The City Council discusses the mayor’s orders during its June 4 meeting.
Reminder Publishing screen capture by Tyler Garnet
CHICOPEE — During the June 4 City Council meeting, Mayor John Vieau had two orders to appropriate funds into two separate accounts to help residents in Chicopee.
Mayor’s order No. 4 was to move $3 million for the reduction of the fiscal year 2025 tax levy from available funds in the undesignated fund balance free cash account. Vieau talked more about the process and idea to make this order.
He said, “It’s like we’ve done last year. We’re putting $3 million towards tax relief. The financial team meets frequently, and I want to commend the auditor, the treasurer, the assessor and the collector for the discussions that we have about where we stand financially, and we feel it’s in the best interest of our community moving forward to try and reduce that tax levy.”
The City Council approved the motion and Ward 9 City Councilor Mary Beth Pniak-Costello said this approval should be beneficial to the taxpayer in the long run and applauded Vieau for the order.
Mayor’s order No. 5 was to move $2 million to the treasurer’s special account for other post-retirement employee benefits from available funds in the undesignated fund balance free cash account.
Vieau explained that OPEB is an unfunded liability and that the state has asked municipalities to fund that liability and the retirement of others.
“Many health insurance, dental insurance, vision insurance. These benefits are the city’s portion that we have to pay. The city owes these benefits to our retirees. It’s not a mandate but it is a liability and we typically budget $100,000. Last year we did $2 million to get that to being a self-supporting account,” Vieau added.
Treasurer Marie Laflamme also explained the reasoning for appropriating $2 million for the OPEB account.
She said, “It’s our obligation, it’s our commitment to our employees. Currently, we do pay as you go. The state mandated that trust, and we created that trust and didn’t follow through with committing us to a funding schedule but it is really important that we take this seriously. It does help on our bond rating.”
Besides a favorable bond rating, Laflamme said it is just a responsibility for the city to start funding this “unfunded liability.”
City Councilor At-Large Tim Wagner asked how far short Chicopee in relation to the OPEB funds so far.
Laflamme said, “We’re no different than our neighboring communities. We’re probably about $250 million unfunded liability. We put in about $5 million. It’s in a long term investments. Some put more in, some put less in so we are right around there.”
Wagner said through his research it seems one of the only big communities that seems to be up to date with OPEB is Watertown and he added, “I hope we can get there some day.”
Laflamme said that one of the goals the financial team suggests is budgeting funds for the OPEB account each year, especially because she thinks the state will eventually mandate it.
“We’re funding our regular retirement and we’re doing very, very well with that so in a couple of years that will be fully funded and whoever the mayor is at that time I’m hoping they consider putting that money from our budget currently to the OPEB because that is our responsibility. That’s our goal.”
The City Council also approved this appropriation.
After these two orders and a few others in front of the City Council that night, the free cash account still has approximately $5.5 million.
“We will be transferring into the stabilization account at the end of the year, for the council’s reconciliation” Vieau added.
The City Council also approved mayor’s order nine which proposed moving $2 million to the stabilization fund for capital budgeting.
Vieau talked about the request for the City Council to approve these funds.
He said, “Every year, it’s no secret, that there are capital needs for equipment and other things in every department and the Capital Committee will be meeting very soon. I believe we meet right after we get through the budget, and we’ll start determining the order of priority for the requests for capital needs.”
