Part-4: Mayoral candidates talk issues
Q: On the issue of $309 million in unfunded liability for retiree health care: What has the city done right so far and what remains to be done? If you are elected mayor, what's your plan for resolving the issue?...
Q: On the issue of $309 million in unfunded liability for retiree health care: What has the city done right so far and what remains to be done? If you are elected mayor, what's your plan for resolving the issue?
I'm proud of my role in establishing the Retiree Healthcare Taskforce which set the road map to creating a sustainable benefit by a combination of concessions, administrative efficiencies and additional revenue invested with the State Board of Investment.
We are now very close to resolving the contracts with active unions. (The mayoral candidate interviews took place Oct. 3.)
The next step is controversial, yet necessary. That is to ensure that current retirees are also contributing to the overall solution by giving them the benefits offered to current employees. That will result in higher co-pays and deductibles for retirees. But their benefits will still be more generous than virtually any other plan offered in our region.
Moving all current retirees to a single plan with modest co-pays and deductibles will reduce the unfunded liability for the taxpayers of Duluth by more than $30 million. Put that together with competitively bidding health insurance coverage for retirees and the total cost savings could exceed $50 million.
Right now I don't see that the city has done anything right. It's a culmination of mistakes and bad decisions. What we need to do is start paying attention. Medica came to the city in 2003 and recommended to go to a fully-insured plan for post-65-year-olds. Nobody listened.
In 2005, they again came to the city and recommended to go to a fully-insured plan to solve the retiree issue. The task force also said to go to a fully-insured plan for the post-65 (retirees), stating it would save up to $60 million out of a $300 million liability. Apparently, once again, nobody was listening.
That's why I'm running for mayor, because I not only listen, I'll get it done.
There are many other things to examine with our healthcare problems and I will do that. I will make the decisions that will solve our healthcare problem.
Do I believe the contracts are permanently binding? Only until the next contract. Every three years they have had a chance to eliminate that free health care and our city council chose to support it. Mayors negotiate -- the city council has the responsibility to approve (the contracts).
My opponent had two chances to stop the free health care for retiring employees: January 2001 and June 2004. In fact, he introduced the resolution in 2004 to continue the free health care even after the liability of $178 million was made public during the 2003 election year.