Village retiree trust fund shot down

By PHIL NOBILE
A resolution to set the stage for a new trust fund for retired Village of Mamaroneck employees was shot down recently after the Board of Trustees publicly debated the measure.

At the July 14 trustees meeting, the board considered sending a request for home rule legislation—which allows local municipalities to determine their own local laws—to the state to allow the village to set up a trust fund for retiree medical benefits.

State law doesn’t allow for setting aside funds for the future of retirees while they are working.

The Board of Trustees did not pass the resolution, voting 3 to 2 against it.

Trustee Leon Potok, a Democrat, voiced support for the plan, and criticized the “sham arguments” of the opposing votes.

Mayor Norman Rosenblum and Deputy Mayor Louis Santoro, both Republicans, and Trustee Andres Bermudez Hallstrom, a Democrat, were the three votes against the plan.

“There wasn’t a single sound reason given for the vote against it,” Potok said.

The fund would have been included in the village’s annual budget and contributed to a separate account for paying the medical benefits. According to the language of the resolution, contributions to the fund would be excluded from determining property tax increases under the New York State 2 percent property tax cap.

Currently, retiree benefits are on a pay-as-you-go basis and receive their funds based on contracts between the village and the local unions.

Potok said investing in retiree medical benefits like investments made into the New York State pension system would be more secure for future generations of village employees.

“It’s important to be fiscally prudent and pay your expenses when you bear them and not pass them along to the next generation,” Potok said. “Ask anyone if it’s fiscally smart to take today’s employee and have future generations pay for it.”

According to the language of the resolution, the Board of Trustees can choose to “unwind” the trust, but distribution of the accrued funds would be deferred by two years and then spread out over a 20-year period.

It was the two-decade period that got the most flak from trustees. Bermudez Hallstrom described the period of payout as “binding the hands” of future boards.

“The way I read it is, if the market changes, then we have this money that is stuck for two decades,” Bermudez Hallstrom said. “We might need the money to spend on people who aren’t retired to fix things now. Under the resolution, we have to wait 20 years or go to the state Legislature and beg them to let us use it.”

Citing the uncertain healthcare landscape across the nation thanks to the Affordable Care Act, popularly known as Obamacare, Bermudez Hallstrom viewed the possible trust as “moot.”

“It’s a matter of time before healthcare becomes single payer or a similar system,” he said. “It’s not a matter of federal government taking over retirees, but the federal government saying ‘there’s healthcare for everyone’ so take it out of your taxes instead.”

Potok called those sentiments “absurd.”

“Trustee Bermudez Hallstrom voted against it on the basis that somehow the liability [of retiree medical care] will be reduced by the federal government some point in the future,” Potok said. “He voted against it on the absurd notion we’d be fully funded for the benefits and the federal government would pass laws to provide for that liability or for it to be reduced. That is an absurd formulation.

For now, paying for retiree medical benefits will continue to be done on a
yearly basis.

CONTACT: phil@hometwn.com

 
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About Phil Nobile

Phil Nobile is a Staff Writer for Hometown Media, mainly writing for the Harrison Review and the Mamaroneck Review. Before joining the Review, Nobile held a web internship at the Hartford Courant performing multiple journalism tasks. A graduate of Quinnipiac University in Hamden, Conn., Nobile wrote for the school’s newspaper, the Quinnipiac Chronicle, and held other leadership positions in organizations on campus. Nobile is a lifelong Westchester County resident. You can reach him at 914-653-1000 x17 or phil@hometwn.com. You can also follow him on Twitter @harrisonreview.