Mill Rate to be Set June 15 Without Benefits Data Report

Westport’s tax rate will be decided June 15, before the town receives data indicating how much it is expected to owe in retiree medical benefits.

The Board of Finance, which usually sets the mill rate in May, had delayed setting taxes while it waited for the figures. However the report was delayed by the discovery that the previous estimate undercounted the number of relevant employees by some 500, or a half.

At the Board of Finance meeting Wednesday, an actuary calculating the other post-employee benefits (OPEB) obligations said that his projections won’t be ready until the first week of July at the earliest. That would be after the town assessor is due to send out tax bills with the new mill rate for 2011-2012 on July 1.

The previous report from 2008 estimated the OPEB liability as $50 million and the Board of Finance had requested another updated projection because it wants to prioritize its funding.

"The taxpayers of Westport need some certainty," said First Selectman Gordon Joseloff at the heated Town Hall session. He added that funding OPEB was a "goal" and not a requirement.

At the two-and-a-half-hour meeting, board members expressed their frustration about the error in the 2008 report.

Since the estimate was made, the $50 million OPEB figure has appeared in two town annual financial reports and three bond offering documents. Board of Finance member Avi Kaner called the data "flagrantly wrong."

Tom Lasersohn said "this is a huge issue."

Jeff Kissel, chief actuary at Pentegra Retirement Services, and town finance director John Kondub faced a grilling from board members about how the mistake occurred. Pentegra Retirement Services acquired Retirement Services Group, which had provided the report in early 2008.

Kondub and Kissel said they had both been unable to locate work documents from that year to indicate why actuaries then had not included the other employees, principally Board of Education workers, in the calculations.

As well as miscounting the number of relevant employees, the previous report also underestimated the rate of inflation for medical costs. The key "medical trend rate" in the new report will be near 5 percent, rather than 3.75 percent, Kissel said.

Even aside from those revisions, "the pension liability and our OPEB liability are disturbingly high," said Helen Garten, chairman of the Board of Finance.

When the decision on the tax rate is made June 15, a hike of several mills is already anticipated because of a bigger town budget and a drop in the sum of taxable property in the town.

The property tax rate is expressed in mills or thousandths of a dollar. Westport’s current mill rate is 14.85 mills, equivalent to $14.85 of taxes per $1,000 of assessed value. For a property with an assessed value of $1,000,000, the homeowner pays $14,850 annually.