since 2007, while taxes and personnel costs have increased by about 22% and 34% per capita, respectively, over this same period. We recognize that these trends are unsustainable, especially now that Westport’s taxpayers face an increasing federal and state tax burden.
We welcome our Democratic colleagues’ continuing efforts to work with us to conservatively manage our finances in order to maintain our excellent schools and first class town services.
Avi Kaner, chairman, Board of Finance