Mayor Ness Explains "Other Post-Employment Benefits" Report

DULUTH - Good news for the City of Duluth.

The bi-annual Other Post-Employment Benefits report brought back positive reviews.

In 2005 the city took aggressive steps in policy changes by putting all active city employees and retirees on a single healthcare plan.

They also put a back end on defined retiree healthcare.

Because of these changes, the city is now at $182 million in unfunded liability.

If the changes were not made, the city would be at $405 million in unfunded liability.

"It's something that we can take a lot of pride in, in terms of the progress that we've made in ensuring that we're on more stable footing going forward," said Duluth Mayor Don Ness.

The city is spending $8.5 million on health care this year and in 2005 it was projected the city would be spending $14.1 million.

By making the changes, the city is saving $5.6 million additional costs that would have been put on the city of Duluth and its taxpayers.

The trouble point is the projected peak of providing retiree healthcare that will come around 2033.

Ness said the way to address that is by either higher revenue coming in or fewer services being delivered.

After 2033, the costs begin to go down over time.